To China, trust among countries needs to be earned. During the Asian financial crisis, it decided not to devalue its yuan to undercut its Asian neighbours. -- PHOTO: REUTERS

IN RECENT weeks, the issues of currency revaluation, trade, territorial disputes in Asia and rare earth metals have resulted in a spate of reports on the tension between China and the United States.

The more fundamental question of why they don't get along bears closer examination. Some attribute the tension between the giants to the impending power transition, but there are also deep-seated ideological differences.

This is not as simplistic as Capitalism versus Marxism and Democracy versus Communism. It is apparent to any observer that China is Marxist in name but capitalist in form; and the two countries are closer on this front than is widely believed.

Above and beyond ideologies in domestic governance, China does see the world differently from the US and this is manifested in five main ways.

First, whatever Chinese leaders may proclaim, at bottom China does not believe in the concept of equality among states. While China thinks all states enjoy sovereignty, it does not perceive them as equal. China thinks that assuming all are equal, and treating them so, is hypocritical and does not reflect reality.

Since it believes states are unequal, it stands to reason that stronger states should assume more responsibility and weaker states should receive concessions. This is evident in the ancient Chinese tributary system where weaker states paid tribute to China in return for exclusive trading priorities. While China never colonised these states, it held a paternalistic attitude towards them.

Second, China has a very strong insider-outsider mentality. All countries are not friends by default and trust needs to be earned. During the Asian financial crisis, China chose not to devalue its currency to undercut its Asian neighbours. When negotiating the free trade agreement (FTA) with Asean, China agreed to reduce tariffs for Asean imports without full reciprocity (Cambodia, Laos, Vietnam and Myanmar have a five-year concession).

Cynics may argue that the Chinese currency needed to be kept stable as a pre-requisite for China to join the World Trade Organisation, and that the five-year lapse for the FTA is not a great sacrifice as China is confident of net benefits in trade with the Asean countries. Still, it's undeniably a demonstration of good faith to gain the trust of its neighbours. This was one reason there was arguably an overreaction in China to Singapore Minister Mentor Lee Kuan Yew's comments on the need for the presence of the US in the region to balance China. The sense of 'betrayal' that was expressed can be largely attributed to the view of Singapore as an insider.

Third, there is the Victim versus Victor mentality. China focuses on its wounded history and harps on victimisation. The US focuses on its role of a victor (post-British empire, post-Cold War) and protector (in the current war against terrorism and religious fundamentalism) and the political rhetoric of good triumphing over evil.

China has the defensive view that the world is an unfriendly place where it needs to safeguard its interests. The US has the offensive view that the world is a misguided place where superior American values need to be projected. The uncomfortable truth is that the US has always perceived China negatively in recent history - as inferior when it was a poor developing country and as a threat now it is getting stronger. China is partially disillusioned that the US will never view it in a positive light, regardless of China's efforts and stage of development.

Fourth, the US and China have different interpretations of what constitute results. China views the communication process itself as the aim, and thinks it is just as important as concrete actions. For the Chinese, post-summit declarations are perfunctory. China is comfortable walking away from discussions without binding obligations as China feels understanding the other's position is a positive result as well. Since each country has different values and agendas, reaching a consensus on all issues is not viewed as a realistic expectation and is seldom China's objective. Such principles are evident in the Shanghai Cooperation Organisation, spearheaded by China.

Fifth, the oft-quoted fear of losing face is exacerbated by China's victim mentality and strong nationalism. While the US likes to thrash issues out in public, China places a premium on not losing face in public. China views public challenges as humiliation and retaliates. Examples include China cancelling the China-European Union summit because of French President Nicolas Sarkozy's high-profile meeting with the Dalai Lama. The idea that embarrassing China forces it into action achieves the opposite effect.

The political system of China remains opaque and its intentions are difficult to decipher. To avoid a dangerous misreading of China, the US has to recognise that China operates from a different world view. China needs to be reassured just as it needs to assure others of its benign intentions. The encirclement of China and application of international pressure are counterproductive and risks setting in motion a vicious circle.

The engagement of China for now needs to rest primarily on the establishment of trust, demonstration of good faith and confidence-building measures.

The writer is a PhD student at the School of International Relations and Public Affairs, Fudan University, Shanghai. She does research on China's strategy in multi-party negotiations.

Source - The Straits Times (http://www.straitstimes.com/Review/Others/STIStory_605848.html)