Sunday, November 22, 2009

"This is what you do as a creditor."

In a recent segment of American Public Television’s WorldFocus, Marcus Mabry of the New York Times and Roben Farzad of BuisnessWeek discussed the Chinese-American relationship in light of Obama’s trip to Asia. No conversation about contemporary US-China relations would be complete without turning, however speculatively, to a nebulous discussion about US global decline in the face of a rapidly rising China. Yet, sharing the conviction that China is bound to surpass the United States as a world power, Farzad and Mabry's discussion actually explored a much ignored element of the dynamic between China's rise and the relative decline of the US power and global influence – possible metrics for this dynamic change.

With roughly $2 trillion in US assets, China is the largest creditor to the world’s largest debtor nation. Like any creditor, China is continually evaluating the risk of its investment, and may eventually impose conditions upon its debtor. At what point will this happen? For Farzad, such actions by the Chinese are “a natural extension of the current relationship and almost inevitable.” The recent rumblings about the price tag of US health care reform and inquires into the US appropriations policy towards Afghanistan are to be expected since “like any cold-eyed investor, [the Chinese] are worried about their investment.”

By virtue of the their status as the largest creditor, will China have a say in the number of troops sent to Afghanistan, or how much the US will be able to spend of its own treasure? For Mabry, once the opinions of Beijing begin to influence Washington’s strategic decisions, especially those directly affecting national security, the decline in US global power will become evident. This would be the real measure of the decline in US global vis-a-vis China.

In some sense, as Farzad claims, China is already an “imprimatur on US [foreign] policy.” In many cases, China is the “chief obstacle and chief facilitator.” Examples include US policies toward Iran and North Korea, which necessitate Beijing's approval in order to be effective. However, China's influence regarding US policies toward Iran and North Korea are better explained as the result of China's permanent seat on the UN Security Council and not it's status as a creditor to the United States. Nevertheless, Mabry and Farzad offer up for consideration an interesting benchmark for the decline in US global stature relative to China. China may not have a say in Washington’s Afghan policy or domestic health care reform this time. But can we be certain that such internal meddling is not around the corner?

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