Stephen King: The US and China have a lot to learn from Arsène Wenger

It seems that football teams have become the living embodiment of globalisation

So who would he choose from Arsenal's stars? If he was at last week's match, Sven could think about Henry, Flamini or Pires (French), Toure or Eboue (Ivorian), Bergkamp or Van Persie (Dutch), Senderos (Swiss), Silva (Brazilian), Fabregas (Spanish), Ljungberg (Swedish), Hleb (Belorussian) or Lehmann (German). An embarrasse de riches indeed: French players, French-speaking players, a few other non-English nationalities and a French manager. Judged by playing staff alone, Real Madrid, with David Beckham and Jonathan Woodgate, is more English than Arsenal.

Soccer teams these days are the living embodiment of globalisation. We don't mind that the players at our favourite club aren't English: what matters is that the club wins. It may be that the playing field is not always as level as it might be - there aren't enough Roman Abramoviches to go around - but few Arsenal fans are likely to be disappointed should Arsène Wenger's men lift the Champions' League trophy.

Those Arsenal fans who also happen to be English - the vast majority, I assume - will soon find themselves with divided loyalties. On 20 June, when England play Sweden, most fans will be hoping John Terry makes the smart tackle to prevent Freddie Ljungberg from breaching the English defences: Arsenal fans will be supporting the Chelsea player at the Arsenal star's expense.

We all have these divided loyalties. And divided loyalties make it difficult at times to reach the right decision. Globalisation has changed the ways in which we think about the beautiful game: clubs these days have to attract the world's best players, not just the best players from a single country. Most of us have few problems with this idea.

In other spheres of life, we have difficulty with globalisation. When it comes to economic policy, countries sometimes cannot agree on the right approach: they protect their own at the expense of the greater good.

It was probably asking too much to see anything of great significance emerge from President Hu Jintao's trip to Washington last week. Mr Hu spent more of his time with American business leaders than with George Bush and his Washington colleagues. That, in itself, reveals the overriding importance of the growing economic relationship between the two superpowers. But this relationship is upsetting a lot of US politicians: they regard China less as an economic partner and more as a threat.

Many political leaders, for example, are happy to point the finger at China as the underlying cause of America's ever-increasing trade deficit. Their view is simple: good US manufacturing jobs are being lost to low-cost operations in China. To prove this, they highlight, first, America's bilateral trade deficit with China, second, China's increased share of American imports and, third, the decline in manufacturing activity within the American economy.

As with many political arguments, hyperbole seems to get in the way of the facts. China may have increased its share of US imports, but these gains have been mostly at the expense of other nations exporting to the US. China's bilateral trade surplus with the US may have gone up in recent years, but this partly reflects China's growing role as the world's assembly base.

Thirty years ago, Japanese companies would export directly to the US: now, they're more likely to send their exports to China for final assembly before being shipped off to America. The effect? Japan's bilateral trade surplus with the US ends up lower, China's ends up higher, but it's difficult to argue that the US has lost out from this process. Meanwhile, the share of manufacturing in US economic activity has been falling for decades.

There's no doubt that China has contributed to America's larger current account deficit. But to single China out as public enemy No 1 seems strange. An easy way to show this is through the surplus countries that act as the counterparts to America's current account deficit. After all, for every increase in the US current account deficit, there has to be an increase in the rest of the world's current account surplus: the great thing about accounting is that everything has to add up.

While China's current account surplus has increased, the biggest increases have been in the Middle East and Germany. Russia is not as big a country as China, but the dollar increase in its current account surplus has matched China's. Japan's surplus, meanwhile, was big in the first place and is still big.

But China is an easier target than the Middle East or Russia. They've got oil so they're treated with kid gloves. China is a threat to the US not so much because of its manufacturing capabilities but because it competes with the US for access to scarce raw materials. And, because the US and China have huge appetites for energy, both countries have a strategic interest in securing supplies from sometimes dodgy regimes.

It's important to recognisethese competing demands for energy are, in many ways, not really competing at all. The US and China have seen a fusion of economic interests over the past 30 years. Politically, they may be strange bedfellows but, economically, they have become increasingly dependent on one another. The combination of US capital and Chinese labour has led to huge increases in global output which have made many goods and services cheaper.

A failure to recognise this team effort would have unfortunate consequences for the world economy. Attempts to prise apart US and Chinese economic interests would be damaging for both sides. Separation would be a mistake. In Arsenal's case, Mr Wenger's job is, in part, to ensure that his multinationalplayers talk to one another: perhaps we need stronger multilateral institutions to ensure good communications between America and China.

Stephen King is managing director of economics at HSBC

stephenking@hsbcib.com