For six years now, the focus of American foreign policy has been on Iraq and the Middle East. Iraq has distracted us from other things and made us economically vulnerable. Those “other things” can be summed up pretty much in one word—China.

Since the collapse of the Soviet Union, the U.S. has been the world’s only superpower. But we have begun to recognize this rising giant in the Far East as a superpower in the making.

Its own economy has grown explosively. As America’s second largest trading partner, our trade deficit with China was almost $200 billion for 2007 and we owe that country close to a trillion dollars. As a result, China virtually has financed our war in Iraq.

China’s economic success has come at a steep price. In 2008, it’s expected to surpass the U.S. as the world’s largest producer of greenhouse gases. China is an ecological mess. The air in its industrial cities is poisonous, much of its farmland has been lost to erosion, and it faces a drinking water crisis.

Today, a newly confident  China is using what is called“soft-power” to expand its influence by presenting itself as a good and helpful neighbor. China’s success comes at the expense of American influence overseas, limiting our ability to promote democracy in some developing nations. This does not mean we are “losing.” But it does mean the system we are selling now has stiff competition.

Militarily, China is not close to superpower status. It cannot project military force around the world as we do. It cannot match American carrier battle fleets or the American Air Force. However, it can challenge them in Asian waters with its submarine fleet and with anti-ship missiles.

China has the world’s largest army and, of course, a nuclear arsenal. The most likely Chinese-American military conflict would be over Taiwan. China  probably would attack if Taiwan made any overt move at formal independence. And the U.S. is pledged to defend Taiwan from any attack. That is our most serious potential flash point.