The Winds Are Still Blowing East

While Washington is glued to the drama over health care, over the past few days, Russian Prime Minister Vladimir Putin has been in Beijing meeting with Chinese leaders including Premier Wen Jiabao and President Hu Jintao. In a series of communiqués, they celebrated the "strategic partnership" between the two countries and charted a course of future close relations.

Among others things, Putin - Russia's man behind the curtain who has also been spending considerable time in front of the curtain - signed off on six billion dollars worth of trade deals with Chinese counterparts, including moving ahead with a natural gas pipeline to open up the vast Chinese market to Russia's equally vast supply of natural gas. The two sides also discussed policies to contain and manage North Korea. Trade between the two countries is approaching $60 billion a year, and while that is a fraction of the more than $300 billion a year between China and the United States, it is hardly negligible.

For China, Russia is a vital supplier of raw materials and some ancillary higher-end equipment. For Russia, China is a vast market that is growing, compared to the European Union which is not. For both countries - who were once Cold War allies and then Cold War adversaries, these meetings signal a new move towards creating an economic and strategic access that bypasses the United States, and that alone is part of the appeal.

The United States wasn't at these meetings, but its presence was felt nonetheless. For both countries, America remains the great question mark - whether it will help or hinder their desires for greater power and prosperity. Russia is a shadow of what it was during the Cold War, and Putin has clearly chosen a path of autocracy that will work only if demand for raw materials - oil above all - remains elevated. China is the crucial element of that equation. China is emerging as the new power in the global economic pantheon, and it is intent on diversifying away from its dependence on the United States for capital and for markets. While it remains tightly bound to America, its leadership would like to find ways to become less so. Whether they will or not remains to be seen, but the embrace of Russia is a clear sign that they wish to become less engaged with the U.S. rather than more.

For now, the emerging Chinese-Russian friendship is hardly a threat to the United States, but the shifting sands signify that the world no longer needs to go through Washington or through Wall Street. As long as the United States remains as large as it is, it will be an unavoidable market for China and even if Putin bought a house off of Tiananmen Square, all the deals between China and Russia wouldn't change that. But the only way the U.S. will preserve its centrality to the global economy over the coming decades is to recognize that the winds are shifting east and that our attention and energy should be as well. The Taliban, Iraq and even Iran's nuclear ambitions are all vital issues, but none of those may shape the future of the United States and the world at large more than the rise of China.

 

 

Follow Zachary Karabell on Twitter: www.twitter.com/zacharykarabell

Comments

[alexa07]

"But the only way the U.S. will preserve its centrality to the global economy over the coming decades is to recognize that the winds are shifting east and that our attention and energy should be as well."

Will the American public be forced by our big foreign lobbies to support yet another war against a Muslim nation as we become increasingly irrelevant to the rest of the world?

[MajorKong]

Gee, sure glad we moved all our manufacturing there.

[Jaywalkker]

If we're lucky, we can be the "toyota" plant operating in "kentucky" kicking the domestic manufacturer's economic butt. Call that a paradigm shift.

[piggybackmom]

China is thinking of purchasing an auto manufacturing planet in California.
Maybe they will build hybrid cars or electric cars to sell in China...wh­ile America keeps its addiction to gas guzzlers.

[MosheDayanHero]

Shanghai Conference is an important strategic and economical organization that gradually altering the global balance of power. It was created largely as counterbalance to perceived American hegemony.
Particularly important is ( not so) secret military alliance between China and Russia.
There two things China wants from Russia-- energy and military hardware and military cooperation against American expansion in Central Asia. Little else.
Russia has found in China a more reliable and sober market for its energy products than the whiny West Europeans.
China is not turning away from U.S. It simply wants to protects its Western frontiers from American expansionism.

[adamnb]

The report has its figures mixed up; it's not a 3.5 billion dollar deal, that's only the initial investment or loan to Russia to build the pipeline. If the deal goes through, then gas deliveries of 70 billion cubic meters per ear over twenty years is worth hundreds of billions.