The Times they are a-Changing

By MICHAEL S. SMITH II, Executive editor of The Ethical Standard: Official Publication of The Free Enterprise Foundation

China.

Today this country name brings to mind more disparate perceptions among peoples the world over than any other, and some say that even most Chinese should be included among the people targeted by that generalization. Yet a common thread emerges from the thoughts of most all people when that name is invoked. Irrespective of whether their perceptions of that country are positive or negative, uncertainty is the thread that binds those thoughts. And it is the uncertainty about what China's interests really are -- not whether it will be the next superpower (it will) -- that represents the basis for the uncertainty of America's future role in the world.

More than any other great or emerging power on the planet, China's interests -- in terms of most non Chinese observers' understandings of those interests -- are increasingly the stuff of Churchill's oft-partially-quoted 1939 remarks regarding Russia: "I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest."

Some analysts, particularly those from America's financial sector, are quick to offer rosy depictions of what the future of U.S.-China relations will be. According to them, while China may be a riddle that's wrapped in a mystery, that mystery is steeped in a trillion dollars worth of U.S. Treasury bonds which will insulate America from any malice of forethought on the part of the Chinese.

With a view of the world through their dollar sign-shaped ethnocentrically-clouded lenses, members of that camp of "thinkers" believe there is no great Chinese mystery with which Americans should concern ourselves. Their optimism may be surmised in the following terms: Chinese efforts to effect a demotion of America from its position of leadership on the global stage would simply prove counterproductive in terms of Chinese interests abroad. According to their thinking, the Asians are far wiser, and far more invested in America's future than the leaders of Russia, Iran, Venezuela and other great and emerging powers whose leaders seek to relegate America's role in a new world order they hope to create.

One can only hope this is not a pervasive view among members of the president's National Economic Council. After all, many of America's more outspoken financial experts refuse to consider it is possible that in my lifetime the U.S. might find its economy ranked fourth in the world, lagging behind Brazil, India and China, in ascending order, that is. (History tellingly reveals many of those experts and their mentors worked hard to convince the mainstream media in the U.S. that the Soviet economy offered a picture of vibrant expansion up until the U.S.S.R. collapsed.)

Wiser is China's leadership than Iran's, Russia's or Venezuela's? Well, sure. But disinclined to support those cuckoo-nest-flyers' ambitions, I'm not so sure.

Something that camp also diminishes from relevance in its discussions about China's interests: China's naval fleet, in terms of hardware and boats, is the fastest growing defense force -- or, depending on one's interpretations of Chinese national interests, offense force -- in the world.

A review of technologies developed by the Chinese military industrial complex is telling. Even open source reports reveal the foci of China's strategic weapons programs are, in large part, the development of weaponry capable of crippling the mobility of U.S. forces, thereby positioning theirs as the country that is the most capable of interdicting mass U.S. troop movements. (What are missiles designed to destroy aircraft carriers and shoot down satellites, Alex?)

Dually, China's insatiable and growing appetite for natural resources that it cannot harvest from within its own borders is ever apparent.

In terms of competition for access to those resources, the U.S. is China's leading competitor. In terms of which nation is easier to do business with for the nations in possession of those resources, China is the winner.

China's obvious comparative advantage over the U.S. when it comes to brokering commodity-focused trade deals abroad is rooted in China's focus: The Chinese are focused on their commercial interests, not the myriad of tangential concerns that mire U.S. trade policies, and thus private-sector dealings with America. (Then there's the whole matter of America's shaky credit rating.)

The Chinese, for instance, could care less about such noncommercially relevant matters as how leaders treat the peoples of countries in possession of resources that are desirable to them. China, for instance, could also care less about which oil-producing countries funnel profits garnered from crude sales to terrorist organizations, particularly when disrupting the Great Satan's commercial relations with the Middle East is a primary objective of so many of those organizations.

In 2009, China usurped the U.S. economy's influence in America's own backyard, becoming Latin America's leading trade partner. That news was as shocking for most as the news that the U.S. became a net importer of wheat the year before.

Looking forward it will not be long before China will be the leading commercial force across both Africa and Arabia. (Some believe that time is now.)

Each of those regions plays pivotal roles in the global paradigm of U.S. foreign policy. Thus so too will China, and in as much of a direct as an indirect manner that no other nation has since Russia did during the Cold War.

While access to oil is at the fore of China's interests abroad, China happens to be the world's largest harvester of another critical resource in terms of power supply for many electric grids the world over -- coal. Comparing China's coal output to that of the world's second leading harvester, the U.S., is like comparing the assembly line outputs of Ford and Tata Motors -- although it may not be long before India's newest auto brand catches up.

Given such, the Obama administration's support for efforts to implement new Cap and Trade legislation in the U.S. -- legislation the administration hopes will serve as a benchmark for other industrialized nations' "green" policy entrepreneurs, legislation that could thereby severely hamper the global coal industry's future -- is likely being interpreted by the Chinese as an affront to China's "national interests." In their eyes, such policies are likely interpreted as being less about environmental protection than they are the stuff of U.S. economic statecraft.

Put in that light, it is perhaps ironic that the president is today unwilling to demonstrate decisiveness over the very real need to take the fight to a bunch of cave-dwelling Islamists in Persia, but he is concurrently happy to employ some rather confrontational posturing on the U.S.-China relations front.

On September 23, the Financial Times reported China has formalized arrangements with Iran (a net importer of gasoline) that could make China Iran's leading supplier of gasoline in the years ahead. According to the report: "Chinese state companies this month began supplying petrol to Iran and now provide up to one-third of its imports in a development that threatens to undermine US-led efforts to shut off the supply of fuel on which its economy depends."

Americans may rest assured the above cited report represents a situation that is itself a veritable canary in the coal mine of things to come. This prospective future will be certain if the Obama administration continues to overstretch its political capital in trying to "fix" America's health care system, etc., rather than focusing on the health of the U.S. economy and America's commitment to destroy al Qaida's operability to the international community. After all, as the value of the dollar falls, China is left holding fewer reasons to cooperate with America's interests. Or is it that China is left with more reasons to disregard those interests?

As China rises it is important for the Obama administration to consider that denying the Taliban, al Qaida and other radical Muslims a place from which to (re)organize and plan attacks similar to those of 9/11 represents a significant avenue through which America could retain some of the good faith many developed nations extend to us, both diplomatically and commercially. Failure to succeed there in such terms leaves many nations with fewer reasons to sustain their alliances with America, particularly as we remove plans to protect the EU from both Iran's and Russia's Russian-made missiles while increasingly resorting to protectionist trade policy measures.

It is equally important for the administration to consider that perhaps now is a better time for focusing on completing certain projects before starting new ones (i.e. It's the economy that should be the focus of the day, not health care (insurance) reform).

Stumping on the campaign trail in 2008 Joe Biden mentioned some advice given to him by one of his forebears: Show me your budget and I'll tell you what your priorities are. While American strategists may be looking to China with that maxim in mind, China is looking to President Obama for answers about what America's priorities are so that China can, in turn, tell the world what America's future role in it will be.

Hopefully the Obama administration is aware of this new, but very real change. Given this change, the president must better define how the U.S. will operate on a dramatically different global stage that we no longer own.

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Copyright © 2009 by Michael S. Smith II and The Free Enterprise Foundation. All rights reserved

About the author: Mr. Smith is executive editor of The Ethical Standard: Official Publication of The Free Enterprise Foundation. He is also a contributing editor for SCHotline , a Columbia, S.C.-based conservative-oriented news aggregator site. Mr. Smith is a member of The Monday Meeting, an influential forum for conservative policy-makers, business leaders and journalists hosted in New York.

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