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April 21, 2006

The War on Terror Is Over,
and China Won

by Leon Hadar

Imagine 40 years from now how a global affairs columnist for the Fox-Xinhua (or New Shanghai Times) content-providing service will analyze the world's geo-strategic and geo-economic balance of power. This might be the way he or she recalls the visit that China's former president Hu Jintao made in April 2006 to Washington, the capital of what was then known as the "United States." Now in 2046, the city is a major tourist attraction for Chinese and Indian tourists, many of whom stay at the seven-star hotel previously known as the "White House" (the Lincoln Suite is the most expensive).

He or she (cloned in 2011) might write the following:

"As I downloaded news reports that were published in the American media on that week, what really astonished me was the extent to which President Hu's first visit to the then U.S. capital since becoming China's paramount leader had received so little attention in the American press. The headlines in the New York Times and the Washington Post (both of which have since been bought by our parent company) were devoted to U.S. efforts to prevent Iran from gaining access to nuclear military capability – Iran conducted its first nuclear test two years later and is now a leading nuclear military power – and to the violence in what was known then as 'Iraq' (now divided between Turkey, Iran, and the Syrian Federation) and was still occupied by the U.S. (which withdrew from there two years later).

"And believe it or not, much of the media coverage on the eve of the visit was focused on the refusal of the Americans to call Mr. Hu's trip to Washington a 'state visit' (as the Chinese had requested).

"Indeed, in retrospect it does seem quite incredible that the nation that was the global superpower of that period seemed to have ignored China's dramatic rise in economic, political, military, and cultural power while devoting almost its entire resources to trying to achieve regime changes and implant democracy in the Middle East.

"During the first term of the presidency of George W. Bush (whose nephew George P. Bush is now the president of the Florida-Cuba Federation), he and his aides saw China as a 'strategic competitor' (the Pentagon) and as an important trade partner (corporate America), and committed themselves to place the relationship with Beijing at the top of Washington's global agenda.

"But the terrorist attacks on New York and Washington on Sept. 11, 2001, resulted in the bumping of China to the diplomatic back-burner.

"On the one hand, obsessed with the 'war on terrorism,' the Americans shifted most of their attention to the Middle East while pressing the Chinese to work with them to combat the 'terrorist threat' (which they did).

"On the other hand, when it came to the Chinese, U.S. officials and lawmakers focused most of their energy on forcing them to allow their currency to rise in value, so as to reduce what they considered to be an unfair advantage Chinese exporters enjoyed against U.S. manufacturers, and help shrink the U.S. trade deficit with China, which soared to U.S.$201 billion in 2005.

"At the same time, the members of a group of intellectuals who were known then as 'neoconservatives' and who were a major influence on the Bush administration's policies argued that the U.S. needed to gain hegemony in the Middle East and use its control of the oil resources there as a leverage in its negotiations with China, which they regarded as America's long-term global rival.

"What was missing from U.S. foreign policy at that time was any coherent strategy aimed at integrating China as a rising global power into the international system. Then-Deputy Secretary of State Robert Zoellick came close to proposing such a strategy when he called Washington to embrace the 'peaceful rise of China' and asked that Beijing become a responsible stakeholder in global affairs.

"But the failure of president Bush to draw the outlines of such a strategy and try to implement it meant that American policy toward Beijing ended up resembling a mishmash of ad-hoc responses to Chinese moves, most of which reflected the pressures of anti-China forces in Washington (the Taiwan lobby, human rights organizations, protectionist groups).

"With China emerging as the second largest oil consumer after the U.S., Beijing increased its diplomatic engagement worldwide, including with anti-American players such as Iran, Sudan, and Venezuela. The Chinese also started to advance multilateral forums for cooperation in East Asia that excluded the U.S. And the Chinese continued to modernize their military and to assert their claim to Taiwan.

"Moreover, China's impressive economic growth only helped to strengthen the hands of lawmakers and pundits in Washington who blamed the Chinese for America's declining manufacturing base.

"It was not surprising, therefore, that when President Hu visited Washington in April 2006, a politically weak President Bush found himself under pressure from Capitol Hill to 'do something' about the mounting trade deficit with China.

"But there was not much that the White House could do to compel major changes in China's trade practices, especially when the Chinese were using the U.S. dollars they earned from their exports to invest hundreds of billions of dollars in U.S. Treasury securities, thereby helping not only to finance the American military project in the Middle East, but also to keep interest rates low for American borrowers.

"Mr. Bush and his aides recognized that a trade war with the Chinese would have devastating effects on U.S. economic and diplomatic interests. But during the 2006 mid-term congressional elections, with trade policies – together with Iraq and immigration – dominating the campaign, lawmakers demanded that Washington 'punish' China for its 'unfair trade policies.'

"Tensions between the two powers continued to rise. A more assertive China used its diplomatic and military power to gradually erode the U.S. presence in East Asia. In fact, with its military overstretched in the Middle East, Washington had no choice but to reduce its commitments in East Asia, where a unified (and nuclear) Korea, Japan, ASEAN, and India took steps to accommodate Chinese power.

"Interestingly enough, after retiring in 2030 from his position as president of the East Asian Union (EAU), former President Hu, looking back on his trip to Washington, told me: 'We were quite content to see the Americans being drawn into the mess in the Middle East in the name of fighting terrorism. We assumed that the war on terrorism would end one day, and that we – and not the Americans, exhausted economically and militarily after years of fighting in the Middle East – would emerge as the winners. We were right."

Copyright © 2006 Singapore Press Holdings Ltd. All rights reserved.

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  • Leon Hadar is the author of Sandstorm: Policy Failure in the Middle East (Palgrave Macmillan). He is the former United Nations bureau chief for the Jerusalem Post and is currently the Washington correspondent for the Singapore Business Times. Visit his blog.

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