China - China gameplan in question as Obama pivots to Asia

BEIJING (Reuters) - China's leaders, upstaged by President Barack Obama's "pivot" to Asia, may hope they end up resembling famed basketball player Yao Ming, who while not as nimble as his rivals, smothered them with his size and doggedness.

During a trip to Asia last week, Obama said the United States was "here to stay", reached a deal to put a de facto military base in northern Australia and chided China for refusing to discuss its South China Sea disputes at regional forums.

Before the East Asia Summit in Bali, China wagered it could keep the South China Sea off the agenda, but Premier Wen Jiabao bowed to pressure from Asian governments and begrudgingly addressed the maritime territorial disputes.

China's public reaction to all this has been mild. But in private, Chinese observers say their government had the initiative in Asian diplomacy snatched from its fingers.

"They have been giving us trouble over and over again," said one source with ties to China's top leaders, referring to the United States.

"But we will not overreact. We do not want to become entangled in any debate over how to deal with China during the (2012 U.S. presidential) elections," said the source, who declined to be identified due to the sensitivity of elite dealings.

STABILITY ABOVE ALL

Considering the range of forces that argue for a mild response -- from the U.S. elections to China's own leadership transition next year -- the lack of a backlash from Beijing should come as little surprise.

"China will take time to assess what all this means. But for (President) Hu Jintao it's bringing unprecedented pressure on foreign policy," said Zhu Feng, a professor of international relations at Peking University who specialises in China-U.S. relations.

In foreign policy, China plays differently. Any policy rethink is likely to take weeks or months, if not longer, to emerge, said Zhu.

Beijing is still licking its wounds from last year, when loud maritime disputes with Japan, Vietnam, the Philippines and other neighbours fanned suspicions about China's intentions.

For China's leaders, those arguments had an unintended consequence, one they hope to reverse: "It pushed those countries over to the United States' side," said the source close to China's leaders.

A convergence of other factors also suggests China won't respond forcefully to Obama's overtures in Asia.

China prizes stable ties with the United States, especially as it faces a Communist Party leadership succession in late 2012, when external crises would be a damaging distraction. Nor does Beijing want to become a focus of campaigning during next year's U.S. presidential race, even if its currency and trade strength has already become a lightening rod for some.

Chinese Vice Premier Xi Jinping, who is most likely to succeed Hu as top leader, is due to visit the United States early next year, burnishing his leadership credentials and adding further reason to keep ties on track.

Also, China's top-down decision making would demand an abrupt shift from President Hu himself to recast policy -- a damaging admission that he had set a wrong course. That will mean any adjustments to policy take time.

"I expect they will seek to counter what they see as U.S. moves to divide China from its neighbors by appealing to those countries' interests in preserving good ties with China, not by seeking to persuade them to weaken their ties with the U.S., which would be counterproductive," said Bonnie Glaser, an expert on Chinese foreign policy at the Center for Strategic and International Studies in Washington D.C.

ACTIONS AIMED AT CHINA?

Still, some in China suspect the United States is seizing an opportune moment to advance its own interests at China's expense.

"We don't want to put aside all considerations of face, but the U.S. mentality and attitude are different," said a second source close to China's leaders, arguing Washington is taking advantage of Beijing's reluctance to sour ties.

Despite the Beijing leadership's buttoned-down public reaction to Obama's diplomatic push, there are constituencies in China likely to demand a harder response to U.S. overtures across the region and pressure over sea disputes.

Last year, pundit-scholars of the People's Liberation Army demanded a hawkish response to U.S. pressure, and some scholars and commentators continue to espouse that line, warning that Beijing is entering treacherous geopolitical waters.

But in second half of last year, President Hu made clear that he could ill-afford another round of regional tensions that could sour ties with Washington ahead of 2012, a legacy-building year for him that coincides with the U.S. presidential race.

Hu also admonished the military for letting officers speak loudly on sensitive disputes, such as the South China Sea and tensions between the two Koreas, said a scholar familiar with official discussions who spoke on condition of anonymity.

China is not giving ground on the key disputes with its neighbours, including sea territory quarrels with Japan and with Southeast Asian nations, but nor is it bristling for confrontation, said analysts.

"We understand that the United States wants to show it has returned to the Asia-Pacific as a priority, and so wants to strengthen ties with allies and so on, but U.S. conduct seems to have gone a bit far," said Yuan Peng, director of American studies at the China Institutes for Contemporary International Relations, a state-run think-tank in Beijing.

"These actions could be seen as aimed at China, especially when so often they are accompanied by commentary to that effect, and then we'd have concerns."

Many governments in the region -- and indeed quite a few analysts inside China -- think that it will be extraordinarily difficult for Beijing to expand its power and interests without generating conflict, willfully or not.

"At the moment, we lose, but in ten years, the U.S. will lose," said Shen Dingli, a professor at the Center of American Studies at Fudan University in Shanghai.

"We can be more patient than a U.S. administration."

Chris Buckley | Reuters

(Additional reporting by Benjamin Kang Lim; Editing by Don Durfee, Brian Rhoads and Dean Yates)

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