The middle kingdom is rewriting the rules on trade, technology, currency, climate — you name it
Back when President Obama lived in Indonesia, in the late 1960s, China loomed as a malign force to the north, where communist cadres plotted to export their revolution to the rest of Asia. The Jakarta he’ll visit later this month has an entirely different attitude toward the People’s Republic. Local companies are doing deals in yuan, the Chinese currency, rather than dollars. If Jakarta gets in financial trouble, as it did back in 1997, it will be able to call on a $120 billion regional reserve fund, an Asia-only version of the International Monetary Fund due to be launched this month, bankrolled in part by China’s massive foreign-exchange reserves. Asia’s key economic political issues are no longer being hashed out on trips like Obama’s — between individual nations and the United States — but at summits that include only China, Japan, South Korea, and the Southeast Asian countries. “China has been instrumental in this shift in focus from ‘Asia-Pacific,’ which was largely about the U.S. and Japan, to ‘East Asia,’ which has China at the center,” says Martin Jacques, author of When China Rules the World.