As China Rises, Fed Is U.S.’s Bulwark in Asia

The yuan stops here.

Photographer: Andrew Harrer/Bloomberg

Here’s a way of thinking about the contest between the U.S. and China that doesn’t involve a Great Wall of Sand in the South China Sea or nuclear tensions on the Korean peninsula: The Federal Reserve and the dollar may be all that prevent China’s domination of Asia.

That might seem flippant, but I am convinced there’s something to it. President Donald Trump is no longer at the center of discussion about U.S. retrenchment. Don’t get me wrong: Heads may shake in disappointment and resignation at his latest antics, but not in amazement. During my recent two-week swing through Asia, the 45th president was maybe the third or fourth thing people wanted to talk about — sometimes, he didn’t even come up unless I raised him. That’s a huge change.

There’s a fading of influence, generally. Moreover, people in Asia don’t assume a post-Trump return to business-as-usual in 2021 or 2025. It’s not that the U.S. is fighting a losing battle for influence; more like America is a bit of an afterthought. Who knows, regardless of the White House occupant, whether the U.S. will be there for Asian allies and economic partners?