Visiting Washington's banker

November 15, 2005

In the summer of 1990, this newspaper ran a front-page story alerting readers that the U.S. trade deficit with China was rising fast. It had increased by 300 percent in the previous two years, and by the end of that year, China was poised to overtake Taiwan as America's second-largest deficit trading partner - next to Japan.

What a difference 15 years make - a difference worth pondering as President Bush visits Beijing this week.

In 1990, the growing Chinese trade surplus with the United States made news because for the first time it was about to top $10 billion a year. Nowadays, Wal-Mart alone imports about twice that much from China each year, and the U.S. trade deficit with China hit $20 billion for just September and will likely be more than $200 billion for this year.

In 1990, U.S. Sinologists speculated that China's growing exports to America might give Washington greater political leverage with Beijing. Nowadays, while China has become dependent on U.S. markets to fuel its development, America has become just as reliant on China's surplus savings to fund deficit U.S. government and consumer spending.

That fact, and many related Sino-American economic matters, must be kept very much in mind as Mr. Bush arrives in Beijing, burdened by his decidedly weakened presidency and by a full plate of noneconomic issues - from Chinese human rights abuses to the need for Beijing's help in disarming North Korea. We may wish otherwise, but long gone are the days in which Washington could even pretend to dictate to Beijing.

It is not simply that China seems to be greatly stronger by the day, and often at U.S. expense. It is that, with Beijing as Washington's banker, China and America are locked in an ever tighter symbiosis - in which American expectations of Mr. Bush's visit on currency, trade, human rights and other conflicts should be kept restrained and success should be measured in incremental steps.

Last week's textile agreement - which may have temporarily forestalled a Sino-American trade war - over surging Chinese exports is what now passes for a significant breakthrough in this dance of the heavyweights. Fifteen years ago, the U.S. advantage over China was vast, and Washington could presume to pound on Beijing over human rights. Today, American has succeeded in helping to bring China more thoroughly into the world order, and the relationship has descended into prolonged negotiation.

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