At 7:40AM on the 20th, the new American Secretary of State Hillary Clinton boarded a special flight to the Beijing Capital International Airport, kicking off her visit to China. Although Japan, Indonesia, and Korea were scheduled at the first part on her first trip as secretary of state, the world’s attention is trained on her last stop – China. The reason that China is the focal point in Hillary’s “listening tour” is on the one hand due to the power of America and China, and on the other hand because of how Sino-American relations will effectively increase cooperation (which is a topic receiving global attention) against the backdrop of the spreading, continuing global financial crisis.
Objectively, America’s comprehensive national power far surpasses that of China. Along with the deepening of trade, political, and military ties, comprehensively speaking, America needs little from China, while China needs much from America. Because their actual power is certainly unequal, America in the last ten or so years held the upper hand in the Sino-American dialogue. Often, America’s action in the dialogue was simply to hand down a long list of demands to the Chinese side. However, in the last few decades, due to the efforts of our people’s persevering diligent work, the ratio of comprehensive national power has day by day slowly tipped toward China. Today, the change is already relatively apparent, beginning with America’s subprime mortgage crisis, which has deeply damaged the nation’s power.
The crisis has already caused America to make requests of China in regards to the question of its survival. If America truly wishes to acquire China’s great support, then the first condition should be that within its responsibility and ability it protect China’s interests. On the contrary, the actions of some powers in America have harmed China’s interests. In his recent Senate nomination hearings, American Secretary of Treasury Tim Geithner accused China of “currency manipulation.” It can thus be seen that within the realm of trade alone, there are many issues that America needs to directly face with China because its problems and even anti-crisis plan are posing a threat to China’s interests.
It goes without saying that the “Buy American” provision of Obama’s economic stimulus plan has already created global ripples. What’s even more important is that Obama’s economic stimulus plan may harm the power of China’s reserve assets. Because the U.S. domestic savings rate is too low, the Treasury has for years gotten by relying on a cycle of using new loans to pay old debts. The scale of America’s debt is massive and expanding daily; on February 12th it had reached $10.76 trillion, rising $3.4 billion daily, causing many to accuse the American Treasury of fundamentally being a Ponzi scheme.
China is one of America’s biggest creditors. According to the U.S. Treasury International Capital Flow Report, at the end of December 2008 the U.S. had a Chinese debt of 696 hundred billion dollars, up 14.3 billion from last month. According to the estimates of the congressional prediction office, even without taking into account Obama’s 787 billion economic stimulus plan or Geithner’s new 200 billion financial recovery plan, America’s 2009 fiscal year debt will reach 1.2 trillion. If the expense of the economic stimulus plan and financial recovery are counted, the Treasury’s debt will account for 13.5 percent of the GDP, far surpassing the 1983 historical record of six percent. Such a massive debt can only be managed by issuing bonds. A massive issue of bonds is ill-profitable for holders of old bonds.
Obama recently signed an 875 billion dollar recovery plan, and the economic problem is without a doubt the new American government’s top priority. Furthermore, the economic problem it is currently facing certainly can’t be solved on its own – it needs the aid of other nations. As one of America’s top economic partners, China also has a very strong economic recovery plan.
Under the conditions of today’s global economic situation, equal and mutually-beneficial Sino-American cooperation is not only advantageous to both nations, but the rest of the world as well. Hillary should be quite clear of this, as she assessed in the diplomatic periodical “Foreign Policy”: “In this century, Sino-American relations are the world’s most important relations.”
According to a media release, Hillary will be discussing with China several important topics, the contents of which will range upon the financial crisis, climate change, resources, etc., hopefully fully expanding the framework of the Bush era’s U.S.-China dialogue. At the main stop of her Asia tour, she reiterated that America and China must have an even more complete and comprehensive dialogue above and beyond the current strategic economic dialogue.
America will also discuss with China the best method of dialogue. Hillary used the term “in the same boat” to describe Sino-American relations. We’re not hoping for Secretary Clinton to overstep her boundaries and fill at once the roles of secretary of commerce, trade representative, secretary of the treasury, and Federal Reserve chairman, and resolve concrete Sino-American trade problems. But we do hope that she will put forth a full effort to change the comprehensive American foreign policy toward a more practical and reasonable direction. Hopefully, America will come to more fully understand the true meaning of “in the same boat.”