In 2002, the US trade deficit with China was $103 billion. In 2005, it was $202 billion. It doesn't show any signs of diminishing. That means that many, many dollars are crossing the Pacific every month, nearly 20 billion of them, leaving the US and entering China. And a large percentage of those dollars are invested in US Treasury bonds, financing the US government's budget deficit, which is expected to remain at an unsustainable level of 3.5 percent of Gross Domestic Product for the next decade. In 2005, "net foreign purchases of U.S. Treasury securities were a record $196.8
billion," according to the US Commerce Department.
Higher trade deficit, higher budget deficit, more US assets owned by China. When Hu Jintao sees George Bush in Washington this week, the Chinese president is visiting his biggest debtor. Furthermore, the dollar is shaky, poised for a likely plunge in value, as the Left Coaster reports, while the Chinese economy is growing at an annual rate of 10.2 percent, and Hu is allowing a minor revaluation of the undervalued yuan. The economic cards are all in China's hand, and Bush has nothing to show.
Except, of course, the only card Bush knows how to play: military power. Michael Klare writes in TomDispatch about the great-power games that are now ramping up, and the serious dangers they present. Hu and Bush may be smiling at each other in the White House this week, but the maneuvering for position has begun. And, Klare writes, Bush is now focused on military containment of China above all other priorities:
The truly commanding objective [of Bush's military strategy] -- the underlying basis for budgets and troop deployments -- is the containment of China. This objective governed White House planning during the administration's first seven months in office, only to be set aside by the perceived obligation to highlight anti-terrorism after 9/11; but now, despite Bush's preoccupation with Iraq and Iran, the White House is also reemphasizing its paramount focus on China, risking a new Asian arms race with potentially catastrophic consequences.…
Washington's concern over growing Chinese influence in Southeast Asia has come to be intertwined with the U.S. drive for hegemony in the Persian Gulf and Central Asia. This has given China policy an even more elevated significance in Washington -- and helps explain its return with a passion despite the seemingly all-consuming preoccupations of the war in Iraq.
Whatever the exact balance of factors, the Bush administration is now clearly engaged in a coordinated, systematic effort to contain Chinese power and influence in Asia. This effort appears to have three broad objectives: to convert existing relations with Japan, Australia, and South Korea into a robust, integrated anti-Chinese alliance system; to bring other nations, especially India, into this system; and to expand U.S. military capabilities in the Asia-Pacific region.…
China, however, has always responded to perceived threats of encirclement in a vigorous and muscular fashion as well, and so we should assume that Beijing will balance all that charm with a military buildup of its own. Such a drive will not bring China to the brink of military equality with the United States -- that is not a condition it can realistically aspire to over the next few decades. But it will provide further justification for those in the United States who seek to accelerate the containment of China, and so will produce a self-fulfilling loop of distrust, competition, and crisis. This will make the amicable long-term settlement of the Taiwan problem and of North Korea's nuclear program that much more difficult, and increase the risk of unintended escalation to full-scale war in Asia. There can be no victors from such a conflagration.
We need a president who understands the weaknesses as well as the strengths of the United States, who values the give-and-take of true diplomacy, who truly wants to live harmoniously with other nations rather than proving American supremacy. We need an adult in the White House.
When Bush replied to critics of Donald Rumsfeld the other day—petulantly refusing to fire the incompetent defense secretary—he barked, "I am the decider!" His whiny tone and angry affect were frightening: he sounded like an adolescent who, challenged for his adolescent behavior, had no response other than "I don't care! That's what I want!" No reasons, no discussion, no attempt to convince the critics, merely an assertion of royal prerogative. A bully's reply.
This is the man-child who is trying to deal with Hu Jintao and Mahmoud Ahmadinejad. Bush may be the decider, but his decisions are based on little more than a sense of personal entitlement, bluster, and aggression. And his spectrum of responses ranges from angry threat to nuclear attack. Not a pleasant prospect. Hu will certainly emerge the winner this week.
