Americas Quarterly - Winter 2012

Time for a Strategic Reset ELIZABE TH ECONOMY SPECIAL SECTION CHINA

STRATEGIC

TIME FOR A

Chineseforeign policy hashad a good run. With a booming economy as its calling card, Beijing has pushed to the forefront of the emerging economies, negotiated wide- ranging free-trade agree- ments with its neighbors, and rejuvenated previously moribund economies through its demand for natural resources. Its vast foreign currency holdings have also transformed Beijing into the world’s banker. China is now the largest foreign holder of U.S. debt. It is a more significant provider of loans to the developing world than the World Bank, and is one of the few global economies capable of significant assistance in the midst of the eurozone crisis.

China’s very success, however, has bred new challenges for its foreign policy. The country’s vast economic reach means it must now be prepared to address crises far afield, negotiate difficult tradeoffs between its economic and security interests, and be responsive to the demands of the global community.

Push back: Environ- mentalists outside the Chinese embassy in Nairobi, Kenya, protest he construction of a Chinese-financed hydro- electric dam, Gibe III.