US domination is giving way to greater balance.
Most Americans have been watching the presidential transition here in Washington very closely. But another, much broader political transition has also been accelerating in recent weeks: the shift from the US-dominated world we have lived in since 1989 to one in which global power has become significantly more diffuse, more networked, and more Asian.
This broad global shift will shape the agenda and achievements of the Obama presidency from Day 1.
One key event illustrates this change. On Dec. 4, Treasury Secretary Henry Paulson went to Beijing to beg China to help stabilize the tanking US economy. In earlier decades, when nations around the world had economic crises, they'd send officials to Washington to ask for help. Now, it's the US that's in trouble. President Bush, to his credit, recognizes that America needs the help of others and has started to work at getting it.
Welcome to the networked world, one in which cash-rich China and Japan each own more than $570 billion of Treasury debt – and the People's Bank of China holds a reported $340 billion stake in Fannie Mae and Freddie Mac.
During the past 60 years, US presidents have used Washington's economic leverage over other countries to force policy changes they judged vital to US interests. Today, the economic relationship between Beijing and Washington is more complex than that. One observer has called it a "balance of financial terror." But the worldwide financial crisis has struck the West harder than China, tipping the balance further toward Beijing.