Obama to Borrow China’s Wealth, Clout in Effort to Steady World

Indira A.R. Lakshmanan
Bloomberg
Tuesday, Dec 09, 2008

Thirty years ago this month, President Jimmy Carter held secret negotiations to establish formal diplomatic ties with a poor, insular communist China. President-elect Barack Obama will inherit a relationship with a China whose wealth and influence are essential to rescuing the world economy.

Resolving almost any international problem now -- from reducing North Korea’s potential nuclear threat to slowing global warming -- requires Beijing’s cooperation. The financial crisis also underscores China’s importance: Its $1.9 trillion in foreign reserves will be indispensable in helping to avert a global economic meltdown.

While this means China will likely get immediate attention from Obama, the new president probably won’t reorient U.S. policy toward the world’s fourth-largest economy.

Factory closures and job losses in Michigan and China’s Guangdong province “vividly remind us how interdependent our countries are now,” says Susan Shirk, a former deputy assistant secretary of state for China who has advised both Obama and Hillary Clinton his choice for secretary of state. “Although this could lead to conflict and friction, it also gives the U.S. a strong incentive to cooperate with China.”

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Every president since Carter has come to office lambasting Beijing about espionage, unfair trade practices, violations of human rights and threats to Taiwan -- before being compelled to work with the Chinese government on common interests.

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