Hands in pockets, President Richard Nixon takes a walk during his trip to China in February 1972.
Hands in pockets, President Richard Nixon takes a walk during his trip to China in February 1972.

US-China relations: from Nixon and Mao to Obama and Hu



BEIJING // The visit to the United States this week of the Chinese president, Hu Jintao, follows Sino-US summits over the decades that have ranged from globally significant to simply entertaining.

Richard Nixon's 1972 trip to communist China, the first by a US president, was described by Mr Nixon himself as "the week that changed the world", as it refashioned the Cold War political landscape by reducing the acute mutual suspicion that had characterised relations since Mao Zedong's 1949 takeover.

Following tentative reductions in trade barriers in previous years, and two covert trips to China in 1971 by Mr Nixon's then national security adviser, Henry Kissinger, the visit was seen by Mao and his premier, Zhou Enlai, as a way to reduce China's diplomatic isolation. It succeeded in this aim, with more than a dozen countries establishing diplomatic relations with Beijing later that year.

The trip "opened up China to the outside world", according to Jia Qingguo, a professor in Peking University's school of international studies, and a board member of the Chinese Association of American Studies.

"China began to join the international system and started to play an increasing role, rather than staying outside the system and trying to oppose it," he said.

With ties between China and the Soviet Union having soured more than a decade earlier, Mr Nixon's visit prompted Moscow to initiate a thaw in relations with Washington, amid fears it could be outmanoeuvred as Sino-US links improved.

American television crews trailed Mr Nixon as he visited Beijing, Shanghai and Hangzhou, beaming back images of a country regarded at the time by many in the US as mysterious and deeply hostile.

The feelings were mutual, although in her recent family memoir Grandma's China, the Chinese television journalist Wei Jing noted that official attitudes towards the US softened slightly in the weeks prior to Mr Nixon's visit.

Instead of being told to denounce the US and its people as "ferocious imperialists", workers attending political study sessions were instructed to use the milder term "American imperialists".

After resigning in 1974, Mr Nixon went on to make several further visits to China, the fallen president perhaps finding common ground with the ageing and deeply controversial Chinese leader.

Washington transferred diplomatic recognition from Taipei to Beijing on January 1, 1979, and the following month the de facto Chinese leader, Deng Xiaoping, travelled to the US and met the then president, Jimmy Carter. The diminutive Mr Deng was not averse to playing to the cameras, donning a cowboy hat and grinning broadly on a visit to a rodeo in Houston.

"With his charm and waving the hat around, he managed to captivate the Texas crowd," James Schlesinger, who was accompanying Mr Deng as the US energy secretary, said in a 2002 interview.

Mr Deng's visit came as he was starting the economic reforms that have since transformed China.

His trip was "probably the most significant visit by a Chinese leader to the US ever", said Barry Sautman, an associate professor at the Hong Kong University of Science and Technology who studies Sino-US relations. The Chinese used the visit to indicate to the US they were planning "very sharp reforms", Dr Sautman said, and were creating a more welcoming environment to foreign investment.

"Until that time, statements had been emanating that foreign investment would never be allowed in China. That changed very sharply after the meeting," he said.

Subsequent summits between Chinese and US leaders have perhaps lacked the same geopolitical game-changing resonance, although some are still considered highly significant. Notably, Jiang Zemin's meetings with Bill Clinton in 1993 and 1997 reflected China's re-emergence after the suppression in 1989 of the Tiananmen Square protests.

Mr Clinton's return visit to China in 1998 was generally regarded as successful, with comments from the US leader broadcast live.

"Both of these leaders were rather affable types. They did make an impression on the publics of the countries, Clinton especially," said Dr Sautman.

"When Clinton was in China he gave press conferences and major speeches and attracted a lot of attention."

However, trade issues and Taiwan were sticking points during that visit - just as they could be this week when Mr Hu holds talks with his US counterpart, Barack Obama.

dbardsley@thenational.ae

A State of Passion

Directors: Carol Mansour and Muna Khalidi

Stars: Dr Ghassan Abu-Sittah

Rating: 4/5

The Brutalist

Director: Brady Corbet

Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn

Rating: 3.5/5

The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

The specs

Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now

THE SPECS

Engine: 6.75-litre twin-turbocharged V12 petrol engine 

Power: 420kW

Torque: 780Nm

Transmission: 8-speed automatic

Price: From Dh1,350,000

On sale: Available for preorder now

Meydan card

6.30pm: Al Maktoum Challenge Round-1 (PA) Group 1 US$65,000 (Dirt) 1,600m
7.05pm: Conditions (TB) $100,000 (Turf) 1,400m
7.40pm: UAE 2000 Guineas Trial (TB) $100,000 (D) 1,600m
8.15pm: Handicap (TB) $175,000 (T) 1,200m
8.50pm: Al Maktoum Challenge Round-1 (TB) Group 2 $350,000 (D) 1,600m
9.25pm: Handicap (TB) $175,000 (D) 1,900m
10pm: Handicap (TB) $135,000 (T) 1,600m

The%20new%20Turing%20Test
%3Cp%3EThe%20Coffee%20Test%3C%2Fp%3E%0A%3Cp%3E%3Cem%3EA%20machine%20is%20required%20to%20enter%20an%20average%20American%20home%20and%20figure%20out%20how%20to%20make%20coffee%3A%20find%20the%20coffee%20machine%2C%20find%20the%20coffee%2C%20add%20water%2C%20find%20a%20mug%20and%20brew%20the%20coffee%20by%20pushing%20the%20proper%20buttons.%3C%2Fem%3E%3C%2Fp%3E%0A%3Cp%3EProposed%20by%20Steve%20Wozniak%2C%20Apple%20co-founder%3C%2Fp%3E%0A
What is the FNC?

The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning. 
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval. 
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”