Beijing should bankroll a new "global rescue fund" to help countries hit hardest by the economic collapse. In the wake of the global...
A rescue would show that Beijing's model of development-one that doesn't involve messy things like democracy-can stand up to the Western democratic gospel preached since World War II.A Beijing bailout would not be pure altruism; it would benefit China greatly as well. By taking the lead, China would put itself in position to pick through Western financial firms and other companies for the best assets. Already, China's state-controlled fund has invested in Morgan Stanley, and has started recruiting people to work for the Chinese fund as American investment firms lay off workers en masse. Beijing also has negotiated new deals with Russia, possibly providing at least $20 billion in loans to Russian petroleum firms in exchange for oil, a resource vital to China's energy-hungry economy.Bailing out the West also could prove the final capstone in China's global ascendancy, signaling, like the United States's dominance of the post-WWII globe, that Beijing has arrived as a power-and even has lessons to teach other nations. A rescue would show that Beijing's model of development-one that doesn't involve messy things like democracy-can stand up to the Western democratic gospel preached since World War II. And once shy of promoting its model, China now may be ready to play the leader. In recent years, Beijing has started touting its success to other nations through annual training programs for thousands of officials from across the developing world.Some in Beijing already have begun crowing over this power shift. As one Chinese state media outlet put it, in slightly less diplomatic terms than some of the Chinese officials I've met: "The United States is no longer the omnipotent savior and global protector of American values."But passing the buck to Beijing would have benefits for other countries, too. By relying more on Chinese capital, Western countries would not have to run as large deficits, and could use their state funds for other desperately needed initiatives, like ensuring workers hurt by the crisis still have some form of health care or reforming retirement benefits, since most Western nations have aging societies. Many of these countries already have decimated their state treasuries: Between the $700 billion financial rescue package and the $787 billion stimulus bill, America's deficit will run over $1.5 trillion this year.Even better, passing the buck will help cement China into the international system, which would be an enormous relief for the United States and other Western nations. Right now, many Chinese leaders seem unsure whether Beijing should play nice with the world-by helping resolve the North Korean nuclear crisis, for example-or go it alone, as China has for decades, by continuing internationally frowned-upon activities like shipping arms to Zimbabwe even as Robert Mugabe's government brutalizes its opposition. Many American officials I've spoken with fear that, in the long run, a go-it-alone China will become angrier and more aggressive, like Japan before WWII, with few links to the world to restrain it.By investing in a global financial rescue, China could no longer go it alone; its fortunes would now be closely tied to the health of the world. A nation that has helped bail out, say, South Africa-a country hit hard by the global financial crisis-could hardly also continue backing Zimbabwe, where the ongoing political warfare destabilizes its neighbors by sending thousands of refugees streaming into South Africa. A nation investing all over the globe could no longer avoid joining the clubs of major powers, like the G-8 summit of industrialized nations, to which China does not yet belong. And a country that, eventually, might wind up using its massive savings to rescue much of America's financial institutions would find it harder to, one day, turn around and attack the United States.
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