THE BLOG
01/21/2011 11:12 am ET Updated May 25, 2011

Hu's on First -- China and the United States

So Hu came to Washington, met with some CEOs, had a nice dinner and a 21-gun salute, and opened the Chinese purse to the tune of $45 billion in new business between China and the United States. The buzz was mostly positive, and the billions didn't hurt. But it's safe to say that most Americans are hardening into a view of China as a hostile competitive threat, and many Chinese have concluded that while the 20th century may have belonged to the United States, the 21st belongs to them.

Nationalism in the form of "we are better than you are" is rife on both sides of this complicated relationship. But the fact remains that for all the talk of a divorce and rough times ahead, it remains just that: talk. China and the United States have been intertwined for years, but the events of the past two years have accelerated that process. Chinese investment in the United States is immense, far in excess of the official $800 billion in U.S. Treasuries and encompassing a monetary system tethered to the dollar and dependent on decisions made in Washington.

China's fate still relies to on American prosperity -- not forever, but certainly for now. More American companies are finding their salvation in doing business in China than ever before, not necessarily at the expense of work and business in America. Alcoa's deal with Chinese aluminum companies will allow it to maintain operations in the United States that it might otherwise not have.

China's outward investment has grown to the tens of billions, in Africa, Latin America, and Central Asia, but increasingly in the United States as well. While Washington may rail against Chinese companies putting down roots in American soil, cash-strapped U.S. states have been wooing them and rolling out the welcome mat. And China's need to buy U.S. agricultural commodities, such as today's deal announced by Hu in Chicago for China to purchase nearly $2 billion of American soybeans, doesn't hurt.

China remains the greatest challenge the United States has faced in decades, offering a more complicated conundrum than the Soviet Union ever was. Yes, President Kennedy used the bogeyman of the Soviets to call on Americans to redouble their efforts to build new infrastructure and better schools -- and Obama might take a page from that book by turning the challenge of China into a clarion call for reinvestment in the American economy by Americans. But China is also doing some things quite a bit better than America is (though still far poorer than America), and using American methods and capital to boot.

The United States can continue to assert its values and views, but make no mistake: China will do what it wants as long it can. The way forward for the United States has nothing to do with choices made in Beijing and everything to do with myriad choices Americans make at home. The relationship will be healthy -- albeit with a normal does of dysfunction -- as long as each society and economy remains or at least approaches vibrancy. That is the question for the United States: can it remain vital even as it remains rich and powerful. China is a distraction from that question, and a rabbit hole. Let's hope we don't descend into it and make permanent what already appears to be a looking glass economy.