Newsweek Blog 2007-12-20 23:45:56The War on Terror has burned through America’s human and financial resources and empowered radical Islam. But for China, it’s been a lucrative reprieve.
However weakened are Sino-US ties – and they’ve taken a beating this year – the most important trans-Pacific relationship would be a lot worse if not for the Bush administration’s pre-occupation with the Middle East. His predecessor will likely declare a victory of sorts in Iraq and Afghanistan and slowly draw down the US military presence there. The White House will focus on domestic concerns like health care, immigration, and trade. Media interest in the terrorist threat will wane. (If there is a clash of civilizations and no one around to videotape it, does it get posted on YouTube?)
And with that, imperial America and once-and-future imperial China can get on with the serious business of bludgeoning each other. The two nations’ shared interests, of which there are many, will be subverted by cheap politicking on both sides. For a glimpse at how this will play out, consider the sagging trajectory of the Strategic Economic Dialogue, the launch vehicle that was to propel Sino-American ties from a feeding frenzy into a high-brow affair.
The SED, as it is called, is a biannual round of meetings between senior officials from Washington and Beijing. It was conceived by investment banker Henry Paulson as a pre-condition for his appointment as US Treasury Secretary. Paulson was an inspired choice for the job. At Goldman Sachs, he arranged the public listings of some of China’s top state-owned companies, which placed him on intimate terms with the country’s senior officials and businessmen. Paulson knew the Chinese and enjoyed the rarest coin in a realm awash in liquidity: respect.
The SED’s charter was to engage China in a sustained, workmanlike way. Paulson’s experience and expertise, it was assumed, would buy him enough credibility from Congress to vouchsafe the round from partisan politics. In return, he would negotiate “deliverables” from Beijing on such controversial issues as market access and the dollar-yuan exchange rate. But his enthusiasm was never matched on the Chinese side. From the outset, Paulson’s expectations for diplomatic parity with Premier Wen Jiabao were dashed. When the new Treasury Secretary hand-delivered a letter to Wen requesting he represent China’s side in the dialogue, Wen gave it a quick read and passed it to Vice Premier Wu Yi. (“Too bad, you get me,” she told Paulson jokingly, according to someone close to Paulson’s office.)
The first session of the SED was held a year ago in Beijing. It yielded nothing but understandings on procedural matters, despite a US delegation that included 13 US cabinet members and Federal Reserve Chairman Ben Bernanke.
Since then, China has come under growing criticism in the US. Lawmakers have passed bills that would impose punitive tariffs on Chinese-made goods in retaliation for Beijing’s manipulation of its currency, the yuan. Pundits like CNN’s Lou Dobbs have intensified their already high-decibel attacks on China for “stealing” American jobs and menacing US interests abroad. Most Democratic presidents campaigning for the Fall ’08 election, and even a few Republican ones, talk about the need to “deal” with China. American nativism, never far from the surface since 9/11, has assumed a decidedly Sino-phobic veneer.
By the time SED III came and went – the three-day event was held in Beijing last week – the US-China relationship had been damaged further by the controversy over tainted and defective Chinese exports, the Dali Lama’s reception in Washington, and Beijing’s decision to block a US aircraft carrier from entering Hong Kong harbor. A week prior to the round, Vice Premier Wu betrayed symptoms of dialogue fatigue when she berated a visiting EU delegation for constantly nagging Beijing about its undervalued currency. No one was surprised when the concessions made by both sides at the most recent SED were largely symbolic. The round is now hobbling alongside the lame duck president who bought into it and Paulson is preoccupied with America’s credit crisis.
In retrospect, the SED was doomed from the start, led as it was by a man who knows China and Wall Street better than he does Congress, and compromised by legislators who know little about anything beyond Washington and Main Street.
Historians may note the SED as the last such diplomatic initiative of the unipolar world. China’s emergence as a regional hegemon is inevitable and it will require bold leadership in Washington to accept this. America has built an empire – its far-flung garrisons and deep-water fleets – on the pretense that it alone should be entrusted as custodian of the world’s natural resources. It markets this not so much as a burden but as an obligation, one that obviates the need for other powers to challenge US access to oil fields and gas terminals. But China is not coming along. It is building a strategic waterway linking its ports to the Persian Gulf while sewing up excavation rights to energy-rich, and mostly authoritarian states in Africa. The Pentagon characterizes this as an ominous “Eastern Way” of energy security: controlling fuel supplies rather than the “Western Way” of buying them in the open market. (Saudi Aramco was a beneficent mentor, apparently.)
The Chinese respond by condemning the US for wanting to deny it the resources it needs to become a power in its own right. Washington deploys long-range F-22 fighter-bombers to Japan and flirts with the idea of selling them to Tokyo. Beijing accelerates the modernization of its military by privatizing its once state-run defense sector. Soon, China will have its own military-industrial complex which, should it bear any resemblance to its US counterpart, will be an empire in itself.
Under the Bush administration, American “engagement” with the world has become as debased as the dollar. The next US president would be wise to refresh it. For all its faults, the SED was at least a good try. It would be sad and possibly tragic if it turns out to be the last one.