Bully in a China shop

PUBLISHED : Thursday, 03 May, 2012, 12:00am
UPDATED : Thursday, 03 May, 2012, 12:00am


They're so helpful, aren't they? Willing to take in blind dissidents or runaway policemen, without a thought for themselves. Keen to offer endless advice on economic management, even though most of it doesn't work. And always enthusiastic to make friends with the neighbours, and not just the troublesome ones.

Since US Secretary of State Hillary Rodham Clinton laid out her new foreign policy agenda at the end of last year, America's diplomats and politicians have been stomping across Asia like bulls clattering through a porcelain factory.

This is to be 'America's Pacific Century', says Clinton, throwing down the gauntlet to Beijing. As relations between China and America have shifted, it has become clear how much there is to play for. At stake is not just a power play on the world's stage for political influence and military reach. There is also rivalry for resources, as demand for the world's oil, water, copper, zinc and many other raw materials begins to exceed supply.

Even more vital, America's posturing in Asia is about political and economic ideology. 'The future of politics will be decided in Asia,' Clinton said in a speech last November, promising that 'the United States will be right at the centre of the action'. The battle is not just about who runs the world, but how they choose to run it.

After years of being shunned, Myanmar is suddenly in play, with the promise of sanctions being lifted as long as the generals change course and opt for the free-market, democratic model. This change has little to do with America wanting to shine a beacon of freedom into the dark Myanmese undergrowth, however. It is mainly about muddying China's geopolitical waters. China has been building vital strategic gas and oil pipelines across Myanmar to Yunnan. It has gained access to many of Myanmar's resources and won contracts to build dams and other infrastructure projects. All these plans are now in jeopardy.

Similarly, America's diplomats have been only too happy to offer temporary sanctuary to Bo Xilai's renegade police chief, Wang Lijun, and human rights activist Chen Guangcheng .

America's military have merrily carried out manoeuvres with the Philippines, strengthened ties with Vietnam, announced a new base in Australia and talked of selling their latest weapons technology to Taiwan.

Timothy Geithner, the US Treasury Secretary, has even said the US is now 'willing' to open up its markets to China if Beijing makes progress on its economics homework. America's verdict on pupil China: could do better.

To fix more than a decade of Asian diplomatic neglect, America has adopted a 'shock and awe' approach in the past six months, in an effort to change minds and hearts quickly.

Beijing, which seems more frustrated than angry by this sudden hike in belligerence, has responded little so far, saying only that America is 'endangering peace' by its actions. It sees itself as a victim of US hypocrisy - again.

And, for sure, the hypocrisy is staggering. The US has a dreadful human rights record. It imprisons people for years without trial. It assassinates those it claims to be terrorists, and makes the decisions to kill them without independent judicial review. It promotes a democratic system where only the rich can get elected and where policies are manipulated by big business. It is plagued by obesity, criminality and poverty. The free-market economic model it forces down everyone's throat has brought it to the edge of bankruptcy, with liabilities larger than any other country on earth. The gap between rich and poor is one of the largest in the developed world. America also prints money, manipulating the value of its currency.

And it is not even very free. In the press freedom index put together by Reporters Without Borders, America ranks 47th, five places behind Botswana.

America is playing a dangerous game as well as a hypocritical one. Instead of offering leadership, it is providing arrogance and unilateralism. And, despite the apparent views of many US politicians and diplomats, China does not just have to sit there and take it.

Beijing is a huge buyer of US government bonds, helping to finance America's massive budget deficit. China supplies a vast array of goods which the US would find impossible to buy elsewhere at any similar cost. A little more friction and the US could quickly find that Chinese-exported inflation and product shortages could punch the wind out of its uncertain recovery.

Hundreds of the biggest US companies are heavily invested in China, with billions of dollars of assets, and lots of technology, potentially at risk. America's new policy is also driving China closer to its rivals, in South America, with the government in Iran and with political leaders in parts of Africa.

The tone America has set during the past six months is all the more troubling for the rest of us, when there are global and regional issues to be addressed, such as climate change, economic recovery and financial regulation. We need the two world powers to co-operate. Right now, they are on a collision course.

Graeme Maxton is an economist and author