Each week adds a new item to the growing list of grievances between the United States and China. The value of China’s currency, arms to Taiwan, human rights in Tibet, carbon emissions, military spending, sanctions on Iran, cyber attacks, and, of course, North Korea have all made headlines in the past few months. But there are far more profound problems that tend to get covered up by this landslide of daily disagreement, problems that raise the specter of a new kind of cold war. The most fundamental is Beijing’s newfound belief that there has been a substantial shift in the balance of power within its relationship with America, and that the United States is no longer indispensable to China’s development. Added to that is China’s deepening commitment to a state-driven form of capitalism that increasingly pits the two counties in a zero-sum competition for resources and wealth.
There is still considerable mutual dependence in U.S.-Chinese relations, grounded mainly in the complex commercial ties of the two nations. But there are also risks that are more dangerous for Washington than anything produced by the long U.S.-Soviet stalemate. The Berlin Wall separated East and West, but it also acted as a kind of shock absorber, ensuring that economic bankruptcy on the Communist side had little impact on the freer world. There is no such buffer between China and the United States. The financial crisis of the past twenty months has produced significant aftershocks in China. And in the coming decade, economic developments inside China will have profound implications for America’s financial well-being—and, therefore, its security.