This is because, as Harvard Professor (and former assistant secretary of defense in the Clinton administration) Joseph Nye maintains, relations between great powers are like a game of chess in three dimensions. There is the military equation, the economic equation and the separate but related dimension of cultural influence. Nye calls it "soft power," the ability of a great power not to force other countries to do its will but to get them "to want what you want."

So when Clinton infuriated Chinese Foreign Minister Yang Jiechi at the ASEAN regional forum last week by asserting that the resolution of disputes over the South China Sea to be in the United States' "national interest" all three equations came into play.

China has already played the military card, by establishing military outposts in the Paracel and Spratly islands, despite competing claims from Vietnam, the Philippines, Malaysia, Indonesia and Brunei. China has in recent months raised the stakes over the South China Sea, declaring a unilateral fishing ban and staging repeated naval and amphibious exercises and missile tests. Vietnam in turn has announced purchases of Russian-build Kilo-class submarines.

The economic issue is central, because of the indications that this vast tract of sea contains large oil and gas reserves. And China has explicitly warned Western oil companies operating in Vietnamese waters that their future financial prospects in China were at risk if they continued.

The cultural theme arises because the United States is standing on the principles of international law, peaceful resolution of disputes and on its belief that it can be seen as a disinterested and therefore honest broker in the affair.

Behind that lies an even larger cultural question: the degree to which we may be seeing a new kind of cold war in the making. On the one side stands the American hegemony, based (at least in principle) on free trade, free markets and free institutions. On the other now emerges a more authoritarian Chinese model, based on state power, state dominance of the economy and the main industries and state control of the media and the political system.

Just as the potential for a clash between these competing great powers seemed to be receding over Taiwan, it now seems to be rising over the South China Sea, which China has declared to be one of its "core interests" along with Tibet and Taiwan. Clinton said that the territorial disputes (which have seen naval clashes between Vietnam and China in the past) were a "leading diplomatic priority" and have now become "pivotal to regional security."

"The United States has a national interest in freedom of navigation, open access to Asia's maritime commons and respect for international law in the South China Sea," Clinton said.

A deeper economic context came into play last week when Guan Jianzhong, chairman of Dagong Global Credit Rating, China's biggest ratings agency, gave an interview with the Financial Times to declare that the United States was, to intents and purposes, bankrupt and was financing its military dominance with borrowed money in a way that couldn't last. His critique recalled Mao Zedong's 1960s jibe that the United States was a "paper tiger" and headed for decline.

"The U.S. is insolvent and faces bankruptcy as a pure debtor nation but the rating agencies still give it high rankings," Guan said. "Actually, the huge military expenditure of the U.S. is not created by themselves but comes from borrowed money, which is not sustainable."

"The financial crisis was caused because rating agencies didn't properly disclose risk and this brought the entire U.S. financial system to the verge of collapse, causing huge damage to the U.S. and its strategic interests," Guan added.

He may have a point, except that the official Chinese news agency Xinhua published an extraordinary editorial Friday that revealed the degree of high-level alarm in Beijing over its own economic prospects, as rising wages and a labor supply that is starting to decline combine with a housing bubble.

"If housing prices are not checked and land issues not resolved, they could threaten social stability and the national economy," the editorial said, according to the English translation in China Daily. "The seesaw battle between the central government and various vested interest groups reflect the nation is suffering from real estate disease. After seeing how difficult it is to implement tougher property policies, the public has realized that the vested interest groups have become powerful enough to resist or tamper with the central government's property-control policies."

"In essence, similar to the financial industry in the United States, China's real estate sector is too big to collapse. Therefore, it would not be an exaggeration to say that the real estate sector has hijacked the Chinese economy," it added. "The possibility of social instability is becoming real as the housing and related land issues worsen by the day."

In sum, China's leaders are nervous, even as they bully their neighbors and claim America is in decline. But now the United States, which knows that China suffers from its own weaknesses in the three-dimensional strategic chess game in the Asia-Pacific region, has drawn a line in the South China Sea. It remains to be seen whether that line will hold and on which side the Southeast Asian countries choose to stand.

del.icio.us	Digg	Reddit
YahooMyWeb	Google	Facebook

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News