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01/29/2010

When China sneezes, the whole world gets a cold. Bill Clinton recognized this during his term as United States president, speaking of the "potential challenge that a strong China could present to the United States in the future." At the same time, he warned of the risk presented by a "weak China," which could destabilize large regions of Asia.

Now Clinton's successor and fellow Democrat Barack Obama is looking for ways to work more closely with the giant nation, with its 1.3 billion people. Obama believes that cooperation with China is essential in the coming years. "The major challenges of the 21st century, from climate change to nuclear proliferation to economic recovery, are challenges that touch both our nations, and challenges that neither of our nations can solve by acting alone," the US president said during his recent visit to China.

In China, meanwhile, politicians, economists and the military come to much the same conclusion when they brood over how best to interact with that old superpower, the US. "In the 21st century," says the Chinese president and party leader, Hu Jintao, "relations between China and the US are among the most important in the world." There is the perception that, without American help, it will take a long time for China to achieve the "moderate prosperity for all citizens" that the Communist Party promises its people and uses to justify its rule.

Never have the two countries been more dependent on one another than today. Without the American market and American investments, things wouldn't be looking as good as they do in China. But at the same time, many Americans would be struggling to make ends meet during the current economic downturn without cheap imported Chinese goods. And the American government would no longer be able to function if China's central bank didn't buy so much American debt. Last year, China held US Treasury securities worth around $800 billion (€570 billion).

The Rise of Chimerica

Former US National Security Advisor Zbigniew Brzezinski sees a geopolitical shift from the Atlantic to the Pacific. He calls China and the US "the Group of Two that could change the world," while economic historian Niall Ferguson coined the term "Chimerica" to describe his view that the two countries are so closely joined, they have long since formed "one economy."

One side gives while the other takes: Does that make Chimerica a match made in heaven?

China's newfound economic strength is causing uneasiness in the US. Seeing their country become increasingly dependent on decisions made in a faraway part of the world is an unfamiliar sensation for American businesspeople and politicians. Worse still is watching those decisions be made by communist rulers. The People's Republic has not only overtaken the US as the number one investment destination for foreign money, but Beijing's $2.3 trillion in foreign currency reserves also give Chinese firms the ability to acquire portions of American companies -- as happened with the computer giant IBM, for example.

Strategic Reassurance

"We feel the hot breath of this economic dragon on our backs," writes Susan Shirk, a professor and former deputy assistant secretary of state under the Clinton administration, in her book "China: Fragile Superpower."

That's why US Deputy Secretary of State James Steinberg coined the phrase "strategic reassurance" to describe his country's relations with China. The idea is as follows: If Washington and its allies welcome China to the international arena as a "prosperous and successful power," then Beijing "must reassure the rest of the world that its development and growing global role will not come at the expense of security and well-being of others," Steinberg explains.

The Pentagon is watching uneasily as China builds up its army and -- in particular -- its navy. The military show held at Tiananmen Square last year to celebrate the 60th anniversary of the founding of the People's Republic of China both impressed and alarmed the entire world.

Naval Ambitions

It's only a matter of time before China launches its first aircraft carrier. The US military and intelligence services are also watching nervously to see if China succeeds in developing an effective anti-ship missile that could compromise American aircraft carriers. According to its own accounts, the Chinese army recently successfully tested a defense system that could destroy intercontinental missiles.

Some harbor suspicions that China's intentions may not be quite as peaceful as the country always claims. Naval ships disguised as fishing boats cruise with increasing frequency through the South China Sea, where China has territorial disputes with Taiwan, Vietnam, Malaysia, Brunei and the Philippines over the tropical Spratly Islands and with Taiwan and Vietnam over the Paracel Islands.

Chinese warships also now patrol along the Somali coast to protect Chinese ships carrying raw materials from pirates. American experts have never before located so many Chinese submarines making such long patrols so far from the mainland as they have in recent months.

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• Part 1: Two Superpowers Take on the World
• Part 2: 'We Need America to Strike a Balance'