While the U.S. and European economies contracted, Beijing quickly adopted policies aimed at boosting domestic demand and infrastructure investment. This resulted in impressive expansion: 9% growth in the gross domestic product in 2009 with a prediction of 12% in the current year. This led Goldman Sachs' analysts to advance their forecast of the year when China would become the globe's number one economy from 2050 to 2027.
For the first time since World War II, it was not the United States that pulled the rest of the world out of negative growth, but China. The U.S. has emerged from the financial carnage as the most heavily indebted nation on Earth, and China as its leading creditor with an unprecedented $2.4 trillion in foreign reserves.
Its cash-rich corporations are now buying companies and future natural resources from Australia to Peru, Canada to Afghanistan where, last year, the Congjiang Copper Group, a Chinese corporation, offered $3.4 billion -- $1 billion more than the highest bid by a Western metallurgy company -- to secure the right to mine copper from one of the richest deposits on the planet.
Karzai the Menace Becomes Karzai the Indispensable
On assuming the presidency, Obama made no secret of his dislike for his Afghan counterpart, Hamid Karzai. To circumvent his central government's pervasive corruption, senior American officials came up with the idea of dealing directly with Afghan provincial and district governors. In the presidential election of August 2009, their preference for Abdullah Abdullah, a serious rival to Karzai, was widely known.
When Karzai resorted to massive vote rigging to ensure his reelection and turned a deaf ear to Washington's exhortations to clean up his administration, Obama decided to use a stick to bring Washington's latest client regime in line. In a dramatic gesture, he undertook an air journey of 26 hours -- from Washington to Kabul -- over the last weekend in March to deliver a 26-minute lecture to Karzai on the corruption and administrative ineptitude of his government. The Afghan leader had few options but to listen in stony silence.
When, however, Karzai read a news story in which an unnamed senior American military official suggested that his younger half-brother, Ahmed Wali, the power broker in the southern province of Kandahar, deserved to be put on the Pentagon's current list of drug barons to be killed or captured, his patience snapped.
An incensed Afghan president responded by claiming that the U.S. was deliberately intensifying and widening the war in Afghanistan in order to stay in the region and dominate it. He added that, if Washington's pressure continued, he might join the Taliban. (He had, in fact, been a significant fundraiser for the Taliban after they captured Kabul in September 1996.)
Obama reacted as he had done in the past. When facing a serious challenge, he retreated. From being a stick wielder he morphed into a carrier of carrots during a Karzai visit to Washington early this month (that, in March, administration officials were threatening to postpone indefinitely).
The high point of the wooing of Karzai -- worthy of being included in a modern version of Alice in Wonderland -- was a dinner Vice-President Joe Biden gave for the Afghan dignitary at his residence. At the very least Karzai must have been bemused. In February, Biden had staged a dramatic walk-out halfway through a dinner at the Afghan president's palace after Karzai denied that his government was corrupt or that, if it was, he was at fault.
Despite the Obama administration's "red carpet treatment" and "charm offensive," Karzai was boldly honest at a joint press conference with Obama when he described Iran as "our bother country, our friend."
The same sentiments would soon be expressed by another leader -- in Brazil.
President da Silva Thumbs His Nose at Obama
Ever since assuming the presidency of Brazil in 2003, Luiz Inacio Lula da Silva has, when necessary, not hesitated to challenge U.S. policy moves. He has clashed with Washington on world trade (the Doha round),global warming, and continuing U.S. sanctions against Cuba.
In December 2008, he chaired a meeting of 31 Latin American and Caribbean countries, which excluded the United States, at the Brazilian tourist resort of Sauipe. The next month, instead of going to the World Economic Forum at Davos, Switzerland, da Silva attended the Eighth World Social Forum at Belem at the mouth of the Amazon River.
He was critical of the way Obama compromised democracy in Honduras, and, despite the Obama administration's dismay and opposition, he invited Iranian president Mahmoud Ahmadinejad to Brasilia in November 2009 for talks on the Iranian nuclear program, his first attempt at high-profile international diplomacy. (A week earlier he had warmly received Israeli president Shimon Peres in the Brazilian capital.) Six months later, he paid a return visit to Tehran -- and made history, much to the chagrin of Washington.
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