China and the West - core issues

1) ARMS SALES TO TAIWAN

What's the problem?

The United States is to sell Taiwan US$6.4 billion ($9.2 billion) of arms - including Patriot missiles, mine-hunter ships and Black Hawk helicopters - under a deal agreed by the Bush Administration.

The view from the West

The deal is necessary to maintain the security balance in the region. The US also has a legal duty to help Taiwan defend itself; Beijing has more than 1000 missiles pointing across the Taiwan Strait and says it could take military action if the self-ruled island seeks formal independence. However, Washington has not included the F16 fighter jets or submarine technology Taipei seeks.

View from Beijing

Its response to the announcement has been unusually strong. As well as suspending military exchanges, it has threatened to place sanctions on US firms involved in the deal.

How serious could the row become?

It is probably not as bad as it looks. Despite suspending military exchanges, China appears to have approved a visit by the supercarrier USS Nimitz to Hong Kong this week.

2) SANCTIONS ON IRAN

What's the problem?

The West is pushing for substantial United Nations sanctions against Iran to curb a nuclear programme which it believes is pursuing military as well as civilian goals.

View from the West

The US Defence Secretary, Robert Gates, said last week that he wanted to see sanctions imposed in "weeks, not months". Western leaders warn that Iran is not serious about reaching a deal.

View from Beijing

Iran, led by President Mahmoud Ahmadinejad, is an importsnt ally and energy supplier, and China - a member of the UN Security Council - feels it has little to gain from alienating it. It says diplomatic avenues have not been exhausted, that Iran's pursuit of nuclear weapons is not proved and that sanctions will be ineffective.

How serious could the row become?

China's Foreign Ministry warned that the row over America's recent arms sale to Taiwan would affect regional and international co-operation - a comment many read as a signal that China would not play ball on Iran. Beijing could feel isolated if Moscow continues to stand alongside Western powers, but even if it agrees to sanctions they are likely to be too watered down to satisfy others.

3) CURRENCY

What's the problem?

The strength of the renminbi has been a long-running battle. Economists say it is undervalued by as much as 40 per cent - encouraging cheap Chinese exports to flood other countries (thereby keeping down inflation, point out the Chinese) while discouraging imports.

View from the West

A substantial rise in the currency's value is necessary. This month Obama vowed to take a tougher stand on trade, and given the state of the US economy, there is growing domestic clamour for action.

View from Beijing

China says it will not submit to pressure and accuses the US and Europe of protectionism. The recovery of exports (which plummeted last year) has persuaded many Chinese economists that appreciation is needed to head off nascent inflation and encourage a much-needed rebalancing of the economy, but Beijing will not want to look as if it has been pushed into a revaluation.

How serious could the row become?

There are fears this issue, alongside other trade frictions, could lead to tit-for-tat action. But China's Deputy Commerce Minister last week dismissed prospects of a trade war; given their economic interdependence, all are likely to tread carefully.

4) THE DALAI LAMA

What's the problem?

The Chinese Foreign Ministry has urged Obama to cancel his meeting with the Dalai Lama in Washington on Friday, warning that it will damage Sino-US relations.

View from the West

Washington and Europe are anxious to highlight the cause of exiled Tibetans and concerns about human rights in the autonomous region, particularly since the unrest of 2008. Every US President for the past 20 years has met the Dalai Lama. Obama delayed their talks because he wanted to visit China first. That led to accusations he was soft-pedalling.

View from Beijing

China accuses the Dalai Lama of heading separatist forces - he says he seeks only meaningful autonomy - and has taken a tough line on his meetings with heads of state.

How serious could the row become?

It is unlikely to escalate, although the fact that the meeting coincides with other frictions has complicated matters. China was keen to avoid a rerun of 2007, when George W. Bush presented the Dalai Lama with the Congressional Gold Medal; it can live, albeit unhappily, with a private meeting at the White House.

5) HUMAN RIGHTS

What's the problem?

Human rights groups and foreign diplomats say there is a growing attack on China's already fragile civil society, citing increased pressure on lawyers, internet censorship and a more punitive attitude to activists and dissidents, including writer Liu Xiaobo, sentenced to 11 years for subversion.

View from the West

China is not abiding by its own constitution, never mind international law, and must clean up its act if it wishes to be respected as a global power.

View from Beijing

China says other countries should not interfere in its domestic affairs. Asked about Liu's case last week, a Foreign Ministry spokesman told reporters: "China has no dissidents. We only act in accordance with the law. There is only the difference between criminals and those who are not criminals." Some say Western professions of concern are hypocritical given the record of the United States and other countries on issues such as Guantanamo Bay, and are just another stick to beat China.

How serious could the row become?

Chinese analysts and human rights campaigners are sceptical about whether Western governments will make it a priority, particularly given the other issues - such as Iran - that they face.

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