Did a mistaken belief that globalization had replaced geopolitical strategy in the post-cold-war world blind the Clinton Administration to the dangers of Chinese espionage? Did an economic imperative in U.S. foreign policy lead to a decision to allow Hughes Electronics Corp. to make Chinese rockets more accurate and keep a sharp buildup of short-term missiles facing Taiwan from setting off alarms? Of all the conjecture surrounding the spy case and the forthcoming Cox Commission report on Chinese espionage, the notion that markets, not strategic national interests, now determine international relations is the most provocative.

The Clinton Administration's effort to make economics a focus of foreign policy was a breakthrough. Opening markets, promoting exports, and taking CEOs on trips abroad boosted growth. But in hindsight, the policy shift may have gone too far. Indeed, policymakers may have been seduced by the notion that bond traders had become more powerful than army generals, that markets were more potent than missiles, that national sovereignty was being ceded to the Internet and the forces of international economic competition.

The cold war may be over, but any student of the 19th century understands that nations will always have strategic interests--even as they do business with each other. Reducing foreign policy to economics or to social welfare (as in Haiti, Bosnia, and Somalia) can lead to the kind of trouble the U.S. now finds itself in with both China and Russia.

There is nothing more important to America in Asia than a stable relationship with China: But it is proving an elusive goal. China wants power and respect--and believes a strong economy and military will give it both. It sees the U.S. as a rival. Modernizing China's long-range missiles in the name of helping U.S. aerospace companies doesn't make sense in this context.

Neither does expanding NATO. Of all the threats to America, Russia's loose nukes are paramount. Bringing Poland, Hungary, and the Czech Republic into NATO actually impairs the security of the U.S.: Russia, wondering why NATO is expanding after the cold war is over, will not implement the START II treaty to reduce nuclear weapons or sign START III.

U.S. foreign policy must be rebalanced. Globalization should be added to geopolitics. It cannot replace it. In this rebalancing, there is a chance for a new bipartisan approach to China and a new focus on what's important in Russia.

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