But there's a logic leap here, overlooked to America's peril. As China grows richer, it is the state-controlled sectors of the economy that are growing more powerful, not the independent private sector -- which has been deliberately suppressed. Of the roughly 1,500 companies listed on the Shanghai and Shenzhen Stock Exchanges, less than 50 are genuinely private. As much as 95 percent of Beijing's $586 billion economic stimulus package, announced last November, will go to state-controlled enterprises. This makes China Inc. more powerful but does not push it closer to political reform. On the contrary, it has offered the Chinese Communist Party better and more resources to entrench its power and position in the country's economy and society.
The implications go well beyond China's borders, strategists warn. As Beijing's power grows, it will be less inclined, not more, to uphold the current regional order in Asia. In a recent study of 100 recent articles by more than two dozen of China's top strategic thinkers, I found that four of every five articles spoke of circumventing, reducing or superceding US powers and ideas in Asia. China views the liberal order as one designed to preserve American hegemony in the region. Even if Beijing has so far benefited enormously from rising up within the existing order, it might not be so friendly to it once it's risen far enough.
That from a Foreign Policy mag article defining the two camps viz China as those who stress 'function' - that the relationship is a function of economic inter-dependence and as long as that is the case everything will be fine - and those who stress the 'strategic' - that as long as the two powers diverge as a matter of political and cultural ideology it would be naive and short sighted to act as if the differences won't at some point overwhelm the dependencies and therefore a strategic approach to the relationship would be well advised. Needless to say, Obama falls into the former camp, myself into the latter.
