Both China and the USA have been taken by surprise, and neither quite knows how to deal with it, writes International Editor Lindsey Hilsum as the Chinese President visits America.
The smiles and handshakes at the White House mask a ferment of insecurity and fear.
“It’s the most interesting visit we’ve had, because never before have we had such a negative attitude,” says Jim McGregor, of APCO Consulting, author of One Billion Customers, a seminal book on doing business in China.
Both China and the USA have been taken by surprise, and neither quite knows how to deal with it. People used to think that the Chinese economy would overtake America’s maybe mid-century. But America is scarcely growing, and last year China steamed past Japan into second place. Suddenly the world’s biggest country is snapping at the heels of the world’s most powerful.
“The truth of the matter is that China suddenly got elevated and doesn’t know what to do with it,” says Jim McGregor. “This is country run by risk adverse engineers. And they’re marvellous at planning – we’re going to do this by 2005, this by 2010, build all these industries by 2020.
“All of a sudden the global financial crisis happened, the rest of the world collapsed and China found itself on stage alone.”
Economic success leads to diplomatic and political power, yet China’s foreign ministry still touts the old mantras about being a developing country. When I asked about China’s new place in the world, a senior Chinese official recently responded with a quote from Zhou Enlai from 1953.
Others quote Deng Xiao Ping saying China should “bide its time” and “keep its head down and build itself up”.
But if the Foreign Ministry hasn’t worked it out, others have. It’s not just that China is becoming more powerful in the world, but the balance of power within China is in flux too.
The Chinese military tested a new stealth fighter while the US Defence Secretary was meeting President Hu Jintao in Beijing last week. US officials in the room reported that Mr Hu seemed surprised – he may be Chairman of the Central Military Committee but he apparently didn’t know what the military were up to.
Then there are the state owned industries, which are turning into multi-nationals. American and European politicians used to nurse the “China Fantasy”, believing that as China grew, it would become a free market with a democratic system. But it’s the state-owned industries not private enterprises which are the leaders of growth, garnering more money and power for themselves and the Communist Party.
This morning my TV suddenly went to black. CNN is on a 10 second delay in China, and as their story mentioned Nobel prize winner, Liu Xiaobo, a dissident languishing in a Chinese prison, the censors pressed the button. The Chinese government was furious about Liu being lauded, and last month succeeded in pressuring 19 countries not to attend the ceremony in Oslo.
That’s a testament to China’s new-found power. But maybe it’s also testament to the fact that they don’t yet know quite how to wield it.