News Analysis China Jittery About Obama Amid Signs of Harder Line

WASHINGTON — Whether it was a shot across the bow or a simple restatement of his boss’s views, Timothy F. Geithner’s assertion that China “manipulates” its currency has complicated a crucial front in President Obama’s efforts to improve America’s relations with the world.

China experts here said there were several other signs that the Obama administration could take a harder line toward Beijing, including Mr. Obama’s emphasis on climate change and the environment in trade negotiations and Secretary of State Hillary Rodham Clinton’s focus on human rights.

The Chinese Ministry of Commerce responded tartly to the charge by Mr. Geithner, Mr. Obama’s nominee for Treasury secretary. “Directing unsubstantiated criticism at China on the exchange-rate issue will only help U.S. protectionism and will not help towards a real solution to the issue,” the ministry said late on Friday in a statement to Agence France-Presse.

China starts off on weaker footing with Mr. Obama than it did with his predecessor, George W. Bush. Mr. Bush and his last Treasury secretary, Henry M. Paulson Jr., cultivated Chinese leaders and refused to call Beijing a manipulator. Mr. Obama has little personal experience of China, and lacks senior advisers with a deep interest in or knowledge of the country. With the American economy in a deep slump, and China trying to ramp up its exports to cushion a sharp slowdown there, experts worry that trade relations between the countries could deteriorate.

If the United States repairs its image in many parts of the world, that could make it harder for the Chinese to present themselves as an alternative to American influence in Asia, Africa, and elsewhere.

“The Chinese are probably one of the few people in the world who were sorry to see President Bush go, and are nervous about his successor,” said Kenneth G. Lieberthal, a visiting fellow at the Brookings Institution who worked on China policy for the Clinton administration.

“They saw the Inaugural Address as having some uncomfortable elements for them,” Mr. Lieberthal said. “They are uneasy about Hillary Clinton. She has, in their assessment, not been a friend of China.”

The Chinese news media played down the significance of Mr. Geithner’s remarks, which were made in writing to the Senate Finance Committee as part of the confirmation process.

Rather than dwell on or analyze the reference to China’s currency, the Chinese official newspaper, The People’s Daily, quoted Mr. Geithner as saying that the currency manipulation issue would take a back seat to working with China to alleviate the global financial crisis. The headline said, “U.S. Treasury secretary-designate vows to deepen U.S.-China economic ties.”

American experts agree that the United States will have to work closely with China to engineer a global recovery, and the two countries have each embarked on costly programs to stimulate their economies. The Obama administration will also depend on China to continue buying Treasury bills and other government debt to finance its $825 billion recovery package.

Yet several things could conspire to spoil that cooperation. The Treasury must decide later in the spring whether to label China a currency manipulator, under a law that requires the administration to report to Congress twice a year on the exchange rate practices of trading partners.

In his written response, Mr. Geithner appeared to leave the administration plenty of wiggle room. “The question is how and when to broach the subject in order to do more good than harm,” he said.

But as a candidate, Mr. Obama took a tough line on China’s practices, saying that Beijing pegged its currency at an artificially low rate and pledging to use diplomatic means to force a change.

“This is not good for American firms and workers, not good for the world, and ultimately likely to produce inflation problems in China itself,” Mr. Obama said in a campaign essay for the American Chamber of Commerce in China.

Advocates for closer ties said they worried that unless the administration developed an overall framework for the relationship, individual events like the Treasury report could dictate the atmosphere.

It is not clear that such a framework exists. Mrs. Clinton was careful to steer clear of currency issues in her testimony to the Senate. In that testimony, she demurred on the question of whether the Obama administration would continue the “strategic economic dialogue,” a semiannual meeting on economic issues between the two countries that was led by Mr. Paulson.

Mrs. Clinton does not have the same extensive history with China that she has had with other countries. She is best known there for a speech she gave in 1995 in Beijing about women’s rights, and some China experts said they worried that her positions on trade and human rights could be a problem. Mr. Obama’s focus on energy and climate change, experts said, could cut both ways. If China and the United States could find ways to cooperate on stemming the growth of greenhouse gases, it could become the cornerstone of the relationship. If not, it could be dangerously disruptive.

Nicholas R. Lardy, an expert on the Chinese economy at the Peterson Institute of International Economics in Washington, said the financial crisis had upended many of the assumptions about the relationship.

China’s currency, he noted, has increased in value in recent months because it is pegged to the dollar, which has risen as investors fled to safe investments. China’s trade surplus with the United States has stopped growing, as American consumers stop buying so many Chinese imports.

C. Fred Bergsten, the Peterson institute’s director, said Mr. Geithner had another target in mind with his remark.

“It was a shot across the bow of Congress,” he said. “The administration is saying, ‘We will be tougher on the Chinese on trade, so you don’t need to pass protectionist legislation.’ ”