The Deceptive Harmony between Obama and Hu

Chinese President Hu’s official visit to the United States was a meeting between an up-and-coming world power and a troubled one.

Such a dramatic power shift between two major powers like the United States and China has rarely taken place in such a short timeframe. Even rarer is the fact that it’s not yet certain which power won and which lost.

That’s why state and party chief Hu Jintao and President Barack Obama were very circumspect at their meeting that ended today. Precisely because neither tried to trump the other, Hu Jintao’s visit was the most important one between the two powers since Deng Xiaoping’s 1979 visit as the first Chinese head of state.

The United States speaks now of a “win-win” relationship, a slogan that put China on tiptoes a few years ago in an attempt to see eye-to-eye with America. America now uses this slogan in an attempt to mask the fact that its own legs are beginning to give out. In August 2008, the Chinese gave the decisive push that began the global economic crisis when they publicly refused to continue giving money to the fully overextended, quasi-governmental institutions Fannie Mae and Freddie Mac. In so doing, they showed the world something that only insiders previously knew: China is the Bank of America.

Beijing, itself shocked by the extent of the collapse, then cushioned the fall with a quick and prudent economic policy and an economic growth rate that sent the Western exporting industries into euphoria. Now, at G-20 summits, as well as IMF and global climate conferences, the Chinese have graduated from participant to spokesman. And they now enjoy the goodwill of much of the emerging world at the U.N. Security Council table because of admiration or economic opportunism.

Chinese leadership has also undertaken the task of modernizing its military to seriously limit America’s operational radius. Now, ironically, they will do so with the assistance of American aircraft technology that, while intended for civilian use, can also be deployed militarily: China and the United States used the meeting to conclude an agreement for China to purchase billions of dollars worth of American aircraft.

Here’s where it stands: Obama has to trade new jobs for mid-range military security because the U.S. continues to suffer due to its weaknesses. While corporations are up to their necks in money and creativity, the government continues to go more deeply into debt. Unemployment remains frighteningly high and the U.S. dollar looks increasingly shaky as the global reserve currency.

No one in the current administration has been affected by the power shift harder than Treasury Secretary Timothy Geithner. He has all but used a crowbar to convince China it should revaluate the yuan upward ever since he took office. So far, the Chinese have responded with a paltry 3.6 percent increase. The United States is meanwhile poised to become the world’s second great declining empire after Great Britain. Now as then, the losers find it difficult to accept the fact that their roles on the world stage are finite.

So the stability and harmony both these powerful national leaders want to display to the world is illusory. They constantly remind the world how important it is that they cooperate, and that reveals a lot about the fears hidden behind the curtains of power. The transition from an old to a new order in world power is seldom crisis-free. It is, in fact, so rare that no one should depend upon it despite the close economic ties between the two nations.

Above all, the losers tend to become unpredictable during such periods of upheaval. They have much to lose and must therefore take greater risks that can lead to making mistakes that worsen the situation. America’s decision to print more money could well prove to be one of those mistakes that will eventually hasten its own collapse.

But the war for global dominance is far from over. The answers to the big questions attending this epochal power shift will come only gradually. China has to deal with how permanent prosperity can be while it limits the participation of its citizens. The United States must meanwhile deal with the problem of a democracy that’s going broke. It is feared that the Americans will have to deal with their dilemma first because an ascendant China can ignore its contradictions a little longer in the heady intoxication of an economic boom. But this doesn’t give any clue as to who will come out the bigger winner in the end.