US Senator Baucus to be named ambassador to China: aide

Senator Max Baucus, a Montana Democrat who earlier this year announced he would retire from the U.S. Senate in 2014, will be nominated by President Barack Obama to be the next ambassador to China, according to a Senate staffer.

Baucus currently chairs the powerful Senate Finance Committee, which oversees tax and trade policy. He was first elected to the Senate in 1978.

(Read more: Top US Senate tax writer urges corporate tax revamp)

Obama's choice of the 72-year-old Baucus to be ambassador to China must be confirmed by the Senate. The chamber is not expected to consider the nomination until early next year.

Mandel Ngan | AFP | Getty Images

The nomination, which has not yet been announced by the White House, comes as relations between the United States and China are straining due to territorial disputes in the East China Sea and South China Sea.

A U.S. guided missile cruiser, USS Cowpens, and a Chinese warship operating near China's only aircraft carrier, the Liaoning, narrowly avoided collision last week in the most significant U.S.-China maritime incident in the South China Sea since 2009.

(Read more: China's new plan for growth—and less government)

The near miss followed China's recent announcement of an air defense zone covering disputed islands in the East China Sea, which upset U.S. allies Japan and South Korea.

In other issues, Beijing complains that a U.S. strategic policy shift known as the "pivot to Asia" is an attempt to constrain its growing military and political power in the region, while Washington often accuses China of stealing U.S. government and company secrets via cyber theft.

Mobius: Expect more volatility from China

A senior Senate aide said that under Montana law, Democratic Governor Steve Bullock will appoint a replacement for Baucus if he becomes ambassador to China.

Spokesmen for Bullock, who is expected to appoint a Democrat, were not immediately available for comment.

(Read more: Forget a slowdown, China's economy set to accelerate)

Details were not yet available on whether the replacement would serve through 2014. Baucus's Senate seat was already up for election in November 2014.

Whoever is picked by Bullock would have an advantage going into next year's election, assuming that person wanted a full term in the Senate. Republicans have set their sights on the Montana seat in their drive to win majority control of the Senate in the 2014 elections.