My Take

China and United States must make the best of their bad marriage

PUBLISHED : Saturday, 12 October, 2013, 12:00am
UPDATED : Saturday, 12 October, 2013, 1:55am

Ideologues are boring because you know what they will think and say before they utter a word. So with the spectacle of a government shutdown and the threat of a sovereign default in Washington, you end up reading in Hong Kong the same well-rehearsed arguments for and against democracy.

A wise and centralised governing system like China's will never allow such a government shutdown and threat to sovereign creditworthiness, the pro-Beijing crowds gloat. The pan-democrats counter that no, such gridlock only slows government operations but the system is robust and intact; ultimately, those terrible politicians blamed for the crisis will be voted out, something you can't do with an autocratic system.

Actually, the gridlock in Washington is peculiar to the US political system and history, and is not necessarily characteristic of democracy in general.

What is far more interesting is that while Beijing's cronies in Hong Kong are watching the spectacle with glee, their masters up north are worried sick and can't wait for American leaders to resolve the crisis as quickly and amiably as possible. What many people often forget is that Sino-US relations are like a bad marriage: the two sides may hate and distrust each other, yet their assets are all tied up together.

Of China's US$3.5 trillion foreign reserves, about 60 per cent are invested in US assets, mostly Treasury debt. You can see why the Chinese are seriously worried about a potential default if the debt ceiling isn't raised. Premier Li Keqiang and Zhu Guangyao , the deputy finance minister, have pleaded with Washington to take care of Chinese investments. Big US Business is fully exposed to the Chinese economy.

A symbiotic relationship between the world's leading one-party dictatorship and its most powerful democracy; a developing country that is the largest creditor to the world's wealthiest nation: these things turn our usual mental picture of the world upside down and undermine the very categories into which we place them.

The usual ideas about democracy and authoritarianism, about free market and state capitalism, are no longer adequate. The old ideologies are poor guides to the world we live in today.