North Korea’s despicable shelling of civilians and the West’s necessarily wary response because the country is a nuclear power underline two truths about today’s world.

First, our planet is just as dangerous a place as ever it was in the Cold War.

Second, what happens in the Far East matters now more than ever before.

For the past half-millennium, the world has belonged to the West, yet in only a few years power has shifted eastwards.

Are we ready militarily, economically and perhaps most importantly, psychologically, to come to terms with this overwhelming geopolitical fact?

POWER

When the Cold War against Soviet Communism was won 20 years ago after a bruising, violent but thankfully never cataclysmic struggle lasting decades, the West collectively exhaled.

We were promised a kinder, gentler planet, a new world order without the nightmare of nuclear annihilation but with the opportunity of cashing in a peace dividend from lower defence spending.

From a mutually assured destructive standoff, we were meant to move towards what Winston Churchill once called “the broad sunlit uplands” of world peace.

Us thinker Francis Fukuyama even proclaimed the “End of History” as countries embraced social democracy in a new world dominated by America.

All that ended on 9/11, of course. Yet however seriously al-Qaeda attacked the US, fundamentalist Islam never came near to having the technological, economic or military wherewithal to replace America as the greatest world power.

Today, China is vying to do that in a multipolar world that is also seeing India emerge as an economic superpower and Brazil, Indonesia, Iran and South Africa thrusting forward too. Even the defeated Cold War foe Russia can be heard sabrerattling against her neighbours. Cold War certainties are dead. Now we have a new world disorder.

“China is a sleeping giant,” said Napoleon two centuries ago. “When she awakes she will shake the world.”

Ever since Richard Nixon and Henry Kissinger went to Beijing in 1973 to open up Mao’s Middle Kingdom to the rest of the world, China has been stirring.

But in the past decade she has taken massive strides towards world primacy.

In 1990 China accounted for 14% of global manufacturing. Today it is 37%.

When the West entered recession in 2007-08, China and India continued growing impressively. Leaving Japan by the wayside, they are recording growth rates that the Financial Times calls “the most important rebalancing of wealth and power since America emerged as a new force at the end of the 19th century”.

Analysts disagree when China’s GDP will outstrip America’s, some say as early as 2020, others as late as 2040, but they all agree it will.

Hardly a day goes by without the realities of our Asia-centric world being underlined. This week Admiral Mike Mullen, chairman of the US Joint Chiefs of Staff, called China’s role in the North Korean incident “absolutely critical… it’s very important for China to lead”.

A TICKING BOMB

At the G20 summit this month, President Obama and his Treasury Secretary Timothy Geithner had strips torn off them by the Chinese and other Asian leaders and could only respond haplessly, not least because holding $3trillion of US debt gives China a whip hand.

They could destroy the dollar overnight if they so desired, although presently it is not in their interests with America such a huge importer of Chinese products.

Mr Obama’s recent call for India to get a seat on the UN Security Council also indicates the new global power league.

The world’s fastest supercomputer, the Tianhe-1A, is being built by Chinese scientists. Huge contracts are being signed with African and South American countries to provide China with the raw materials it needs to fuel its boom.

Citigroup made over a third of its $9billion global profits out of Asia this year. India’s Tata Motors have bought Jaguar and Land Rover.

And next year China will overtake the US as the world’s biggest manufacturer.

Asia’s rise is sustained and seemingly especially by its major competitors, a humbled US with 9.5% unemployment and the EU.

With China and India having such huge populations, extensive natural resources, cheap labour and impressive skills bases, the future belongs to them.

The 49% of Americans polled last month who do not expect China to become the world’s No. 1 superpower are in for a rude awakening. Of course, there are problems for Asian powers that their Western rivals do not face. China’s one-child policy makes it a ticking demographic timebomb, the only state in the world where the old are set to outnumber the young.

The Communists might guarantee national unity, but newly rich middle classes have historically resented the political repression of a one-party state.

Chinese Nuclear Bomb

Meanwhile, India’s largely Victorian rural infrastructure needs radical overunstoppable, haul. Its democracy and shared heritage, however – and the English language -make a far more attractive overall victor for the West than China.

History shows rich, thrusting nations project their power militarily.

China and India are already active in space, with the Chinese already having an anti-satellite weapon.

They also have a 200 million-strong army. In addition they are building submarines, stealth aircraft – they produce state-of-the-art drones – and long-range missiles able to track and sink aircraft carriers.

Iran is building a nuclear bomb and Russia is spending more than $276 billion between now and 2015 on six nuclearpowered carriers, eight ballistic missile subs and huge Arctic icebreakers. Meanwhile, Britain is about to decommission the Navy’s flagship HMS Ark Royal.

VICIOUS

In 1956 Soviet leader Nikita Khruschev told the West: “We will bury you.”

But the USSR had no hope of burying capitalism because communist economics were never going to be able to compete with free enterprise in delivering reasonably priced goods and services.

Heeding the lesson, China has harnessed the free market to its remaining Communist ideology to create a hybrid that will soon be poised to bury us.

The prospect of a vicious totalitarian power dominating the world in our children’s and grandchildren’s lifetimes is not an inviting one.

The achievements that brought first Britain and then America to world primacy are today being used by the Chinese to outstrip the United States and Europe, but with one vital ingredient absent – political liberty.

English-speaking people cannot escape the logic of these nerve-racking developments.

As the hymnbook puts it: “Earth’s proud empires pass away.”

Our time in history’s limelight is almost over.  All we can do, in the interests of our waning Western civilisation, is hope India beats China to the prize.

China may soon put an end to that.

U.S. naval planners are scrambling to deal with what analysts say is a game-changing weapon being developed by China — an unprecedented carrier-killing missile called the Dong Feng 21D that could be launched from land with enough accuracy to penetrate the defenses of even the most advanced moving aircraft carrier at a distance of more than 1,500 kilometers (900 miles).

Analysts say final testing of the missile could come as soon as the end of this year, though questions remain about how fast China will be able to perfect its accuracy to the level needed to threaten a moving carrier at sea.

The weapon, a version of which was displayed last year in a Chinese military parade, could revolutionize China’s role in the Pacific balance of power, seriously weakening Washington’s ability to intervene in any potential conflict over Taiwan or North Korea. It could also deny U.S. ships safe access to international waters near China’s 11,200-mile (18,000-kilometer) -long coastline.

While a nuclear bomb could theoretically sink a carrier, assuming its user was willing to raise the stakes to atomic levels, the conventionally-armed Dong Feng 21D’s uniqueness is in its ability to hit a powerfully defended moving target with pin-point precision.

Funded by annual double-digit increases in the defense budget for almost every year of the past two decades, the Chinese navy has become Asia’s largest and has expanded beyond its traditional mission of retaking Taiwan to push its sphere of influence deeper into the Pacific and protect vital maritime trade routes.

“The Navy has long had to fear carrier-killing capabilities,” said Patrick Cronin, senior director of the Asia-Pacific Security Program at the nonpartisan, Washington-based Center for a New American Security. “The emerging Chinese antiship missile capability, and in particular the DF 21D, represents the first post-Cold War capability that is both potentially capable of stopping our naval power projection and deliberately designed for that purpose.”

Setting the stage for a possible conflict, Beijing has grown increasingly vocal in its demands for the U.S. to stay away from the wide swaths of ocean — covering much of the Yellow, East and South China seas — where it claims exclusivity.

It strongly opposed plans to hold U.S.-South Korean war games in the Yellow Sea off the northeastern Chinese coast, saying the participation of the USS George Washington supercarrier, with its 1,092-foot (333-meter) flight deck and 6,250 personnel, would be a provocation because it put Beijing within striking range of U.S. F-18 warplanes.

The carrier instead took part in maneuvers held farther away in the Sea of Japan.

U.S. officials deny Chinese pressure kept it away, and say they will not be told by Beijing where they can operate.

“We reserve the right to exercise in international waters anywhere in the world,” Rear Adm. Daniel Cloyd, who headed the U.S. side of the exercises, said aboard the carrier during the maneuvers, which ended last week.

But the new missile, if able to evade the defenses of a carrier and of the vessels sailing with it, could undermine that policy.

“China can reach out and hit the U.S. well before the U.S. can get close enough to the mainland to hit back,” said Toshi Yoshihara, an associate professor at the U.S. Naval War College. He said U.S. ships have only twice been that vulnerable — against Japan in World War II and against Soviet bombers in the Cold War.

Carrier-killing missiles “could have an enduring psychological effect on U.S. policymakers,” . “It underscores more broadly that the U.S. Navy no longer rules the waves as it has since the end of World War II. The stark reality is that sea control cannot be taken for granted anymore.”

Yoshihara said the weapon is causing considerable consternation in Washington, though — with attention focused on land wars in Afghanistan and Iraq — its implications haven’t been widely discussed in public.

Analysts note that while much has been made of China’s efforts to ready a carrier fleet of its own, it would likely take decades to catch U.S. carrier crews’ level of expertise, training and experience.

But Beijing does not need to match the U.S. carrier for carrier. The Dong Feng 21D, smarter, and vastly cheaper, could successfully attack a U.S. carrier, or at least deter it from getting too close.

U.S. Defense Secretary Robert Gates warned of the threat in a speech last September at the Air Force Association Convention.

“When considering the military-modernization programs of countries like China, we should be concerned less with their potential ability to challenge the U.S. symmetrically — fighter to fighter or ship to ship — and more with their ability to disrupt our freedom of movement and narrow our strategic options,” he said.

Gates said China’s investments in cyber and anti-satellite warfare, anti-air and anti-ship weaponry, along with ballistic missiles, “could threaten America’s primary way to project power” through its forward air bases and carrier strike groups.

The Pentagon has been worried for years about China getting an anti-ship ballistic missile. The Pentagon considers such a missile an “anti-access,” weapon, meaning that it could deny others access to certain areas.

The Air Force’s top surveillance and intelligence officer, Lt. Gen. David Deptula, told reporters this week that China’s effort to increase anti-access capability is part of a worrisome trend.

He did not single out the DF 21D, but said: “While we might not fight the Chinese, we may end up in situations where we’ll certainly be opposing the equipment that they build and sell around the world.”

Questions remain over when — and if — China will perfect the technology; hitting a moving carrier is no mean feat, requiring state-of-the-art guidance systems, and some experts believe it will take China a decade or so to field a reliable threat. Others, however, say final tests of the missile could come in the next year or two.

Former Navy commander James Kraska, a professor of international law and sea power at the U.S. Naval War College, recently wrote a controversial article in the magazine Orbis outlining a hypothetical scenario set just five years from now in which a Deng Feng 21D missile with a penetrator warhead sinks the USS George Washington.

That would usher in a “new epoch of international order in which Beijing emerges to displace the United States.”

While China’s Defense Ministry never comments on new weapons before they become operational, the DF 21D — which would travel at 10 times the speed of sound and carry conventional payloads — has been much discussed by military buffs online.

A pseudonymous article posted on Xinhuanet, website of China’s official news agency, imagines the U.S. dispatching the George Washington to aid Taiwan against a Chinese attack.

The Chinese would respond with three salvos of DF 21D, the first of which would pierce the hull, start fires and shut down flight operations, the article says. The second would knock out its engines and be accompanied by air attacks. The third wave, the article says, would “send the George Washington to the bottom of the ocean.”

Although investors had been expecting the People’s Bank of China to push the reserve requirement ratio higher after an increase last month, few thought the second rise would come so soon.

Markets were rattled by fears that the pace of monetary tightening in China would be more aggressive than had been reckoned on, potentially denting global growth.

Investors pulled back from riskier assets, buoying the dollar which rose 0.7 percent against a basket of currencies. Stocks fell, while European and U.S. bonds jumped.

“The central bank is sending clear messages to banks that it wants more reasonable bank lending and it is paying close attention to inflation,” Xie Xuecheng, an economist with Southwest Securities in Beijing, said.

The 50 basis point increase comes into force on February 25.

The surprise was all the greater since China on Thursday had reported an unexpected slowdown in consumer price inflation in January to 1.5 percent.

Analysts had cautioned that the dip in inflation was only likely to be temporary because of seasonal factors, but markets had still interpreted it as a sign that the central bank could proceed more gradually with its normalization of monetary conditions after last year’s ultra-loose pro-growth policies.

But the January data also showed that, for all the government’s insistence that banks control their pace of lending, Beijing was still struggling to rein in credit. Banks lent 1.39 trillion yuan ($203.4 billion), the third-largest monthly total on record.

After Friday’s reserve requirement increase, China’s biggest banks will now have to put 16.5 percent of their deposits on hold at the central bank, crimping their ability to lend.

“Even though the inflation threat is mild, the central bank has huge pressures to mop up excessive funds from commercial banks to reduce their urge to extend corporate loans,” Shi Lei, an analyst at Bank of China in Beijing, said.

“But the hike will still not fundamentally tighten liquidity too much and there will be more reserve ratio hikes upcoming,” Shi said.

Each reserve increase drains about 300 billion yuan ($43.9 billion) of liquidity. The Chinese economy remains awash in cash after a record surge of 9.6 trillion yuan in bank lending last year.

($1=6.832 Yuan)

What this means is China just about owns the United States and when they decide they will call all our debts due and U.S.A becomes a third world country over night.

“Many issues are new to us and we haven’t formed a collective opinion about them,” said Zhou, speaking at a conference in Shanghai today. “There are some scholars’ views on those issues but we haven’t reached a consensus at a national level or set any goal.”

Zhou this year has already called for the creation of a new international reserve currency and his central bank blamed the financial crisis on “complacency” and a conviction in the U.S. that markets always correct themselves. China, the only major economy among the top five globally that is still growing, wants the International Monetary Fund reorganized to give developing countries more voice.

“In the past China only dealt with internal adjustments needed to take advantage of opportunities in the world,” said Shanghai-based Andy Xie, former chief Asia economist for Morgan Stanley. “Now China faces the challenge of participating in reorganizing the world. That’s never happened before.”

China needs to think carefully about what it wants, what it stands for, and how it will participate in a remaking of the global financial order, Zhou said.