Buying Friends

The developing world no longer sees befriending The United States as a solution to their problems. More and more, it is turning to China for aid.

From The Washington Post:

Photo from Xinhua News

BEIJING -- With Jamaica's currency in free fall, unemployment soaring and banks heavily exposed to government debt, the Caribbean island's diplomats went into crisis mode earlier this year. They traveled to all corners of the world to seek help.

Jamaica's traditional allies, the United States and Britain, were preoccupied with their own financial problems, but a new friend jumped at the opportunity to come to the rescue: China.

When contracts for loan packages totaling $138 million were signed between the two countries in March, China became Jamaica's biggest financial partner. Headlines in Jamaica's leading newspapers, which only a year ago were filled with concern about China's growing influence in the region, gushed about its generosity.

"The loan couldn't have come more in time and on more preferred terms," E. Courtenay Rattray, Jamaica's ambassador to China, said in an interview. While the island nation continues to value its close relationships with Western powers, he added, in some respects Jamaica has more in common with China. "Those are developed countries. They don't have such an in-depth understanding of the development aspirations of Jamaica as does China," he said.

Overseas aid and loans are just one way China is asserting itself in its new role as a world financial leader. While polishing China's own image, Premier Wen Jiabao and other top leaders have blamed the West for the global economic crisis. Chinese officials increasingly are challenging the primacy of the dollar, warning other countries about the danger of keeping reserves in just one or two currencies, such as dollars and euros. And as the global economic crisis has eroded faith in U.S.-style capitalism, there's growing talk that a new "Beijing Consensus" will replace the long-dominant Washington Consensus on how developing countries should manage their economies.

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China, seeing an opportunity to assert itself during the financial crisis, is whipping up support and alliances with countries around the world. While this phenomenon surely worries some in the West, China is completely justified in wanting to be the one to fill in the gaps that the US used to be able to before it had such severe problems of its own.

It's easy to see why China could be seen as a preferable partner over the US to work with. Whereas the US aid came with assurances of commitment to free markets, fighting terror, and other things America loves, China, largely, has no guiding principles when it comes to shelling out money. From the Post article:

In a report last month titled "The Beijing Consensus," South Korea's Ministry of Strategy and Finance sounded an alarm over China's aid and loans. Developing countries that accept Chinese assistance, it warned, may lower their guard and gravitate toward a Chinese-style economic model.

Jamaica's Rattray dismissed those fears as overblown. China's financial assistance to his country came with "no requirement to adopt specific macroeconomic policy approaches," he said, and there is "no debate about the government of Jamaica's commitment to a free-market economic model."

China most likely sees these loans as long-term chances to improve its reputation as opposed to remaking the world into its ideological mold (whatever that may be):

Michael Pettis, a senior associate at the Carnegie Endowment for International Peace and a professor of finance at Peking University, says China's recent moves are more about public relations and aiding diplomatic allies than a true effort to remake the global financial system or to push a new model of development.

With all of the attention in the media and government now on the failure of Ameria's financial institutions and the subsequent financial crisis, we are largely forgetting the awful foreign policy under Bush and the consequences that his actions and decisions continue to have today.

The US is going to end up spending trillions (yes, trillions) of dollars on the Iraq war. Think about all of the things the US could've done with that money. Instead of fighting a shadow insurgency with a poorly thought-out war plan, it could've invested in developing countries who need the money to grow. That kind of investment, as opposed to inposing democracy through war planes, would've been a lot more effective.

With America weakened, China is seizing the opportunity to use its vast economic resources to position itself better for the future. I say more power to China for being able to do it.

The US blew any chance it had to fill this role when it elected an incompetent president, chose to start a war it didn't need to, spent recklessly on a war it hadn't planned for, and refused to see the writing in the sand and change approaches in the five plus years it's toiled in Iraq.

The US and its politicians are going to increasingly moan about the increasing influence of China, but one of the main causes of China's rise and the US' demise is the US and the disastrous decisions its people and politicians have made over the past decade.