For many Americans, the vast amount of United States debt owned by China appears to be the product of economic blunder by those in the United States government. As a result of this debt, the United States’ interests are increasingly tied to China’s, and any US foreign policy must, to some degree, be in line with its creditor’s. The US simply cannot act on its own accord without worrying about ramifications from China. However, if most people can plainly see the shortcomings of such a precarious policy, then certainly US politicians and lawmakers must have been able to. Therefore, the Sino-American economic entanglement begs one to ask, “why?”

There are a number of potential reasons for allowing China to accumulate so much of the United States’ debt: the immediate need for credit to conduct expensive military campaigns, funding domestic policies at home to bolster the economy, bailing out the large banks who neared oblivion in 2007-08, or perhaps just poor oversight and political ignorance. However, when understanding the degree of binding that such a deep international economic relationship creates and its potential for simultaneous economic disaster, another motive for the Chinese accumulation of US debt arises. That, by recognizing China’s unstoppable rise to becoming a superpower, America may have engaged another policy of “mutual assured destruction” in order to avoid its own demise.

The World’s First Cold War

From roughly 1947 to 1991, The United States of America was engaged in a bitter ideological struggle with the Union of Soviet Socialist Republics. One, the beacon of a democratic Capitalism;  the other, the pinnacle of an authoritarian style of Communism: the two nations and their respective economic systems simply could not coexist in an ever-shrinking world of globalization. But in the latter part of the 20th century, a total war was not possible without promoting mankind’s extinction. As such, to quietly ensure the other’s defeat, the USA and USSR began a revolutionary “Cold War”: a war not of armies on the field, but of spies in enemy society, of technological competition and public showmanship on a global scale. These very subdued battles were meant to undermine and collapse the enemy, and to show unsure nations of the world that each’s economic modality was the sole answer to prosperity.

That is not to say that the USA and USSR were not close to a massively violent war. In fact, one of the most exciting, terrifying and, thankfully, non-existent factors of the Cold War was its alarmingly possible nuclear side. The effects of a nuclear weapon were displayed to the global community during the close of World War II when the United States unleashed its effects on Hiroshima and Nagasaki. These bombings completely devastated those areas, creating adverse radiological effects on the Japanese people that remain in some degree to this day. The prospect of two major world nations exacting similar–if not greater–damage multiple times over on each other’s cities created an unusual stalemate. This stalemate of fear was the root of the Cold War’s nonaggression: that if one nation were to launch a nuclear weapon, the other would respond accordingly and both nations would crumble in a mutually assured destruction.

After the USSR’s economy crumbled, the United States emerged as the sole nation to direct the global narrative. The United States was enjoying unquestioned power, an absolute hegemony: for its 50-year-Carthage had been defeated. Such power, however, did not last very long. Over the last ten years or so, the United States’ position as a leading global authority has been lessened by the remarkable success of China; the most populous nation in world.

Sino-American History: Cautious At Best

During the Cold War, it was clear that the USSR was at odds with the US. The doctrine of Communism that was the lynchpin of Soviet society called for the destruction of Capitalist societies–and there was no society that defined Capitalism more than the United States. But China’s position on the United States is a bit more complex. Because of this complexity, certain histories must be discussed to better assess the standing between the two nations.

The first instances of contact between China and the United States occurs from roughly the time of the latter’s emergence as a nation to about the middle of the 19th century. Known as the “Old China Trade“, it was during this time that merchants sailing from busy American ports, most notably from Salem, Massachusetts, began voyaging to the eastern nation to trade their exotic wares back in the US. This was the development of a friendly, but strictly business, relationship; a relationship that created wealth and jobs but did little to forge any kind of alliance. A young America was now opened to the east.

The relationship continued without much trouble well into the 19th century. However, as the United States’ economy grew around the time of the California Gold Rush, the prospect of a stable and prosperous life attracted many immigrants from China. Americans reacted harshly to this wave of immigration, essentially forcing these newcomers into ghettos that gave birth to the modern urban Chinatown phenomenon. This xenophobia extended into the Federal Government, when in 1882 President Chester A. Arthur passed the Chinese Exclusion Act, banning immigration from China as well as preventing already-resident Chinese from citizenship and employment.

Xenophobia, however, was equally present back in China. In 1899, a nationalist group called the Society of Right and Harmonious Fists began rebelling by attacking foreigners in China and forcing them into the fringes of Chinese society. In a short time, this movement, known as the Boxer Rebellion, grew larger, eventually influencing the Imperial Qing Chinese government to declare war on all foreign nations with a presence in China. This created an opposing alliance of eight nations, including the United States. The allies were the victor of the Boxer Rebellion and resumed conducting business in China, albeit with more respect for the Imperial Government’s authority.

The arrival of World War II briefly improved but ultimately had little positive effect on the relationship between the United States and China. Japan had invaded China, butchering Chinese civilians in a quest to expand its imperial hegemony. Shortly thereafter, Japan had then attacked the United States at Pearl Harbor, prompting both China and the US to formally declar war. Japan was defeated, however, it was during this time that the Nationalist Republic of China became engaged in a civil war with Mao Zedong’s Communist Party, which complicated the relations with the United States. China had always been, to some degree, wary that the United States had an imperialist interest in China, and the success of the Communist Party taking over China and pushing the Nationalists into Taiwan exasperated that feeling among the Chinese.

The newly-Communist People’s Republic of China remained hostile to the United States and, furthermore, the United States refused to acknowledge the PRC as a legitimate entity, preferring to deal with the refugee ROC government in Taiwan. Conflicts in Korea and Vietnam furthered the divide between the two nations. At the same time, China did not pledge allegiance to the USSR but remained aloof and neutral. It was only until the border disputes between the USSR and China that President Nixon could begin dialogue with the PRC. This was the beginning of the modern relationship of the US and China, a reopening of the east to the west.

Since the reopening of China to the West, relations with the United States have consistently proved uneasy, although never hostile. However, one of the more modern disputes between China and the US could very well lead to such a hostility: the issue of Taiwanese autonomy. Taiwan, a Capitalist and democratic government separate–though not independent–from mainland China, has refused to submit to the PRC government and allow itself to be unified. Their refusal to be incorporated into the PRC is a major threat to a new and united Chinese superpower. Making matters with China worse, the United States is a well-known supporter of Taiwan and has even  recently supplied the island with its own weaponry. This assistance was met with extreme contempt from mainland China as China has stated its willingness to declare full-scale war with the United States in the case of Taiwanese declaration of independence.

For the time being, the Taiwan question is under control due to its own domestic policies. The current President of the ROC in Taiwan, Ma Ying-jeou, hasn’t pushed for greater independence but, rather, stated his long term goal to be the unification of Taiwan and the Mainland. While his unconventional beliefs may disappoint some in Taiwan who favor a greater autonomy from China, it has, at least, subdued the need for war.

As it were throughout most of its 200-year-old relationship with the United States, China remains, at best, a distrustful business partner cloaked in mystery.  An ideological gap between the two nations has existed consistently throughout their history–that China views America as having ulterior imperialist motives, and America views China as xenophobic and and unwilling to embrace its highly valued institutions of democracy and Capitalism. This gap, though not nearly as divisive as the historic one between the US and USSR, still is an important factor and Sino-American relations remain lukewarm. The question remains; why surrender economic freedom to a shaky ally?

Predicting Threats

Shortly after the collapse of the Japanese Empire and the end of World War II, the very deep ideological gaps between the Allied Powers became glaringly obvious. As it were, these differences between the US and Russia were already cast during World War I and the Bolshevik Revolution: it was a coalition that included the United States who invaded Russia on the unsuccessful side of the Czarist White forces. Those differences, however, had been mostly swept aside to form a combined effort against Nazism and Fascism–two movements that hated Capitalism and Communism equally and called for their simultaneous destruction.

With Fascism, Nazism, and Imperial Japan out of the way, Europe and Asia became areas that needed not only structural rebuilding, but also economic. Therein began the problems that provided the foundation for Cold War. Just a year after the fall of Japan, Deputy Chief of Mission to the USSR George F. Kennan composed an unrelenting assessment of the problems that the Soviet Union would cause the United States. Some of Kennan’s words were as follows:

. . . The rest [of Soviet doctrine] may be outlined in Lenin’s own words: “Unevenness of economic and political development is the inflexible law of capitalism. It follows from this that the victory of Socialism may come originally in a few capitalist countries or even in a single capitalist country. The victorious proletariat of that country, having expropriated the capitalists and having organized Socialist production at home, would rise against the remaining capitalist world, drawing to itself in the process the oppressed classes of other countries.” It must be noted that there was no assumption that capitalism would perish without proletarian revolution. A final push was needed from a revolutionary proletariat movement in order to tip over the tottering structure. But it was regarded as inevitable that sooner of later that push be given.

. . . Lenin, had he lived, might have proved a great enough man to reconcile these conflicting forces to the ultimate benefit of Russian society, thought this is questionable. But be that as it may, Stalin, and those whom he led in the struggle for succession to Lenin’s position of leadership, were not the men to tolerate rival political forces in the sphere of power which they coveted. Their sense of insecurity was too great. Their particular brand of fanaticism, unmodified by any of the Anglo-Saxon traditions of compromise, was too fierce and too jealous to envisage any permanent sharing of power. . . . No other force in Russian society was to be permitted to achieve vitality or integrity. Only the Party was to have structure. All else was to be an amorphous mass.

. . . It is clear that the United States cannot expect in the foreseeable future to enjoy political intimacy with the Soviet regime. It must continue to regard the Soviet Union as a rival, not a partner, in the political arena. It must continue to expect that Soviet policies will reflect no abstract love of peace and stability, no real faith in the possibility of a permanent happy coexistence of the Socialist and capitalist worlds, but rather a cautious, persistent pressure toward the disruption and, weakening of all rival influence and rival power.

Although the Soviets’ extraordinary antipathy for Capitalist economies was known inside the USSR, it was Kennan’s assessment that revealed the massive obstacles the two nations would face in the future of a global world. Because of his insight, the United States was able to quickly acknowledge a serious threat and prepare for Cold War with Russia, knowing that attempts at coexistence were futile.

China: A Threat or a Partner?

By shedding its more economically-Communist characteristics, China has emerged a global economic powerhouse. For years in the United States, there have been rumors that China would surpass the West as an economic superpower.  Those rumors, however, became a harsh reality in the past year with the most recent economic analysis of China, which led to the conclusion that the Middle Kingdom will be the number one global economy by 2016. They certainly have benefitted from the inclusion into global Capitalism: China’s poverty level has gone from 80% of its population to only 10% in roughly 20 years.

The reasons for such a rapid expanse are mainly attributed to China’s deliberate manipulation of its own currency in order to benefit the export of its goods while crippling the exports of US products to its own shores. This self-serving economic policy was not predicted by the US when President Nixon laid the foundation for China to enter the global economy, nor when President Clinton reopened communications after a period of sanction. In fact, Henry Kissinger recently sat down with CNN’s Fareed Zakaria and admitted that China’s propulsion into world dominance was not predicted when they opened talks.

With such an unsettling rise and threatening economic strategy, the United States may have been superficially treating China as a friend, but in reality keeping themselves prepared for China as a threat. In fact, Gwynne Dwyer of Walrus Magazine has provided an incredibly startling analysis of 21st-century US foreign policy that shows the Western giant forming a “noose” of alliances around China. This policy includes the 2005 military alliance between India, the second-most populous country in world, and the United States. The US has also recently resurrected older and seemingly outdated alliances in Southeast Asia–right at China’s doorstep. Dwyer states:

It’s been coming for some time now, as witness America’s determined attempts to re-militarize its long-standing ally, Japan. Tokyo ended half a century of refusing to send troops overseas into war zones by committing a small contingent to the US-led occupation of Iraq, and last February it redefined the Taiwan Strait as a “common strategic objective” of Japan and the US (implying that its forces would join the US in resisting any Chinese attack on Taiwan). The six aircraft carriers, forty submarines, and 190 other surface ships of the US Pacific Command (PACOM), based in Hawaii, already dominate the western Pacific, and there have long been large numbers of US troops (currently about 80,000) based in South Korea and Japan. Recently, the forward deployments have been growing: the command headquarters of the US army’s 1st Corps, with responsibility for ground operations in the Pacific and Indian Ocean regions, is slated to transfer from Washington state to Camp Zama, south of Tokyo, while the USAF is proposing to move the 13th Air Force’s long-range bombers and tankers from Guam to Yokota airbase in Tokyo.

Washington is busily reviving old alliances and forging new ones throughout Southeast Asia. Thai, Malaysian, Singaporean, Indonesian, and Filipino forces regularly perform manoeuvres with American troops, and a US-led exercise in Thailand last year even saw Mongolian soldiers show up. Also last year, the first high-level discussions between the US and Vietnamese armed forces were held since the fall of Saigon in 1975. Admiral Thomas Fargo, the commander of PACOM, visited Hanoi and Saigon in February 2004 “to build on the US-Vietnam defence relationship,” and by November Vietnamese defence minister Pham Van Tra was in Washington to see Donald Rumsfeld.

These alliances, combined with the funneling of weapons to China’s domestic rival Taiwan, as well as the United States’ support for the Dalai Lama and Tibetan independence arouse suspicion that the two nations’ friendly demeanor is but a political ruse. In fact, China has had no qualms threatening the United States and asserting its own hegemony. When concerned with the issue of Taiwanese independence, a top Chinese General Zhu Chenghu stated that China would not hesitate to intiate a Nuclear “first-strike” strategy and seek to destroy “hundred of United States cities”. This General, while not speaking on behalf of the Chinese Government, was not reprimanded or forced to retract his statement. Making matters worse, it has been recently revealed via Wikileaks that the United States has threatened China with military action over the recent development of its anti-satellite and anti-ballistic missile programs.

With recent events between the opposing superpowers looking so grim, Sino-American relations could very well deteriorate into full-scale war. Unfortunately, if China and the United States were to engage total war, the effectiveness of modern-day weapons could very well threaten the existence of civilization and mankind. Like the nuclear stalemate between the US and the USSR throughout the 20th century, instruments of total disaster which ironically prevented such a war, the economic entanglement between the two powers may be the 21st century’s policy of mutually assured destruction. Although China’s near-majority possession of United States debt puts the upcoming superpower in a position to compromise the US economy, at the same time the global economic system rests almost entirely on the prosperity of the United States. Furthermore, consumers in the United States form a majority of the buyers of China’s exports; shattering the United States’ economy would not only severely affect nations around the western world, but China’s livelihood as well. This stalemate may, in fact, not have been an economic blunder by the United States but, rather, one of the most genius instances of foresight and methods to prevent catastrophic war.

Addendum: June 16th, 2011

Further displaying the United States’ desire to strengthen relations with Southeast Asia, the United States Department of State’s Foreign Service Institute has recently announced vacancies for language instructors of several Southeast Asian Languages. The vacancy post reads:

Calling all U.S. citizens interested in language training programs! Apply for FSI’s Supervisory Language Training Specialist vacancy by the May 23rd closing date! Professional Proficiency or higher in Burmese, Indonesian, Khmer, Lao, Malay, Tagalog, Thai, or Vietnamese is preferred.

Addendum: June 20th, 2011

Senator (AZ) John McCain just finished a speech at the Center for Strategic and International Studies on the recent governmental change in Burma. His speech emphasized the need for a close and friendly relationship with Burma’s newly democratic government. Among the topics covered, relations with China were by far the most prevalent, with the word “China” being used 28 times. Also notable was his emphasis on the importance on maintaing a link to the Association of Southeast Asian Nations (ASEAN), which consists of several nations that are in close proximity to, if not bordering, China.