Rethinking Sino-US ties

Mounting imbalances in the US were the mirror image of those in China - a massive shortfall in domestic savings, unprecedented current account deficits, excess debt and an asset-dependent economy that was ultimately built on speculative quicksand.

Predictably, in keeping with the pathology of codependence, the lines distinguishing the two countries became blurred. Over the past decades, Chinese subsidiaries of Western multinationals accounted for more than 60 percent of the cumulative rise in China's exports. In other words, the export miracle was sparked not by State-owned Chinese companies but by offshore efficiency solutions crafted in the West. This led to the economic equivalent of a personal identity crisis: Who is China - them or us?

In personal relationships, denial tends to mask imbalances, but only for so long. Ultimately, the denial cracks and imbalances give rise to frictions and blame, holding a codependent partner responsible for problems of one's own making. Such is the case with the US and China.

America blames China for its trade deficits and the pressures they inflict on workers, citing the huge accumulation of foreign exchange reserves as evidence of an unconscionable currency manipulation. China counters by highlighting the US' savings shortfall - a gap that must be plugged by surplus savings from abroad, a current account deficit, and a multilateral trade imbalance with more than 100 countries. China says being fixated on a bilateral imbalance is the source of the US' multilateral problem.

The same blame game of codependency is apparent in the cyber security controversy. The US contends that China steals intellectual property for competitive reasons, inflicting grave damage on companies and workers. China, for its part, claims that the US is guilty of equally egregious violations - widespread cyber spying on international leaders, trade negotiators and foreign companies.

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