As China wakes, US must not be caught napping

• Last Updated: April 13. 2009 9:30AM UAE / April 13. 2009 5:30AM GMT

In the space of three decades China has progressed from a state of developing-world poverty into being the world’s largest pawnshop. This is not to disparage China: it is providing a very necessary service – as the United States surely understands, having hocked hundreds of billions of dollars of Treasury bills to Beijing. Indeed, whenever trouble comes, China today is looked upon as the country with the deepest pockets, holding nearly US$2 trillion (Dh7.35 trillion) in currency reserves. So when the IMF or the Asian Development Bank need cash, the name that comes up most often is China. Beijing should also be commended for volunteering assistance, such as its offer to establish a $10 billion China-Asean fund to build infrastructure that better links South East Asia with China.

The country has come a long way. With each regional or world crisis it has grown bolder and more sophisticated in its response, in lockstep with its rising stature. During the 1997-98 Asian financial crisis China helped to prevent further turmoil by resisting the temptation to devalue its own currency. Today, when positive, rather than implicit, support is needed, it has been appropriately generous. With the Asean initiative, it has also shown an appreciation that an Asian power must rise to support Asian neighbours.

However, all countries have interests, and decisions are always predicated on influencing situations to their benefit. For a decade China has sought to build up its soft power assets in South East Asia to ensure the flow of raw materials for its industries, freer transit of parts from regional factories to its own assembly lines and, increasingly, a growing market for finished goods – the last a conscious effort to grow blocs of export destinations to compare eventually with Japan or Europe. Certainly, China has been successful in this regard, gaining substantial goodwill. But what is regrettable about its strategy is that it does not cause Beijing any discomfort to do business with and to support repressive and regressive regimes. Principally motivated as it is by economics, it is untroubled by the seaminess of regimes such as that of Myanmar.

The United States, which is seeing its stock decline in South East Asia as China’s rises, likewise has self-interested motivations in its foreign policy. The difference is that America’s interest in its security converges with those of friendly nations. And while moral calculations are not the starting point of its policies abroad, they often (although not always) meet at the point of virtue – because liberalism, variously constructed, serves America’s goals. For this reason, when America is more greatly engaged in a region the result is more probably (but not always) peace and stability in that area. North Korea is a glaring example of the instability that can develop when the US becomes so focused elsewhere that it is unable to give full attention to a rogue regime.

There is no easy way out of this predicament. A United States already deeply in debt must deploy resources sparingly. Yet a failure to renew engagement with neglected areas – particularly developing nations – leaves the competition for influence open to others, such as the Chinese. Yes, the world needs China’s economic resources. In the longer run, however, it also needs the United States to provide momentum for the project of liberalism.