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  Dueling Titans: China, the US and Battle to Lead a Globalized World

Dueling Titans China, the US and Battle to Lead a Globalized World

By Frank Hornig and Wieland Wagner

Part 4

American expansion in the Pacific began in the mid-19th century, when China's empire in eastern Asia was collapsing. Under the doctrine of Manifest Destiny, covered wagons headed toward the Wild West. After California was won in the war with Mexico (1848), there remained just one more territorial goal for the great United States: the Pacific. The Americans opened Japan to trade, colonized the Philippines and annexed Hawaii.

They arrived in China too late. But that did not stop them from rushing headlong into the fray with their "open door" policies and legions of Christian missionaries. As a result, they were not left out when imperial European powers and Japan divided up China. There was nothing arbitrary about China's first modern-style boycott being directed against the United States in 1905. In Shanghai and Canton, nationalistic students went on a rampage against the influx of American products.

Following the victory over Imperial Japan in 1945 and the downfall of the British Empire, the United States turned much of eastern Asia into a Cold War buffer against communism. The Americans clashed head-on with the Chinese for the first time at the end of 1950 during the Korean War, and suffered their first serious humiliation. When U.S. General Douglas MacArthur ordered his troops to the Yalu River along the border, Mao Zedong, the Great Helmsman, struck. Under cover of darkness, he slipped 180,000 soldiers from the People's Liberation Army across the river. Panic-stricken, the Americans fled as far south as the 38th parallel.

The forced retreat triggered by the only rudimentarily equipped but thoroughly disciplined Chinese - Mao had established the People's Republic just a year earlier - shocked the superpower. In Washington, President Truman threatened China with nuclear war. MacArthur drew up a list of 26 possible targets in China and North Korea. But things never escalated to that point. Instead, the two opposing forces reached a truce on the 38th parallel.

But now the Chinese are reasserting themselves in Asia. Turning on their diplomatic charm, they have used the allure of China's huge market to entice Asia's tiger states. By 2010, China intends to set up a free-trade zone of about two billion people with the ASEAN countries - making it the world's largest economic bloc. As part of its kid-glove diplomacy, Beijing is also winning over its neighbors one by one with bilateral agreements. At the end of April, for instance, President Hu Jintao sealed a strategic partnership with Indonesia aimed, among other things, at joint exploitation of the country's oil and gas reserves.

U.S. allies Japan and South Korea are becoming more and more economically dependent on their neighbor. China has already replaced the United States as the leading supplier to both countries. And even Taiwan, branded by the communists in Beijing as a renegade province, is forging stronger economic ties with the mainland. Well over 500,000 Taiwanese businesspeople work in China, where they run huge factories that churn out notebooks, monitors and cellphones.

Yet politically and militarily, both nations are eyeing one another warily. Beijing's threat to forcibly retake Taiwan - should the island declare independence - represents the biggest potential conflict with the United States. If that happens, Washington is required by law to consider Taiwan an issue "of serious concern." Major General Zhu Chenghu, a professor at the National Defense University in Beijing, has even threatened to use nuclear force against the Americans should the United States intervene in any conflict.

The volatility of the situation in eastern Asia became obvious last November when a nuclear-powered Chinese submarine slipped into Japan's territorial waters near Taiwan. In the aftermath of the incident, the United States and its loyal ally Japan jointly announced for the first time their strategic interest in the security of Taiwan. Resource-poor Japan gets 90 percent of its oil imports through the shipping lanes near the island.

In their own search for raw materials, the Chinese have even cut deals with regimes in Iran and Sudan, which Big Oil has tended to shun for political reasons. In Iran, the Chinese oil company Sinopec has sealed the country's largest energy agreement - worth $70 billion, locking up 250 million tons of liquefied natural gas for 30 years. In addition, Sinopec will be playing a major role in Iranian crude production.

China's close partnership with Sudan has also prompted concern. As a result of the atrocities in Darfur, the West has ostracized the country's leaders. But not the Chinese. Their CNPC oil company has assumed a leading role in production near the capital of Khartoum. Through a subsidiary, the company is building a refinery with a capacity of 2.5 million tons and a pipeline that will stretch 1000 miles to the Red Sea. The African country now supplies an estimated 8 percent of China's oil imports. The deal with Beijing is also paying political dividends for Khartoum. With China holding a veto on the U.N. Security Council, Sudan has little reason to fear international sanctions for human rights violations.

The Sino-American race for resources and global influence has subverted concepts of friend and foe in Asia. Both rivals are currently involved in a bizarre sort of bidding game for the favor of India, itself an emerging superpower. Within three weeks last spring, U.S. Secretary of State Condoleezza Rice and Chinese Prime Minister Wen Jiabao visited the subcontinent. To defend its rear, Beijing is doing its best to resolve old border disputes with New Delhi. In June, it signed an agreement with Russia that is designed to end a 40-year-old conflict over their common 4,300-kilometer border.

China is increasingly emerging as the leading regional power in Asia. Prior to the latest G8 summit, to underscore its newfound status, China organized a meeting of the Shanghai Cooperation Organization (SCO), a newly formed association of countries under its leadership. Beijing hopes that the organization, whose members include Russia, Kazakhstan and several central Asian states, will help bring stability to its restive western provinces.

At the same time, the group is designed to secure Chinese access to central Asia's resources. At this year's meeting in Kazakhstan, President Hu Jintao held negotiations on both the construction of a pipeline and the exploration of oil and gas fields in the host country. At the end of the summit, the participants revealed part of their packed agenda: Together, they called on the U.S. to withdraw the troops it has stationed in central Asia since its war against the Taliban.

Regardless of which countries George W. Bush and Hu Jintao visit, the man from Beijing is faring better with his ideologyfree stance. In Australia's parliament, Bush was met coolly during his last state visit; just a short time later, the Chinese president received something of a hero's welcome. "Had you not known otherwise, you would have concluded that Hu's country was the longtime ally and Bush's the threat," Prestowitz observed. The pattern was echoed in Malaysia: On his first trip abroad, new Prime Minister Abdullah Badawi did not head to Washington. Instead he went to Beijing - accompanied by a delegation of 800 businesspeople.

Around the world, governments are busy adapting to the new world order. U.S. companies in particular want to keep in the new superpower's good books. For instance, in accordance with Chinese law, the software giant Microsoft prevented users of the country's official website to search for terms considered objectionable by its communist rulers.

Among the offending words: "democracy" and "human rights."