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Page last updated at 11:58 GMT, Wednesday, 18 November 2009

Matt Frei's diary: Obama visits America's banker

By Matt Frei
BBC News, Washington

President Obama meets Presiden Hu Jintao
The two leaders were all smiles after their joint news conference

It should not come as a surprise that President Obama has been dancing delicately and deftly around the issues of Tibet and human rights while on his visit to China.

Who after all would kick sand in their banker's face? China now holds reserves of $2.3 trillion. It owns more US debt than anyone else.

China's savings sustain the US economy for better or worse. It is the financial equivalent of assured mutual destruction.

The Chinese underwrite America's lavish lifestyle. Their family silver is kept in dollars. One can not live without the other. But you can see why Barack Obama has been at pains to be a most courteous guest.

Before the trip, he obliged his hosts by not seeing the Dalai Lama when the Tibetan spiritual leader was visiting Washington. The word Taiwan has not even been whispered.

Human rights are down the menu of public grievances. Obama even chimed in with President Hu Jintao by refusing to take even a single question from the press at a "news conference" in Beijing.

Perhaps he was trying to avoid the inevitable grilling over Afghanistan or health care that follows him around the globe like a stubborn shadow.

I can see his annoyance. But I remember how previous presidents fielded difficult questions from abrasive reporters - and answered back with relish - while standing next to Chinese leaders.

Matt Frei in the BBC World News America studio
The ability of the regime to behave less like a nanny with a truncheon could determine the future of the world's most populous nation.

Freedom of the press is, after all, one of the few things that the US still has over the people who make their washing machines, assemble their computers, sell them their toys and lend them their mortgage money.

I can also see why the Chinese hate being lectured by America on human rights.

The lingering existence of Guantanamo Bay and memories of Abu Ghraib have eroded the moral high ground like a swarm of termites, however insistently Obama has banned the use of torture.

But something else has changed in the chemistry of the world's most important bilateral relationship. America is now more in awe of China than vice versa.

Afghanistan and Iraq have shown the limits of US military power. We are no longer impressed, as we once were, by million-dollar smart bombs if crude but deadly IEDs planted in drinks cans can kill or injure American soldiers on a daily basis.

The stonewalling, sandbagging and petty in-fighting on Capitol Hill have shown the limits of democracy in the world's greatest democracy. And the Great Recession has shown the limits of America's economic clout.

Expansion v decay

We are limping towards a jobless recovery. A year ago, China saw millions of people laid off from the factories of Guandong and Fujian. Now they are posting more than 8% growth, reaping the benefits of a whopping stimulus package that even dwarfs America's, while taking dramatic steps to encourage their own citizens to consume.

Meanwhile, they have established closer ties with countries like Brazil and Peru in what used to be called America's backyard.

Their factories and engineers are seen all over Africa with the same mercantilist zeal once displayed by the East India Company.

And although they vie with America to be the world's biggest polluter they are also aggressive about embracing green technology.

Chinese security guards walk past an advertisement for iPhone
The moment of greatest danger will come when China's Internet savvy, I-phone-wielding, BMW-driving, condo-owning, well travelled middle class wants to be treated like adults and the regime continues to talk down to them like children

According to the New York Times, an astonishing 86% of the population believe the country is heading in the right direction. In the US, that figure languishes at 37%.

In Europe and America, we are managing decay. In China, they are managing expansion. Oh and did I mention the number of billionaires? China now boasts 130, still behind America's 349 but multiplying at a much faster rate.

There are some obvious reasons for this high-octane growth. When two thirds of the population have never owned a car or a washing machine, the economy has a long way to go before it reaches saturation.

Most Chinese people have low if any expectations of how wealthy they should be. The only sense of entitlement is confined to the Communist nomenklatura.

But China's leaders are well aware of the political dynamite produced by high level corruption. The worst abuses end with the firing squad.

On the whole, Chinese people are prepared to make enormous personal sacrifices in order to see the next generation flourish.

I remember meeting an engineer at the tip of southern China who had left his family in Hohhot in Inner Mongolia 1,500 miles (2,400km) away to make a living. He was desperately homesick. He returned home once a year, but it did not even occur to him to ditch the job.

China's Achilles' heel

Resilience is linked with a willingness to take risks. I also remember my Chinese cameraman in Hong Kong who had lost a fortune during the Asian financial crisis in 1997. The minute the stock prices were low enough, he borrowed more money, piled it back into the market, made a fortune and repaid his debts.

What you see in China today is a curious combination of breathless expansion and boundless optimism, wrapped in national pride, combined with the patience produced by 5,000 years of continuous history.

America at its best has the energy and the optimism. It does not lack in patriotism. But it also labours under the need for instant gratification.

China's astonishing rise has one Achilles' heel. Its expansion rests upon the Faustian pact between the people and their rulers: we will be politically obedient as long as you allow us to make a mint and spend it.

The moment of greatest danger will come when China's Internet savvy, iPhone-wielding, BMW-driving, condo-owning, well travelled middle class wants to be treated like adults and the regime continues to talk down to them like children.

The ability of the regime to behave less like a nanny with a truncheon could determine the future of the world's most populous nation.

Matt Frei is the presenter of BBC World News America which airs every weekday on BBC News, BBC World News and BBC America (for viewers outside the UK only).

And you can hear Matt present Americana on BBC Radio 4 and the BBC World Service every week.


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