The answer seems obvious. The impact will be for the partnership to strengthen and become more co-dependent, both politically and economically. The Sino-U.S. partnership has been upgraded from being one between “competitors” to one between “strategic partners” over the past decade. Furthermore, since Obama took office in January, ties have been ratcheted up one notch higher as the new president became beleaguered by a host of thorny issues, domestic as well as international, that need a helping hand from Beijing.

On global issues, none of the most difficult ones like Iran, North Korea and climate change would be solvable without the cooperation of Beijing. Premier Wen Jiabao has just concluded a visit to Pyongyang where he signed “pacts of cooperation” with North Korea's reclusive leader Kim Jong-Il, who is defiant of the United Nation's economic sanctions against his regime for developing nuclear weapons. China is the only country that wields real influence over North Korea, whose survival depends on economic aid from China. Obama needs Beijing's help to prod Kim to return to the six-party talks to resolve the issue of nuclear threat posed by Pyongyang's incipient nuclear program.

Iran is an even bigger headache for President Obama, who faces a hard and difficult choice in dealing with a belligerent Mahmoud Ahmadinejad, the newly re-elected Iranian president who insists on pursuing his country's nuclear ambitions, despite warnings from the United States and the United Nations. Obama, with two costly wars on his hands, one “of choice” and the other “of necessity,” cannot afford a new one. The only available measure to rein in Iran appears to be additional U.N. sanctions against Tehran, a move that would need the support of China and Russia — two veto-wielding permanent members of the U.N. Security Council. But will Beijing cooperate? Only last week, Wen Jiabao told a visiting Iranian leader in Beijing that China is eager to expand its economic ties with oil-rich Iran, a declaration that has dampened U.S. hopes for sanctions against Iran. To make things worse, Secretary of State Hillary Clinton was rebuffed in Moscow last week when she sought Russian support for sanctioning Tehran.

On the issue of climate change, Beijing's role is pivotal because the “world's workshop” and the world's largest exporting nation has become the world's top polluter. At a time when polar caps are melting fast due to greenhouse emissions, Obama's pledge to deal with global climate change must first secure backing from China, which so far has balked at cutting carbon dioxide emissions on grounds that it is still a developing country and should not be held accountable for the environmental mess today. If Obama is to succeed in his effort to win a new climate accord in the forthcoming Copenhagen conference in December to replace the Kyoto Protocol, which expires in 2012, he must first persuade Beijing to go along. But will Beijing oblige?

On economic issues, President Obama needs Beijing more than the other way around. Now it has suddenly appeared that America is on the receiving end of the partnership, reversing a situation that has been the case for decades, due primarily to America's festering fiscal woes.

Last Friday, the U.S. Treasury announced that the federal budget deficit in fiscal year 2009 ending September 30 reached US$1.4 trillion, or 10 per cent of gross domestic product, the largest deficit-to-GDP ratio since World War II. In contrast, the Clinton era had a budget surplus, and George Bush had only a 3.2 percent deficit-to-GDP ratio, or US$459 billion, when he left office. And the outlook appears bleak. The accumulated government debt will reach US$12 trillion, or 85 percent of GDP, this year. It might balloon to US$21 trillion in a decade.

Who is to pay for the deficit? Foreign investors in U.S. debt, and China is by far the largest buyer of Treasurys, totaling about a trillion U.S. dollars. America needs China's hard-earned cash from its exports to the United States, which has been the mainland's largest market for decades.

While the relationship is mutually dependent, Beijing has reason to worry about the safety of their huge investment in U.S. debt. Remember what Wen Jiabao said last March in Beijing? “Of course we are concerned about the safety of our assets. To be honest, I am definitely a little bit worried.” His worry was not unfounded, though, as the value of the dollar has kept falling due to Washington's out-of-control spending, making China's investment worthless over time.

Will Beijing continue to buy the weakening dollar? The answer, strangely, is probably yes, although with perhaps more caution and diversification. Despite the global recession, China's foreign exchange reserves have kept growing, to US$2.3 trillion so far, mostly from the surplus of its unbalanced trade with America. China and America need each other, like a drug dealer needs an addict, as some economists have described.

When Obama visits Beijing next month, he is expected to ask the Chinese to invest more in Treasurys, and he may reach some sort of quid pro quo with his host, like a reiteration of U.S. support for one China, as well as opposition to protectionism. Obama, the new Nobel peace laureate, should return home with a stronger partnership with China, which he needs as an ally of sorts to carry out his agenda of “change” that the troubled world is awaiting with fervent expectations.