The single most important challenge for the new administration—one with the potential to shape the 21st century—is China. As goes China, so go 1.3 billion men, women and children—one out of every five people on the planet.
China's economy is now roughly half the size of America's; in three decades, the two are likely to be about equal. What the Chinese eat, how much (or whether) they drive, where and how they choose to live, work and play: all will have an enormous impact on the availability and price of energy, the temperature of the planet and the prosperity of mankind.
Beijing's foreign policy is no less important. A cooperative China could help stem the spread of nuclear materials and weapons, maintain an open global trading and financial system, secure energy supplies, frustrate terrorists, prevent pandemics and slow climate change. A hostile or simply noncooperative China, on the other hand, would make it that much more difficult for the United States and its allies to tame the most dangerous facets of globalization. But the emergence of a cooperative China is anything but inevitable. That is why Washington needs a new approach to Beijing. Think of it as "integration."
Integration should be for this era what containment was for the previous one. Our goal should be to make China a pillar of a globalized world, too deeply invested to disrupt its smooth functioning. The aim is ambitious, even optimistic, but not unrealistic. The United States and China need each other. Neither wants to go to war over Taiwan, to see another conflict on the Korean Peninsula or to see world oil prices quadruple as a result of a military strike on Iran. Even more than that, China needs access to the U.S. market for its exports in order to maintain economic growth and domestic political stability. Americans, in addition to benefiting from low-cost Chinese imports, need Beijing to manage its large dollar reserves responsibly.
Americans must accept China's rise. There's no guarantee we could prevent it anyway, and the attempt would only worsen the rivalry. We should not exaggerate China's strength or the threat it poses. China's military, for all its improvements, is still a generation behind America's. And we should resist any calls to block China's access to the U.S. market. Trade and investment aren't just beneficial on their own terms; they also contribute to the web of ties that would bind China into an orderly world order.
To steer things in the right direction, Washington and Beijing should hold regular, high-level consultations. Consultations are to foreign policy what location is to real estate: not everything, but almost. The Bush administration made a good start with the cabinet-level Strategic Economic Dialogue (which also covers energy and environmental matters) and its military counterpart. Both should be extended and expanded by Barack Obama.
Those talks won't be enough, however. It was smart to include China in the recent economic summit in Washington. But it makes no sense for the finance ministers of seven of the leading industrial countries to continue meeting without China, or for the leaders of the G8 industrialized countries to convene absent their Chinese counterpart. China should be made a member of both groups and should be encouraged to cooperate more fully with the International Energy Agency to prepare for interruptions of fuel supplies.
Even if all this happens, China and the United States aren't likely to become allies. But they could build a relationship based on selective cooperation, complemented by an understanding to limit the fallout from their disagreements. Both countries have a stake in such an arrangement. Trying to bring it about—integrating China into the highest councils of the 21st century—should be a top priority for the new president and his team.