Given the state of the American economy, Obama's direct comments about China have been limited, and usually presented as secondary, to other domestic priorities.

One of the president-elect's greatest strengths is an ability to be diffuse until he needs to take a public position, which allows others to project onto him their own agendas and thoughts; this is perhaps nowhere more visible than in his policy positions towards US-China relations.

Given the limited nature of his direct comments concerning China, Obama's October position paper to the American Chamber of Commerce serves as an important insight into the issues that will guide his administration's engagement with Beijing. The October policy statement had four themes in common with both Congressional Commissions' reports: China's role in negotiating with North Korea, the need for China to change its currency practices, concern over China's foreign-bound investment in key sectors, and product safety issues. In Washington, when areas of concern overlap between the executive and legislative areas, we can expect that such commonalities provide insight into what policy changes to expect from an Obama administration.

Both commissions serve as reporting entities to Congress and as a result provide a sense of the concerns that will directly influence the upcoming legislative session and indirectly shape Obama's. One, the CECC's, emphasizes rule of law and human rights matters within China; the other, the USCC's, looks at potential national security concerns unique to China. The latter has traditionally been more hawkish, and to its credit, appears to have found a more balanced tone this year.

But Beijing's alarmist and heavy-handed responses to potential publicity problems at the Olympics heavily influenced the CECC's report, whose report took a more concerned tone:

Chinese authorities failed to fulfill several Olympics-related commitments - including commitments to press freedom, media access, the free flow of information, and freedom of assembly. The Chinese government's and Communist Party's continuing crackdown on China's ethnic minority citizens, ongoing manipulation of the media, and heightened repression of rights defenders reveal a level of state control over society that is incompatible with the development of the rule of law.

In the short term, the Obama administration is unlikely to elevate these issues in no small part because of the president-elect's own concerns over the US's recent detainee actions during the Bush Administration. Incidents like Abu Ghraib, coupled to the fundamental rule of law questions posed by the American government's extraordinary rendition program, make the CECC's criticisms of China's "black jails" not really actionable. The CECC's description of such facilities as "secret jails [that] exist entirely outside the legal system" makes for an uncomfortable comparison to actions taken by the American government in its "war on terror".

Knowing this, the Obama engagement with China on human rights' issues is likely to follow the same tone of previous administrations - calling attention to the problems, urging reform, but still absent of meaningful consequences.

However, the much hoped for pragmatism of Obama's foreign policy may find an early opportunity with respect to China and North Korea: Obama's October policy paper positively noted China's contribution at the six-party talks with North Korea, and his Council on Foreign Relations statement on Pyongyang's nuclear programs made note of the need to be more "aggressive" with diplomatic engagement. Even while sounding a note of concern about China's inconsistent adherence to non-proliferation agreements, the USCC report positively echoed Obama's statement on North Korea, saying: "China's support for multilateral negotiations with North Korea can help to reduce tensions on the Korean Peninsula, open North Korea to dialogue, and improve bilateral relations." Next to a plan for withdrawing from Iraq, few things would more strongly signal Obama's sensibility, influence and the end of the Bush-era than moving North Korea off of the "Axis of Evil" through diplomatic partnership with China. It would also create an opportunity for goodwill between Washington and Beijing in the midst of what is likely to be a turbulent relationship due to deteriorating economic conditions.

Of more predictable influence on Obama are those policies suggested by the USCC that have ramifications for the national economy. For quite some time, this commission has vocalized concerns that China's currency manipulations create an unfair competitive advantage that is, in no small part, why many Chinese exporters can sell products into North America and Europe at lower raw material costs than domestic manufacturers. Action on this complaint has been largely rhetorical, with a few legislative actions like the 2007 Fair Currency Act threatening retribution, but thus-far these have stopped short of becoming law due to lack of support from the president. This is very likely to change in an Obama administration.

The profound economic crisis now facing America will, through its very intensity and severity, alter the course of economic policy making within the Obama administration and is likely to elevate China's currency practices as something the president-elect can act on to alleviate the pain felt by American companies. Obama spoke directly to this question in October when he said:

China must change its currency practices. Because it pegs its currency at an artificially low rate, China is running massive current account surpluses. This is not good for American firms and workers, not good for the world, and ultimately likely to produce inflation problems in China itself. As President, I will use all the diplomatic avenues available to see a change in China's currency practices.

This statement by Obama can be coupled to the USCC's report which says that because of China's selective choice of which economic reforms to implement, the country's leadership " ... continues to control tightly the value of its currency ... at an artificially low rate by means of strict capital controls. This violates the spirit and the letter of International Monetary Fund bylaws." Taken together, both the USCC and the Obama administration seem to be signaling to China that currency practices will be a point of diplomatic and legislative action over the next four years. Possible actions range from filing a formal grievance with the World Trade Organization on China's currency policy or enacting punitive tariffs on Chinese goods exported to the US.

In addition to an emphasis on currency policy, it is anticipated that Obama will be more aggressive in efforts to increase oversight by the Food and Drug Administration (FDA) and United States Department of Agriculture (USDA) on Chinese food and drug exports to the US. The current tone in America seems to favor regulation as a response to problems in both financial institutions as well as high-value export markets, and China is likely to feel the weight of American dissatisfaction with defective and unsafe products through increased oversight.

The USCC recommends several changes to current policy in these areas which Obama is unlikely to resist, including the elimination of "port shopping" - a practice where the FDA rejects a shipment but then must "relinquish ... to the shipper" only to have the shipment brought to another American port in the hopes of lax inspection. In an attempt to prevent these type of situations, the FDA currently has plans to open eight FDA offices in China, which given the sheer volume of product coming from China to the US is of more symbolic than actual significance.

As a result of the FDA's offices opening in China, Obama is being handed a very loaded public policy and diplomatic issue: given size and staffing, the FDA offices are largely window dressing. But as a consequence of these newly opened offices, the American public expects results in the form of fewer product quality and safety problems. In order to accomplish anything meaningful through these offices, Obama will need to exert heavy diplomatic pressure on Beijing to increase the powers given to FDA inspectors operating in China. Namely, these inspectors must have the authority to freely search shipments, execute unannounced audits of FDA or USDA-registered manufacturing exporters, and halt US-bound product before it leaves China.

If these all remind you of a tamer version of the unsuccessful Weapons of Mass Destruction inspection games tried over the last eight years with North Korea and Iran, you are not alone. But in the absence of a classic protectionist trade policy, increasing the visibility and power of American regulatory bodies in China is Obama's best choice for dealing with the problem. If China resists allowing increased regulatory presence by US inspectors, the political reality in Washington will likely force the Obama Administration to compensate through even more pronounced actions on currency reform or China's ability to invest in US equities.

The latter point is of great concern to the USCC: its report goes on at some length to describe how the China Investment Corporation (CIC) has the potential to exert undue influence on key sectors of American industry. The report cautions that "China appears far less likely than other nations to manage its sovereign wealth funds without regard to the political influence that it can gain by offering such sizable investments." This concern may owe less to the CIC's activities than that of another Chinese government agency known as the State Administration for Foreign Exchange (SAFE). SAFE is the People's Bank of China manager of foreign currency, and the USCC reports that SAFE offered to purchase Costa Rican government bond issues if Costa Rica formally severed diplomatic relations with Taiwan.

Such action suggests that China is maturing in its knowledge of how to leverage economic growth into political power, but an exchange of capital for isolating Taiwan is very clumsy and disrupts the American policy community's stance towards China. Conventional - if largely unspoken - wisdom has it that Taiwan will be gradually and peacefully absorbed into China in due course. This process is expected to be subtle, and to be clearly marked by moves made by Taiwan's citizens and reflected by its government. Any show of force from China would topple this idea, and quickly escalate US-China tension. If China continues to make such overt and antagonistic moves towards Taiwan as it did in 2008 with SAFE, it will be increasingly difficult to argue for a peaceful transition.

Granted, missing from the report, but likely present within the Obama administration policy makers, is a more nuanced appreciation that most countries have a defined political agenda to their own sovereign wealth funds, and that China is no different. The worst case scenario for all three countries is that China's actions towards Taiwan through either the CIC or SAFE justify a foundational shift in America's view of China as authentically Communist, with expansionist aspirations that couple economics to politics and force. It is unlikely constructive relations between the US and China could survive such a shift.

In the short term, the group of foreign policy and economic advisors Obama is surrounded by are unlikely to advocate a change in the belief of previous Administrations that as China economically modernizes, it will liberalize, and may even become something akin to a democracy. But the economic crisis enveloping America may be larger than any of this narrative, or any of their experience, ideology, and pragmatism. On the edges of both the Republican and Democratic parties, a desire for status-quo with China is not shared; the extremes of both groups believes trade with China hurts America. One has only to watch Pat Buchanan hyperventilate on MSNBC about the Chinese taking jobs from Americans and the need for "economic patriotism" to realize that as the US economy slips further into decline, the pressure on politicians to reframe how they view China - its present and future - is going to intensify.

In this area, the USCC report is a leading indicator of the growing sense that China's modernization may not equal political reform: "Yet Western expectations that China's path of economic liberalization also will lead it eventually to free market capitalism and even to democracy have been dashed … China has taken a very different path. And China's lengthy economic growth spurt has been employed more as a justification of continued Communist Party rule than as a stepping stone to political reform." This is not a cautionary note; this is an assertion of fact by a Congressional Committee that China's overarching trajectory of reform has been disrupted.

The USCC's concern is shared by the CECC, whose report on China's pre-Olympics human rights policies leaves one with the unmistakable sense that China is nowhere near Western concepts of personal liberty. Ideologically, as this idea takes root within Washington, it will become increasingly difficult for those around Obama to argue for the status-quo on China if the policy community and the American public believe they are only enriching a rival power whose politics are at odds with American values.

While China may not be one of the president-elect's most pressing concerns, a host of China related issues are interwoven within the challenges of the next four years. The specter of protectionism, once understood to be the fuel to the fire of the Great Depression, is now being spoken of again, this time as "economic nationalism", even an act of patriotism. As both reports illustrate, China's development still comes up very short of the ideal; and yet, in this moment of America's history, it seems we may need to be more mindful of getting our own house in order. The problems we now face are much more of our own making than China's, and in our fear and frustration we should be wary of looking for others to blame.

Benjamin A Shobert is the managing director of Teleos Inc (www.teleos-inc.com), a consulting firm dedicated to helping Asian businesses bring innovative technologies into the North American market.