China Takes on the World

Already a commercial giant, China is aiming to be the world's next great power. Will that lead to a confrontation with the U.S.?

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Matias Costa

Chinese construction workers work on a structure that will be used during the 2008 Beijing Olympic Games.

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Hu's personal preferences seem to have helped shape the choice. He is known to have been stingingly critical of Kim in meetings with U.S. officials. Michael Green, senior director for Asian affairs at the National Security Council until December 2005, says Hu had long indicated to visiting groups of Americans his skepticism about Kim's intentions. When the North finally tested a nuke last fall, China joined the U.S. and other regional powers in condemning Kim and supported a U.N. Security Council resolution sanctioning Pyongyang. Says a senior U.S. official: "If you asked experts several years ago, Could you imagine China taking these actions toward a longtime ally in cooperation with us and Japan? Most people would have said no."

But nobody in Washington is getting carried away. Beijing has been helpful on North Korea because it's more important to China that Pyongyang not provoke a regional nuclear arms race than it is to deny the U.S. diplomatic support. Contrast such helpfulness with China's behavior on the dispute over Iran's nuclear ambitions. In December, China signed a $16 billion contract with Iran to buy natural gas and help develop some oil fields, and it has consistently joined Russia in refusing to back the tough sanctions against Tehran sought by the U.S. and Europe. "It's hard to say China's been helpful on Iran," says a senior U.S. official, and there is little sense that such an assessment will change any time soon.

Within its own neighborhood, there are signs that China's behavior is changing in more constructive ways. China fought a war with India in 1962 and another with Vietnam in 1979. For years, it supported communist movements dedicated to undermining governments in nations such as Indonesia, Singapore and Malaysia. Yet today China's relations with its neighbors are nothing but sweetness and light, often at the expense of the U.S. Absorbed by the arc of crisis spreading from the Middle East, the U.S. is simply less visible in Southeast Asia than it once was, and China is stepping into the vacuum.

While American exports to Southeast Asia have been virtually stagnant for the past five years, Chinese trade with the region is soaring. In the northern reaches of Thailand and Laos, you can find whole towns where Mandarin has become the common language and the yuan the local currency. In Chiang Saen, signs in Chinese read CALL CHINA FOR ONLY 12 BAHT A MINUTE. A sign outside the Glory Lotus hotel advertises CLEAN, CHEAP ROOMs in Chinese. It is not aid from the U.S. but trade with China--carried on new highways being built from Kunming in Yunnan province to Hanoi, Mandalay and Bangkok, or along a Mekong River whose channels are full of Chinese goods--that is transforming much of Southeast Asia.

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