Are China U.S. Relations Really Off to a Rocky Start?

Despite the fact that the media keep saying that Obama's off to a rocky start with China, I doubt it. Read the White House statement on the phone call between Obama and China's Hu Jintao. 
In fact, China Daily has a different report than CBS's story below. Here's China Daily's take:

The Chinese president said China is ready to strengthen dialogue, promote mutual trust and expand cooperation with the United States in a bid to confront various global challenges together and push forward a stable development of the Sino-US relationship.

Hu said the core interest of either country should be respected by each other and taken into consideration.

Here's more:

As the contagious financial crisis is still producing severe influence to national economies and people's lives, the international community should strengthen coordination and promote closer cooperation to stand up to the challenge, Hu said.

Describing the Sino-US ties as the most important bilateral relations for both sides, Obama said enhancing bilateral constructive dialogue and cooperation is in the interest of not only the two countries themselves, but the world at large.

The US side is expecting closer cooperation with China on major international and regional issues, he said, adding that the US government is willing to join hands with China to develop a more active and constructive bilateral relationship.

Hu Jintao said China acknowledged US efforts in stabilizing the financial market and stimulating the economy, adding that China is willing to further strengthen communication and coordination with the US side in macroeconomic policies, and firmly oppose trade and investment protectionism.

Hu said China will join hands with the United States to work toward fruitful achievements in April's Group of 20 (G20) summit in London and promote healthy and stable development of the world economy and finance.

Now, contrast that with CBS's version:

CBS: The White House says President Barack Obama has told Chinese President Hu Jintao that global trade imbalances must be corrected.

White House press secretary Robert Gibbs says the president called Hu on Friday and both men spoke of their intention to build a "more positive and constructive" relationship between their countries. Gibbs says Obama told Hu he looks forward to meeting with him.

Obama's call follows criticism of China's currency policies by Vice President Joe Biden and Treasury Secretary Timothy Geithner and a "buy American" provision that has been attached to White House-backed stimulus legislation.

The U.S. trade deficit with China is the largest ever recorded with a single country and recently has been setting new monthly highs. U.S. manufacturers contend China has slowed the pace of currency reform to cope with a global economic downturn that threatens to harm its export-driven economy.

China recently surpassed Japan as the U.S. government's largest creditor. Any decision by Beijing to move its money would deal a dizzying new blow to an already tottering American economy. Yet relations between China and the new Obama administration are off to a rocky start. 

AP said relations are off to a "rocky start" as well.
Susan Rice, U.S. ambassador to the United Nations, has already met with Chinese officials to explain Obama's policies.

Timothy Geithner has been criticized for calling out China for manipulating currency (which makes China's products cheaper for U.S. consumers and our products more expensive in China). Even if China's feathers get ruffled, there's no harm in calling them out. You can't change something unless you acknowledge there's a problem. 

National Post: President Barack Obama believes China is "manipulating" its currency, his choice to head the U.S. Treasury said on Thursday, using a term the Bush administration had deliberately avoided for years to describe Beijing's foreign exchange practices.

Washington will "aggressively" use all its diplomatic tools to press Beijing to move faster on currency reform, New York Federal Reserve Bank President Timothy Geithner said in response to written questions from the Senate Finance Committee, which voted 18-5 on Thursday in favour of his nomination.

"President Mr. Obama -- backed by the conclusions of a broad range of economists -- believes that China is manipulating its currency," Mr. Geithner wrote.

The Treasury nominee also reiterated the long-standing U.S. currency policy mantra that a strong dollar was in the United States' interest.

The dollar trimmed losses versus the yen but U.S. Treasury bond prices fell on worries China could respond to Mr. Geithner's frank comments by dumping U.S. Treasury bonds.
Given the entangled U.S.-China economic relationship, that's an unrealistic fear, said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York.

Bush was afraid to say it:

Under former President George W. Bush, the Treasury Department urged Beijing to move to a market-determined exchange rate and saw some progress since July, 2005.

But to the frustration of lawmakers and manufacturers, it repeatedly refused to formally label China as a currency manipulator in a report due each April and October. Bush officials also avoided using the term in public.