Uncle Sam vs the Dragon

Wednesday, 17th February 2010

The growing rift between the United States and China has chilling similarities to America’s old rivalry with the Soviet Union, says Daniel W. Drezner

The leaders of both countries already recognise the greatest similarity between the Sino-American relationship and the Cold War: the possibility of mutually assured destruction. During the Soviet-US stand-off, it was the prospect of nuclear Armageddon that haunted statesmen and citizens alike. Today, the tension between America and China concerns what Obama’s adviser Larry Summers called the ‘balance of financial terror’. China is now the world’s largest exporter, and the United States is their second-largest export market. Beijing’s economic policies since the start of the credit crunch suggest that they are pinning their recovery hopes on more export-driven growth. Meanwhile, the Obama administration’s budget projections show that the United States will need to rely on foreign-debt servicing (i.e. huge investments from China) for some time. In a global economy still struggling to recover from the Great Recession, the world’s largest exporter and largest consumer market can’t afford a serious rupture in their relationship.

In the Cold War, moments of brinksmanship caused both countries to back away from the precipice. It is possible that, as tensions between China and America mount, nervous chauvinism — in the form of economic nationalism, bureaucratic rivalries or Congressional stupidity — might trigger a cascade of misguided actions and cause a damaging conflict. We can hope that politicians in Beijing and Washington will learn the right lessons from history. But we can expect plenty more tension as Uncle Sam and the Dragon settle down together.

Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.

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anyfool

February 19th, 2010 8:14pm Report this comment

China might be the holder of massive amounts of dollars but if they try to dump them who will buy and at what price. it might devastate the US economy but the US would recover long before the chinese if the chinese ever recovered as their time as the workshop of the world is starting to come to an end as other nations are starting to make the same low tech stuff cheaper. the higher tech goods that they make will soon start to be challenged in the courts as patent and copyright cases mount, they make stuff but do not create stuff and that is their really big problem even bigger than the fact that they imprison or execute anyone who shows original or inventive thinking as there fear that more than loss of trade or wealth

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