You know the one about the bank manager. You owe him $1,000, so he has you over a barrel. You owe him $1,000,000, and you have his undivided attention.
At that point you are interdependent. Your success and his are intertwined inextricably. Like China and the US today in the era of globalisation.
Because, paradoxically, the global outreach of capitalism to the farthest outposts even of "Communist" China creates ties that bind. New constraints and fetters on even the most powerful emerge out of the complex interdependence of the new order. What old Karl used to call contradictions, comrades.
In the last two weeks President Bush has been given a crash course in the reality of the management of global crises in that new era. And there are many in Washington who hope that he has learned it well. Some commentators have expressed surprised delight at Mr Bush's moderation, but, in truth, did he really have any option?
Gone are the easy certainties of the Cold War and even of the Reagan times. Then you could squeeze the Russian "evil empire" until the pips squeaked, and no one at home got hurt. Today the watchword is caution, and rhetoric is toned down.
Today China is the US's fourth-largest export market, and the US is China's largest, the source of a colossal $80 billion trade surplus last year alone. Some 35-40 per cent of Chinese exports come here, increasing from 16 per cent in the late 1980s. In large part that has been the engine that has driven the tiger-like growth in the Chinese economy.
The gain has been by no means one way. The economist Nicholas Lardy points out that the huge growth in imports has come largely through the displacement of south-east Asian suppliers by goods manufactured even more cheaply in China. Today 60 per cent of imported shoes come from China, an increase tenfold in the last decade.
US jobs have not suffered, and the consumer has benefitted through cheaper products. Indeed Nicholas Lardy argues that the substitution has been an important factor in the US's inflation-free growth.
Just as importantly, US companies have flooded into the Chinese market to avail of its 1.2 billion consumers. Coca-Cola now outsells its nearest rival in the soft drinks market by 15 times. Kodak has won half the market for film and photographic paper.
GM has a $1.5 billion car plant in Shanghai and a $230 million truck plant in Shenyang, with a workforce of 3,500. Twelve thousand work for Motorola, which has invested $3.4 billion in the country. And the other day Royal Dutch Shell and BP Amoco announced that they would be investing $7.5 billion by 2006.
Such facts speak irresistibly to a Republican President, despite the presence in his party and his cabinet of a substantial hawkish faction which see China's rise as a threat that must be met head-on without concessions and without displaying signs of weakness.
But Vice-President Dick Cheney has been virtually silent for the last week, and the first peep we heard out of the Secretary of Defence and leading hawk, Don Rumsfeld, was the words on his telegram to the returning crew: "Welcome home".
Instead Mr Bush delegated the management of the crisis to the calming hands of the Department of State, where seasoned career diplomats quickly got down to the task of finding a way out.
It may come to be seen as a defining moment in the new administration's diplomacy because the hawks had clearly so little to contribute beyond potentially ratcheting up the dispute.
Now their allies in Congress speak of retribution against China. It will have to pay a price, they say. And they have a number of potential targets.
The most devastatingly counterproductive would be refusal to renew, in June, China's Permanent Normal Trade Relations agreement, the pre-World Trade Organisation accession package that gives the Chinese largely free access to the US market.
To do so would certainly trigger a tariff war with crippling potential for US business interests. But despite some support for this course its proponents would almost certainly face a Bush veto and thus would need a two-thirds vote to sustain it. Most unlikely.
More immediately there is the issue of Taiwan and its arms package, a decision on which is expected next week. Taiwan's backers are certainly gung-ho, but a decision to sell all the weapons the Taiwanese want will be deeply provocative to Beijing.
Mr Bush can still send what officials are calling a "robust" package of weapons, while excluding the crucial Aegis radar system, and may well be advised to do so, not just to placate the Chinese.
In the past the US has refrained from giving Taiwan all it wants for fear of giving Taipei the military confidence to declare independence, a move that the US believes would almost inevitably trigger a catastrophic military response from Beijing.
Although the current government in Taipei is less likely to do so, such considerations may well stay Mr Bush's hand, despite intense pressure from his right to go further. Caution, a steady-as-she-goes approach, is more likely and appropriate, not to placate appeasers, but to reflect the reality of the new relationship of complex interdependence.
psmyth@irish-times.ie
