U.S. and China political pressure strain ties between the two superpowers

President Barack Obama, under attack by Republican nominee Mitt Romney for being soft on China, said Monday he is asking the World Trade Organization to rule that Beijing is illegally subsidizing autos and auto parts. Mr. Romney, who has been running ads in Ohio criticizing the president on trade policies toward China, called the move "too little, too late."

Chinese leaders, meanwhile, are under internal pressure to appear tough and please the military during China's own leadership transition, which gets under way this fall. They are facing off with Japan and other regional powers over ownership of several Pacific islands.

Some major Japanese companies on Monday shut factories in China following an outbreak of anti-Japan demonstrations over the weekend.

Defense Secretary Leon Panetta walked into the dispute when he arrived in China Monday in search of a way to lower tensions. Mr. Panetta is supposed to meet Wednesday with Chinese Vice President Xi Jinping, who is expected to become the country's top leader in a few weeks.

There is every reason to believe that tensions will continue to simmer.

"Particularly at a time of leadership transition, nobody wants to appear soft on any external actor—not Japan, not the U.S.," said Bonnie Glaser, an expert on Chinese security issues at the Center for Strategic and International Studies.

The WTO complaint by the Obama administration is its third this year and eighth against China, and the president traveled to the election-battleground state of Ohio to address the issue. "American workers build better products than anybody," Mr. Obama said to cheers. "Made in America means something."

Mr. Romney wasted no time calling Mr. Obama's WTO complaint inadequate. "Campaign-season trade cases may sound good on the stump, but it is too little, too late for American businesses and middle-class families," said Mr. Romney, whose ads promise he will "stand up to China."

Polls show little downside in the U.S. to beating up on Beijing. An NBC/Wall Street Journal poll in June found that 62% saw China as an adversary; just 25% saw it as an ally. And the advantages are clear for Republicans: A Bloomberg poll in June showed 40% of voters were dissatisfied with the Obama administration's China trade policies while only 32% were satisfied.

Similarly for the Chinese, feelings of national pride among the masses provide leaders with a grass-roots stamp of approval for their worldly ambitions. China's leaders can point to restlessness among its people or its military in pressing their claims abroad—with the Americans, Japanese or others.

"It's a version of the good-cop, bad-cop routine," said James Holmes, a China expert at the U.S. Naval Warfare College.

Unlike the U.S., where voters can throw a weak leader out of office, China's system is more diffuse. Leaders rise by the approval they receive from powerful patrons and interest groups within the Chinese Communist Party, or elsewhere in the system. State-owned corporations represent a powerful domestic voice.

"It's very hard to work against the interests of some major players," said Kenneth Lieberthal, who was a White House national security adviser specializing in China during the Clinton administration and is now at the Brookings Institution.

"The druthers of the Xi Jinping leadership would be to tamp things down internationally a lot so that they can focus on their domestic agenda," he said.

But if the U.S. holds to an aggressive stance, or implements Mr. Romney's pledge to begin battering China over its currency policies on Day 1 of his administration, Mr. Xi will have to respond forcefully.

Said Mr. Lieberthal: "If the U.S. challenges China, and he does not react strongly, he doesn't have a prayer."

U.S. officials hope to head off a crisis through Mr. Panetta's visit. Within the South China Sea and East China Sea, tensions have been rising as China and its neighbors parry competing claims to islands, waters and the resources beneath them. China is competing with the Philippines over claims to an area in the South China Sea known as Scarborough Shoal, and is vying with the Philippines and others for control of the Spratly Islands.

A more troubling dispute is brewing in the East China Sea as Japan and China face off over an uninhabited archipelago known as the Senkaku Islands in Japan and as the Diaoyu Islands to the Chinese.

Mr. Panetta left Japan for Beijing on Monday, calling the situation risky and warning of the possibility of a "blowup."

The defense secretary's message to the Chinese: Take part in talks to resolve the territorial disputes. The protests in China are expected to continue through the week, fueled by Tuesday's anniversary of Japan's 1931 incursion into northeast China.

Chinese security officials stepped up their presence on the anniversary. Thousands gathered in front of the Japanese embassy in Beijing on Tuesday morning under the watch of what might have been as many security personnel. The crowd's numbers were growing rapidly as the morning went on. Many carried portraits of Mao Zedong. But the scene was still considerably quieter than over the weekend, when protesters engaged in shoving matches with police.

Chinese radio has issued reports that as many as 1,000 Chinese fishing boats are heading toward the islands, under protection from six Chinese maritime surveillance boats.

A key question will be whether the U.S. is considered an honest broker in the dispute. Mr. Panetta represents an administration that has engaged in a military buildup in the region that Washington views as a response to pleas from allies, but that China considers to be aimed squarely at Beijing.

In his trip to Japan, Mr. Panetta announced a deal to beef up U.S. radar in the country to protect against North Korea, but the step is seen in Beijing as a military challenge to Chinese missile program.

(Published by WSJ - September 18, 2012)