Financial Crisis Improves Sino-American Ties

The global financial crisis that started from the subprime calamity in the U.S. is now spreading globally, and the impact that it will have on China-U.S. relations is worthy of concern.

The three pillars that have supported the U.S. empire for a long time- financial hegemony (dollar hegemony), military hegemony and cultural hegemony- have been heavily wounded in this financial crisis in a way never seen before. The ebb and flow of the balance of strategic powers between China and America is beyond expectation and improvement in China’s strategic posture comes earlier than expected, but it is groundless to judge that the “turning point” of the strategic power contrast between these two countries is coming. As a dollar empire with its foundation still intact, the U.S. is still a strong nation owning the most advanced technologies in the world and the American homeland still has huge production capacity. There is not a currency that can replace the dollar’s role, even though the dollar hegemony has been impaired somehow. Deep-rooted problems existing in China’s structure have been enormous hidden trouble, which limits its development. The strategic disparity between China and America can’t be erased overnight. It is a risky hallucination to think about challenging the world’s richest nation when China just discards the bowl used to beg food.

What can be certain is that the U.S. government, which names the financial crisis as its top priority, will be forced to focus on the domestic economy for some time. The outgoing American government, kidnapped by neoconservatism, ran the war machine, which greatly consumed the country’s strategic resources and impaired the country’s comprehensive strength. There are no other choices for Obama, who cried “change” out loud when assuming his presidency at a time of crisis, but shrinks to his front line. The newly elected government will turn its attentions from abroad to home, from military affairs to economic in the terms of administrative emphasis, resource allocation and policy focuses. During the time that the U.S. tries to pull its troops from Iraq and solve a few hot-spot issues by political means, the readjustment of its global strategic concerns and the construction of a new hub for its Asia-Pacific strategy within which Guam is the center, might be moderately slowed down. While America is busy with its own business, the strategic pressure China faces will get some relief though it will not vanish completely.

More importantly, against the backdrop of the financial crisis, working together to deal with the crisis is becoming a new base of strategy for Sino-American ties. The worsening financial crisis is the biggest threat shared by China and the U.S. these days. The degree of dependency on China by the U.S., who is anxious to jump out of the crisis, will widen and increasing strategic cooperation, including those for economy in this hard time, will further form a main rift of Sino-American relations. The past has witnessed China and the U.S. working together to form an anti-Fascist front to fight bravely against the Fascist powers of German, Italy and Japan and a historic handshake by China and America, who let go of past rancor, for a common goal to resist the expansion of Soviet hegemony. To counter international terrorism, the U.S. has to redirect its policy that once improperly treated China as its strategic competitor. It is not an enemy with a gun in hand that the two countries share today, but an economic disorder with grimness, damage and destruction never seen before and neither one of the two countries can deal with it alone. This new strategic pattern will widen the surface of cooperation between China and America by limiting the conflicts in traditional China-U.S. strategy constitution to a degree. The strategic tie between China and the U.S. will assume a new content and will get new development thanks to their cooperation against the financial crisis.

Some invoke the fact that World War II was a result of the world economic crisis from 1929 to 1933 and fear that the U.S. might begin a war to transfer the crisis. It is understandable, but the situation is not any more the same then as when a war could stimulate the stagnant economy, and the recession today is not caused by lack of stimulation, but excessive debt. War again, like drinking poisoned wine to curb thirst, will stimulate nothing but will backfire. It can be said that the economic friction and occasional shocks are inevitable but for the moment, they will not hit hard on Sino-American strategic relation. On the contrary, the economic interdependence and the increasing economic cooperation will bring a substantial improvement to Sino—American strategic ties.

(The author is an expert on China’s national strategy)