The United States and China are headed for a rough patch in the early months of the new year as the White House appears set to sell a package of weapons to Taiwan and as President Obama plans to meet the Dalai Lama, U.S. officials and analysts said.
I do not see this developing into anything to worry about too seriously, and is likely to remain a war of words, but Beijing’s tough stance shows it is definitely keen to maintain its new status as a world power. US officials and analysts have noticed a new assertiveness. This stems from a sense in Beijing that the global economic crisis proves the superiority of China’s controlled economy and its authoritarian political system — and that the West, and in particular the United States, is in decline.
That type of swagger is new for China and it could make for a stronger reaction from Beijing. If China really believes the United States is in decline and that they will soon be the superpower, they may seek to take on the U.S. in ways that will cause real problems.
Some American analysts say that the Obama administration — with its intensive outreach to Beijing — tried too hard in its first year to cultivate ties with China. Playing hard to get might have helped smooth out China’s swagger, they suggest.
“Somehow the administration signaled to the Chinese that we need them more than they need us,” Lampton said. “We’re in the role of the supplicant.”
But as far as I’m concernced, the relationship between the US and China is one of convenience and one that is likely to last for quite some time, however, change it will. For China, it has helped the regime guide development in the way it would like—and keep the domestic economy’s growth rate from crossing the thin line that separates “unbelievably fast” from “uncontrollably inflationary.” For America, it has meant cheaper iPods, lower interest rates, reduced mortgage payments, a lighter tax burden. But because of political tensions in both countries, and because of the huge and growing size of the imbalance, the arrangement now shows signs of cracking apart.
This tension also comes at a sensitive time. After hammering out a wobbly political deal with China on climate change in Copenhagen, the United States still needs China’s help on three pressing international issues: Iran, North Korea and restructuring its economy so that the Chinese people consume more and export less.
I feel that these recent tensions should serve as a discussion starter in the US. Americans should be debating whether in principle it is good to rely so heavily on money controlled by a foreign government. The debate has never been more relevant, because America has never before been so deeply in debt to one country. Meanwhile, the Chinese are having a debate of their own—about whether the deal makes sense for them. Certainly China’s officials are aware that their stock purchases prop up 401(k) values, their money-market holdings keep down American interest rates, and their bond purchases do the same thing—plus allow our government to spend money without raising taxes.
The Chinese are subsidizing the American way of life. Are we playing them for suckers—or are they playing us?
