"It may be good economic policy, it may even be moral," Clinton blushed, thinking of his own high-income bracket, but he sure couldn't understand what Bush was doing.
Clinton is not alone in worrying about mounting obligations to China. In his latest book, The Earth is Flat, a kind of exuberant paean to globalism's endless possibilities, New York Times columnist Tom Friedman worries that America's sovereignty is under threat because it owes so much money to China – the second biggest lender (after Japan) to the world's biggest economy.
Whether the subject is public debt, the trade deficit, unemployment and outsourcing, soaring energy prices (all more or less China's fault), China's rising profile is being discussed everywhere: on the rubber chicken circuit in Washington and New York, every day in C-SPAN broadcasts of Congressional proceedings and hearings, on the cover of Newsweek (the US edition, not the International edition Americans don't see), on radio and TV talk shows.
The story of China's economic rise from nowhere – which was known for years by Americans who read scholarly journals or trade magazines covering electronics, textiles and other industries – has been filtering down to the general public.
Considering the little time and space US networks and most newspapers give to foreign news, it is not surprising that the American general public is just becoming aware of China – even if the news is not so much "foreign" as a continuing volley of economic news alerts with a Chinese twist: how China is forcing up gas prices, taking jobs away (by undercutting domestic exporters with a currency variously described as anywhere from 10% to 40% undervalued) and so on.
For its part, China has gone from closed-up-tight to wide open only in the last 20 years or so. And it was only in the last 10 years that it really made a concerted effort to reach out, as two academics writing in Foreign Affairs in late 2003 pointed out.
"Since the mid-1990s, China has expanded the number and depth of its bilateral relationships, joined various trade and security accords, deepened its participation in key multilateral organizations, and helped address global security issues," Evan Medeiros of Rand Corp and Taylor Fravel, a fellow at Harvard University's Olin Institute for Strategic Studies, wrote.
"Foreign policy decision-making has become less personalized and more institutionalized, and Chinese diplomats have become more sophisticated in their articulation of the country's goals." Medeiros and Fravel concede that changes reshaping China's foreign policy posture might be slow in coming, and subtle, to be sure, "but their significance is huge.?
"And their implications will be critical for China's relations with both the United States and the international community at large. After all, not only does China now accept many prevailing international rules and institutions; it is also becoming a much more capable and adept player of the diplomatic game," they say.
"When opportunities for cooperation exist, Beijing will bring much more to the table than in the past. But these developments also may have another result that American policymakers must not lose sight of: as China expands its influence and refines its diplomacy, it will also get better at protecting its own interests – even when they conflict with those of the United States."
Potential conflicts with the US run the gamut from the race for energy and resources to disputes over the value of China's currency – or indeed, the 16- year-old arms embargo that Beijing has been campaigning to see lifted. To level what China perceives as an uneven WTO playing field, it has sought "market economy status" because without MES, member countries can cite it for dumping without documenting claims. The US, like the EU and Japan, has so far rejected China's entreaties for MES – largely on the grounds that China has not really budged on currency reform. Since China has not implemented market mechanisms that would allow the yuan to rise to a more realistic level – at least in the eyes of its trade partners – the US and others argue its refusal is tantamount to dumping under-priced goods in their markets.
Suspecting they would only get more lectures about revaluing the yuan, Chinese Finance Minister Jin Renqing and People's Bank of China Governor Zhou Xiaochuan passed over an invitation to attend the last G7 summit in Washington. The rejection looked like China saying, "Don't try to push us around."
Given how the G7 has dictated much of the world's agenda, and given who calls the shots in the WTO, the World Bank, the International Monetary Fund and other global organizations, one can understand China's irritation at going before these bodies to be lectured. But if multilateral institutions are going to get any better, they will need China's participation.
When China reached out and joined the world, it was a minor economic player. It graduated quickly, using its new status to reach out to countries across the region, cementing new trade and investment deals from Pakistan and India down to Australia. Beyond the region, China's leaders became regular globetrotters, signing a long list of bilateral accords and becoming familiar faces in the Americas, Africa, the Middle East and Europe.
That has undoubtedly unsettled the old established order, and the G7 club will have to come to grips with that. But China, too, has some way to go up the learning curve, too. That will require both sides to put the megaphones down, and start talking.