IS US diplomacy tearing down China's wall, or building it up? Photo credit: Cedric Favero

China today dismissed US pressure to revalue its currency, which US President Barack Obama claimed is being artificially suppressed to give China an unfair advantage in the global export market, The New York Times reported this morning.

It’s just another chapter in the Sino-American saga, a story that’s being told with exceptional frequency these days. In addition to brushing aside Obama’s ostensibly tougher stance on Chinese trade issues, Beijing is also renewing its objections to imposing tougher sanctions on Iran. On Tuesday, Chinese Foreign Minister Ma Zhaoxu told reporters that China is “firmly opposed” to Obama meeting with exiled Tibetan leader, the Dalai Lama, claiming that the US’s intrusion in what he called a sensitive issue would undermine US-Chinese relations. Last week, China bristled at the US’s proposed $6.4 billion arms deal with Taiwan. And the week before that, Secretary of State Hillary Clinton mightily angered China by claiming that the country’s internet wasn’t free.

So what are people saying about the rising tensions between the two? Victor Zhikai Gao, former employee of China’s Foreign Ministry and a private equity consultant, wrote on CNN.com today that the fact of US and China’s high level of economic interdependence muddies their already dysfunctional relationship. “China is the largest creditor to the United States, and the United States remains the most important export market for China,” he wrote, and the two seeming opposites are now the leading economic super powers in the world.

“Therefore, it is crucially important for China and the United States to better understand each other and to provide incentives to each other, so that they can increase cooperation for the benefit of the overall peace and stability in the world,” he wrote. Gao said that the US’s record of diplomacy towards China has lacked cohesion and predictability; that’s a situation that must be remedied before the two can co-exist symbiotically and peacefully.

Meanwhile, The Washington Post is urging Obama to resist Chinese bullying and step up his opposition to Beijing on human rights issues and Iran: It may be time, the paper editorialises, for Obama to “prick the bubble of inflated ambition that has been growing in Beijing.”

But Peter Foster, a reporter based in Beijing, blogged on The Telegraph’s site, “There is so much at stake here.” While other observers have claimed that this “rough patch” isn’t really as bad as all that, Foster wrote, “This is dangerous for everyone. China needs the world, but the world also needs China. Perhaps in five or ten years we shall look back at these spats as nothing more than that, but with so many fundamental underlying differences, it would be very rash to assume so.”