Back when President Obama lived in Indonesia, in the late 1960s, China loomed as a malign force to the north, where communist cadres plotted to export their revolution to the rest of Asia. The Jakarta he'll visit later this month has an entirely different attitude toward the People's Republic. Local companies are doing deals in yuan, the Chinese currency, rather than dollars. If Jakarta gets in financial trouble, as it did back in 1997, it will be able to call on a $120 billion regional reserve fund, an Asia-only version of the International Monetary Fund due to be launched this month, bankrolled in part by China's massive foreign-exchange reserves. Asia's key economic and political issues are no longer being hashed out on trips like Obama's"”between individual nations and the United States"”but at summits that include only China, Japan, South Korea, and the Southeast Asian countries. "China has been instrumental in this shift in focus from 'Asia-Pacific,' which was largely about the U.S. and Japan, to 'East Asia,' which has China at the center," says Martin Jacques, author of When China Rules the World.
Fair enough: everyone understands that China deserves a big say in what goes on in its neighborhood. But what most people haven't noticed yet is that Beijing also wants to write"”or, at least, help write"”new rules of the road for the world. "China now wants a seat at the head of the table," says Cheng Li, director of research at the John L. Thornton China Center at the Brookings Institution. "Its leaders expect to be among the key architects of global institutions."
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It's easy to forget that big international bodies like the IMF and the World Bank were created by just a few nations, led by the United States. These economic organizations have global reach, but that globe used to be dominated by the American superpower, and their policies were suffused with U.S. values. When Beijing was a small-stakes player its leaders didn't always like the setup, but they lived with it, even facing down fierce grassroots opposition to join the World Trade Organization.
But now China has more worldwide clout, and public opinion at home has taken on a combative (and sometimes downright jingoistic) tone. So with one eye on China's national interests and the other on domestic critics accusing the regime of "coddling" the West, Beijing has begun to push harder to reshape international systems to make them more China-friendly (and, in the process, to raise the regime's chances of survival).
Ironically, U.S. officials often complain that Beijing isn't more involved in running the world"”declining to help security efforts in Afghanistan, for instance. But in most such cases, China is being asked to take part in a system it didn't set up"”one it views as inherently biased in favor of the West. The Chinese are far more eager to participate in groups they've had a hand in building, like the Shanghai Cooperation Organization, a sort of Central Asian NATO in which China (as might be guessed from the name) plays the leading role. While that alliance started out as something of a joke in 1996, it's grown into a pillar of regional security.
Similarly, Beijing's efforts to push the yuan as a rival to the dollar are now making tentative progress. In the last few months, China has inked $100 billion in currency-swap agreements with six countries, including Argentina, Indonesia, and South Korea. The yuan has become an official trading currency between Southeast Asia and two Chinese provinces along its periphery. "The yuan will next be used as a trading currency with India, Pakistan, Russia, Japan, and Korea," says Gu Xiaosong, director of the Institute of Southeast Asian Studies in Nanning.
Those countries will eventually be able to use the Chinese currency for deals between each other. And in an-other low-profile but important step toward making the yuan a freely convertible, international currency, Beijing issued its first international bond offering in Hong Kong late last year.
1 2 3 Next Page » var OutbrainPermaLink = "http://www.newsweek.com/id/" + masterPageId; var OB_Template = "newsweek"; var OB_demoMode = false; var OBITm = "1254773538724"; var OB_langJS ='http://widgets.outbrain.com/lang_en.js'; if ( typeof(OB_Script)!='undefined' ) OutbrainStart(); else { var OB_Script = true; } Share: Facebook Digg Tweet LinkedIn newsweek:http://www.newsweek.com/id/234928 Tools: 4 Post Your Comment Print Email NWK.widget.EmailArticle.init(); SPONSORED BY placeAd2('printthis','88x31|3',false,''); placeAd2(commercialNode,'below_story',false,'') var url = 'http://content.pulse360.com/ECC45BD6-867E-11DE-8C30-D41FEDADD848'; url += '?CommercialNode=' + commercialNode; // NOTE :: The "scr" + "ipt" break is essential, presumably to bypass loose // js/DOM safeguards against doing what we want to do here. document.write('"); var isAuthenticated = false; Discuss Enter Your Comment NWK.widget.CommentsSubmit.form = $('#comment-form'); NWK.widget.CommentsSubmit.init(); placeAd2('comments/'+commercialNode,'88x31|2',false,''); Sponsored by Member Comments Reply Report Abuse Posted By: sunny dan @ 03/13/2010 5:19:41 AM
I was very impressed with the breadth of this article. The future of the world depends on the policies of China, and there is good reason to believe that China will dominate this century the way America dominated the last century. This article intelligently probes the changing global dynamic, free of the usual jingoistic and racist rhetoric so common in other American news sources. This is very rare and most welcome.
Reply Report Abuse Posted By: halahala @ 03/13/2010 5:16:22 AM
As long as U.S keep borrowing money to pay its unsustainable , phenomenal state revenue on the rate like now , or China moves ahead steadily as its past 20 years performance , fewer would doubt the headline this article implies in less a decade . Many current Chinese factories advance 4 more generations the manufacturing technology to the old gasping mills in U.S, more crucial to put , the highest speed of products transportation is going to happen in front all of us might be shorter than the period when the cross-Asia-Europe HST systems built up by China in 2025 . Till then , the flatter world isn't another fancy slogan in book . Facts speak louder than words. We'll see .
Reply Report Abuse Posted By: Mr Pepper @ 03/13/2010 4:11:30 AM
Predicting the future is a dicey business, particularly when it seems 'obvious' to people peddling books. I see no problem with China's rise - people everywhere have a fundamental right to a better life. But I am with the Greek sense of cautious to guard against too much foresight and hubris because the Pantheon on Olympia don't like it when mere mortals peer into the future. As one japanese man once said, 'There is always something to upset the careful of human calculations.' Good luck to china. But I am sticking with the Greek.
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