To summarise the recent points of differences:
1. US is selling heaps of arms again to Taiwan, stoking Chinese fears and worries that US is again stirring up trouble in its backyard
2. US President Obama is going to meet Dalai Lama, always an issue of prestige and face for China.
3. US has been exhorting China to revalue its currency and give relief to the crisis US is facing at home due to job losses, slowing economy and myriad other ills afflicting US.
4. China is not supporting US stand against Iran and is also silent on North Korea
5. China is expanding influence across the Globe by buying up companies and even nations (with its money power) to ensure the supply of resources it needs to keep ticking.
6. The US manufactured GFC has been a WMD slicing off a big chunk of China's wealth and slowing China's growth.
So there it is. The balance of power has shifted and continues to shift and US is not comfortable with the loss of its status.
Obama, being so inexperienced, is not able to keep China close or in line. He has not charmed the Chinese with his silky tongue like he did his own countrymen. In fact he could not even woo the Muslim world which is also becoming more and more disillussioned with his policies on Afghanistan and Palestine. Obama's team have not really focussed on strengthening the relationship/partnership with China. Their focus has been all over and not getting any result on any issue.
China on the other hand, is not averse to playing its hand overtly and covertly especially now when the US is seen to be down and out on all fronts, economic and political.
The only link that is sustaining the relationship may be the huge investment China has made in the US Treasury bonds and other money-market instruments. China is seeing the value of this supposedly $2 trillion dollar investment not giving a good return and may even be losing a bit of capital too. But China is not able to make break away because of the trade with US.
But what if China one day awakens to the power it has over US and decides to do something about it.
One out of the box scenario.
How about China and US come to an agreement by which US withdraws its commitment to Taiwan and lets China absorb Taiwan if China writes off say $1 trillion of US's debt. In a manner US would be selling off Taiwan to China.
Similar scenarios can be thought of in the matter of N Korea.
Seems like more interesting times ahead for the world as the US and China try to force each other down.
