“For more than two decades Max Baucus has worked to deepen the relationship between the United States and China,” said the president in a statement on Friday. “The economic agreements he helped forge have created millions of American jobs and added billions of dollars to our economy, and he's perfectly suited to build on that progress in his new role.”
Baucus would succeed former Gov. Gary Locke, D-Wash., in the key post.
Baucus, the chairman of the Senate Finance Committee, announced earlier this year that he would not seek re-election in 2014.
In the Senate, Baucus helped push through Obama’s signature domestic achievement, the Affordable Care Act, and was a strong proponent for reforming the tax code.
Obama has pushed a “pivot to Asia,” which he says will focus American attention on East Asia and away from troubles in the Middle East.
Baucus’ nomination comes at a critical time in U.S.-Sino relations, with Washington seeking expanded trade ties with Beijing while also working to allay the concerns of allies in the region over China’s growing military strength.
Tensions flared earlier this month after Beijing declared an air defense zone in the South China Sea, which also covers islands claimed by U.S. ally Japan.
The move angered the White House, which called the move a “provocative action,” and Vice President Joe Biden raised the issue during a visit to China.