Chinese-American relations have one of the characteristics of an iceberg. The part that is visible is cold -- lots of mutual recriminations -- and jagged; the greater part, nine-tenths, is submerged, invisible to the naked eye, and far more consequential. This is one area in which what you see is rarely what you get.

Americans have long been miffed at the huge trade imbalance caused by China’s undervaluation of its currency. But the angry congressional voices, and demands that the secretary of treasury label China a “currency manipulator,” have long gone unheard, or at least unattended to, at the White House. President George W. Bush and Treasury Secretary Hank Paulson decided that a trade war is not in America’s interest, and instead conducted an ongoing strategic dialogue with China about the nature of our economic relationship. With the advantages to American consumers of access to low-cost Chinese goods obvious to anyone who prowled the aisles of Wal-Mart, a succession of presidents were able to hold off the protectionists even though the dialogue with China proved to be a dialogue of the deaf.

That was then, and this is now. The recession has caused the question of the U.S. trade deficit with China to merge with the need to create “good American jobs.” All those Chinese goods must, it seems obvious to Democrats in Congress, be putting Americans out of work. Add the fact that Barack Obama is beholden to his trade union allies for campaign funds and doorstep campaigners, and you have an administration that has to do something if the president’s promise to create millions of American jobs by stimulating high tech, green exports is to be seen as credible, at least until the facts start rolling in.

Remember: When the worldwide recession threatened to visit China, the authorities there froze the gradual upward drift they had been allowing in the yuan, resulting in an 8 percent depreciation of the currency. China’s exports and already growing economy grew faster, and the sinking of the economies of its trading partners accelerated. Pressures for retaliation mounted.

Meanwhile, the Chinese rulers know, because their own central bankers have told them so, that their economy is over-heating, and that if some coolant is not applied, it will suffer an inflationary explosion. China’s exporters trade their dollars for the yuan they need to pay their workers and meet other costs, thereby increasing their nation’s money supply -- by a lot. And they use their earnings to expand their plants, increasing the capacity that domestic demand will not absorb, and that will be dumped -- oops, sold -- on world markets.

Still, trade policy with China cannot be viewed in isolation from broader issues. We are talking about the G-2, the superpower and emerging power that have interests in a lot more than trade. America wants China to support sanctions on Iran; China wants America to stop selling arms to Taiwan. America wants China to bring the North Koreans to the nuclear negotiating table; China wants America to stop nagging it about human rights. America wants China to cooperate in plans to reduce CO2 emissions; China wants America to keep the Dalai Lama out of the White House. America wants China to allow the yuan to move up in value; China wants America to stop all of this talk about currency manipulation, and not raise the subject in the report Geithner is legally obligated to make to congress at some point. America wants China to open its markets to made-in-the-USA products and to stop stealing the intellectual property of American firms; China wants America to drop tariffs on steel and low-prices tires. Most of all, American needs to reduce the flow of dollars to China lest China’s power over U.S. policy become even greater than it already is.

So the Chinese asked Treasury Secretary Tim Geithner to drop by last week after his visit to India, to meet with Vice Premier Wang Qishan. And President Hu Jinato belatedly decided to attend the 40-nation nuclear security summit that opens in Washington tomorrow. That part of the iceberg will be visible to all. What will not be are the items not on the summit’s agenda.

One of these will be final agreement to have Hu visit Washington this summer, reciprocating Obama’s (humiliating) visit to China in November. Another will be discussions to encourage the Chinese regime to loosen restrictions on its companies’ investment in the U.S. China already has done a few headline-grabbing investments deals here, most recently automaker Zhejiang Geely’s $1.8 billion purchase of Volvo from Ford. It has also dipped its toe in the water with smaller ventures in Georgia (a soy sauce plant), Texas (a few telecoms manufacturers), and Wisconsin (a shopping mall).

Obama would like nothing better than to make a tour of job creating Chinese investments in key states by the time he stands for reelection in 2012. And the Chinese government is under pressure from its own companies to allow them to enter the lucrative U.S. market, as other American trading partners such as Japan and Germany (think Toyota, BMW and Mercedes) have successfully done.

Of course, the dollar peg will be on the invisible agenda. But my guess is that it is already a solved problem. The Chinese will publicly follow the line taken by China’s premier, Wen Jiabao, who denies the yuan is undervalued and insists that depreciating the dollar while pressuring other countries to appreciate their currencies in order to increase exports “is protectionism,” which he presumably opposes. That’s the visible part. The part below the surface will involve an agreement by Hu to allow the yuan to appreciate gradually by a few percentage points in order to strengthen Obama’s hand with those calling for more drastic measures, and to satisfy his own central bankers.

In the end, all of this is more cosmetic than substantive. If Chinese imports become a bit more expensive in the U.S., but only a bit, the effect on trade with China will be miniscule, and the effect on America’s trade balance even less, as consumers switch to the low-cost products of Central American and other countries. But that matters less to President Obama than adding what he can represent as another victory to his health care triumph and the arms control deal with Russia.

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