"When you have the money--and "you" are a big, economically and culturally vital nation--you get more than just a higher standard of living for your citizens. You get power and influence, and a much-enhanced ability to act out. When the money drains out, you can maintain the edge in living standards of your citizens for a considerable time (as long as others are willing to hold your growing debts and pile interest payments on top). But you lose power, especially the power to ignore others, quite quickly--though, hopefully, in quiet, nonconfrontational ways. An you lose influence--the ability to have your wishes, ideas, and folkways willingly accepted, eagerly copied, and absorbed into daily life by others. As with good parenting, you hope that by the time this happens those ideas and ways have been so thoroughly integrated that they have become part of what is normal and regular abroad as well as at home; sometimes, of course, they don't. In either case, the end is inevitable: you must become, recognize that you have become, and act like a normal country. For America, this will be a shock: American has not been a normal country for a long, long time..."
China is the largest foreign holder of our debt and they are quickly moving toward a point where they will not buy any more if it. Here we have a deputy governor of China's central bank explaining the situation. The US is buying less stuff so our creditors have less money to lend back to us. As the DeLong quote points out, the lifestyle of American citizens depends very much on our ability to create debt. We are at a point where China basically holds all the cards but does not hold the grandiose ideas America has always had. China does not care about being a peace keeping nation. China does not care about spreading its culture or its system of government around the world (something new for a superpower, it seems). However, China will act (as I noted in the comment to Channing's post) to protect its own power.
What that all means? I'm not really sure yet. US foreign policy in the past century was largely driven by two factors: Containment and Oil (or maybe just resources - natural and labor - in general). When we weren't opposing the spread of Communism, we were ensuring the adequate flow of oil for our ever-growing economy. China doesn't seem too interested on spreading Communism or fighting Democracy but it does need resources. We've seen it hesitant to pressure Sudan over the Darfur situation because Sudan supplies China with oil. Perhaps a good parallel for Modern China is Imperial Japan. The country was quick to modernize and its aggressive spread across Asia and the Pacific was largely an effort to secure the resources necessary to run its empire.
There are a few problems with this comparison of course. I do not see any similar ultra-nationalistic streak in China. Nor do I see a move toward militarism. The World of China's rising power is far different from the world of Imperial Japan's. One big change is the advent of neo-liberal Economics. Free trade (and the small wars/revolutions and other covert actions required to maintain it) precludes expansionist policies. Why invade and occupy a country over resources when you can just buy the resources up front? This is pretty much why the colonial system collapsed - not because of revolution or social movements, but because actually owning the land where the resources are located became unnecessary. In the world of China's rising power, China does not need to maintain an Empire. It needs to maintain beneficial trade arrangements. Whether these will be true "free trade" arrangements or more slanted forms of trade remains to be seen.
I want to link the article I put in the comments again because I think it gives a very interesting/post-modern/pessimistic view of how international affairs will run in the near future.
