Dan Rather THE YEAR was 2001, and it seems as if it were decades ago: A new American president, only a few months into his term, is suddenly tested by his first foreign-policy crisis. No, not 9/11 -- that was still well beyond the horizon. Think instead back to the pre-9/11 world, and remember a distant episode in which an American spy plane was disabled in a collision with a Chinese fighter jet, and was forced to land on the Chinese island of Hainan.
With the fates of crew, sensitive technology and even more sensitive diplomacy uncertain, it was an event that carried with it memories of Gary Powers and the deepest freeze of the Cold War. At the time, remember, the professional prognosticators were confident that they had discovered the international challenge that would define the Bush presidency. Now, of course, it is practically forgotten.
So why all the first-term ancient history in this season of second-term forward-looking? It came back to mind when watching the Senate Foreign Relations Committee's confirmation hearings for Secretary of State-designate Condoleezza Rice. The sharp questioning of Dr. Rice on Iraq by Democratic Sen. Barbara Boxer of California and others grabbed the headlines, but more interesting was the line of questioning initiated by Democratic Sen. Paul Sarbanes of Maryland.
HUGE DOLLAR RESERVES
Sen. Sarbanes wanted to call attention to the huge dollar reserves being accumulated by China, U.S. treasury debt in Chinese hands, and their relationship to record U.S. trade deficits. The senator, who in addition to his seat on the Foreign Relations Committee is the ranking Democratic member of the Senate Banking Committee, made the point that, as he and many other observers see it, the U.S. dollars held by China give it an edge in its dealings with our government on trade and, potentially, other matters as well.
Here's one way to understand how this could work: Ever complain to your landlord about something that needs fixing while you owe back rent? And how did that go? There's more to it than that, though. By ramping up its purchase of U.S. debt, China has put itself in a position where it can influence the value of the dollar on the world market. In other words, economists wonder what might happen if China, for whatever reason, decided to suddenly unload these dollar holdings on the world market. Others wonder how much the threat alone of such an action is worth to China in its dealings with the United States.
SQUEEZING WORLD ENERGY
China is fast emerging as a linchpin to a host of key issues facing the United States. Its rapidly expanding economy is putting a squeeze on world energy supplies, driving up demand and therefore prices. China's persistent, suspected role in supplying nuclear and missile technology to other nations means that it must be brought on board for any serious U.S.-led attempts to curb proliferation. Its participation in multilateral talks with a nuclear-armed North Korea is a vital part of President Bush's strategy for dealing with that member of the 'Axis of Evil'.
For American imports, meantime, China remains the land of largely unrealised dreams, as U.S. companies' hopes of penetrating the world's biggest potential market never quite seem fully to bear fruit.
And as former rivals China and Russia move closer to one another in an apparent effort to counterbalance the American superpower, it may be worth asking: Could the predictions that China might pose a defining challenge to U.S. foreign-policy goals come to fruition in the president's second term or in future years, for future presidents after those predictions were pushed to the side by headlines focusing on terrorism and Iraq?
Dan Rather is a television broadcaster(c) 2005 DJR Inc. Distributed by King Features Syndicate.
