Suddenly, China has acquired a new importance for America. It needs to be reassured the safety of its money- estimated at $1.16 trillion in US Treasury bonds, after the public spectacle the White House and Capitol Hill staged over managing the country’s debt.
So, not surprisingly, Vice President Joe Biden spent four –days in China telling his hosts that your money is ‘safe with us’ and reiterating that Washington has ‘an overarching interest’ in protecting China’s investment in US debt. The message he delivered was: ‘The United States has never defaulted, and never will’.
It is too simplistic to argue that Biden’s China journey brings home the changed equation between the US and China and that the American dollar which is generally considered as good as gold has lost is sheen. The US still remains miles and miles ahead of its nearest competitor for the exalted position of economic super power. So there is no question of worrying whether the US will default as it begins to look inwards and emerge as a Fortress with all the approach roads closed. A deliberate weakening of the dollar and a quiet revaluation of the Chinese Yuan are the unspoken concerns today. These are compounded by debt crisis in the Europe, which along with America is the major destination for Chinese exports. In the present stage of social instability, China can ill-afford to import inflationary pressures.
In a manner of speaking, the US and China are in a made for each other situation despite their rivalry in every sphere. Each has a vested interest in the economic well-being of the other. China will not like to see any factory closures and consequent job losses leading to unrest. American business doesn’t want China to lose its export competitiveness which in turn will affect the returns on their investment in the land of Mao. Most major American MNCs have their manufacturing base in China’s economic zones, and going by reports they are aggressively stepping up their investment since the Bamboo Capitalist is generally living unto the promise of hassle free business climate with sweatshops of all hues and sizes. If there are any strikes in some plants, like for instance, Japan owned, these had something to do with the displeasure Beijing has with the government of the investor friend.
Vice President Biden made the mandatory rounds of think tanks, universities and business conclaves and held discussions with his Chinese counterpart, Vice President Xi Jinping on peaceful and mutually beneficial cooperation even as homilies were hurled at him by dozens. On his part, he appears to have held his own discourse on the US as a true Pacific Power and its interest, as a corollary, in the Malacca Straits and South China Sea as well. Anyhow both sides know that it is economy that matters in the end- the green back and the Yuan. And they have no differences on that score. It is not without reason both dismiss the suggestion that. US-China relations are a zero-sum game. The Los Angles headline summed up the mood neatly with the headline that read: ‘He visits China, ignites no war’
– malladi rama rao
