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    Also Speaking Of China...

    By Michael Maiello on Mon, 12/06/2010 - 2:10pm |

    Robert Reich wrote this in 1991 (edited to get to the point):

    "America may choose another nemesis to replace the Soviet empire....Japan comes immediately to mind....The precise nature of this threat – surely not nuclear annihilation – is never fully explained, but the implication is clear: unless we stop them, the Japanese will eventually control us."

    That's on page 322 of the 1992 Vintage edition of "The Work Of Nations" which I consider to be an indispensible book about globalization.  I read it for the first time last year so I had no experience with it at all back when it was published.  In fact, I'd read "Supercapitalism" a couple of years before I read "Work Of Nations" and though I liked Supercapitalism, especially it's assurance that we absolutely can't depend on for profit corporations to act ethically (it's not in their DNA) I think "Work Of Nations" is a more contemporary and relevant book.

    But when you read it, you kind of have to mentally search and replace all references to Japan with references to China.  Of course, the two countries are not identical but I think the exercise tells you two things:

    1) The structure of our fears.  We tend to fear being put to rest by an outside economic threat.

    2) That it is possible for one of our competitors to grow into a wealth country without severely diminishing life in the U.S.

    Ultimately, and without any particular expertise in China (I specialize in ignorance on the subject) I am very skeptical of a lot of China worry.  I suspect that a lot of people are making money and fame in the book, lecture and investment advice economies by telling a very good tale about the decline of the West and the rise of China.  Fear and catastrophe sell very well in those arenas.  No doubt China is a real and viable competitor, don't get me wrong.  But maybe not the end of the world I keep hearing about...

    Comments

    China is not a threat to the United States, it is much more the other way around. Obviously, if anything that the USA cannot control to its satisfaction is considered a "threat" than China or Iran or, formerly and perhaps in the future, Iraq and of course Cuba and Venezuela are threats. Really, the threat is the USA and its insatiable corporate culture. I think most of us know that. The rest of the world certainly does.

    We need to worry about China, if we insist in blocking its rise to being a co-equal. If we push very hard to control them, they will use our force (capitalism) to defeat us in true Sun Tzu/Taoist fashion.


    by David Seaton on Mon, 12/06/2010 - 2:39pm

    They are and will be a legitimate competitor to us, no doubt.  Just like Germany and Japan and the E.U.  I don't see us being "defeated" by it.  If we're smart it could enrich us at least in some ways.  Keep in mind that even though Goldman Sachs predicts China's economy will be larger than the U.S. economy by around 2030, the per capita economy won't approach outs for decades more.  And that's with very low U.S. growth going forward.  I think there's a lot of room for the U.S. to get smart about building a more vibrant, competitive economy.  The Art of War can work for us too.  Though I don't consider this a war.


    by Michael Maiello on Mon, 12/06/2010 - 3:32pm

    I find it interesting that China is not more of a big story. I think it's because they have not yet spanked us on any sacred benchmark where we have not already been spanked by someone else. For instance, part of what drove the Japan phobia was the supremacy of Toyota over GM and Ford, which had long been the pride of American manufacturing.

    But China will spank us on something emotionally significant sooner or later, and I predict much wailing and gnashing of teeth.


    by Michael Wolraich on Mon, 12/06/2010 - 3:18pm

    Yeah...  You hear all the time about the ways that China does spank us.  I hate to be nice to Thomasd Friedman but I was very amused by the joke in his column: "A cell phone call within China sounds like a call from two blocks away, a cell phone call in the U.S. sounds like a call from China."  But they haven't produced a multinational world class company that's come to beat up on one of our prestige companies.  Well, that's not true necessarily.  One could argue that their energy companies regularly outperform ours.  And we lock them out of deals so they don't do it over here.  But for the most part they're better at building airports and bullet trains than we are.  I kind of wish we'd take that more personally!


    by Michael Maiello on Mon, 12/06/2010 - 3:35pm

    Alas, bullet trains are obviously not a point of American pride. I think that some big Chinese military advance that we don't have would do the trick or if they're GDP outpaces ours or if they start beating us in technology innovation. I don't see any of those happening in the next couple of years, though. I wrote a post about it last year: http://dagblog.com/politics/american-hegemony-what-it-where-it-going-and...

     


    by Michael Wolraich on Mon, 12/06/2010 - 4:48pm

    It seems like a kind of wierd fear to me. I lived, traveled, and worked around East Asia through the nineties and oughties, and the general impression is one of China being perceived as a regional leader more than a regional thug like the US is to some extent for the Americas. Apart from seeking reliable provision of natural resources, they don't have much in the way of imperial ambitions (Tibet and the Taiwan issue notwithstanding). Whereby I mean US-style military bases plonked down in random countries across the globe. And they shy away from interfering in other countries' internal affairs. When you've got a billion and some people to govern, you're not necessarily looking to babysit a bunch more. So I don't see them being remotely interested in being 'competitors' in that sense

    And if the worry is just 'they will surpass the US as the dominant world economy', well that isn't a worry: that's just a fact that's going to become reality in the next ten years (in real - i.e. purchasing power parity - terms). But is it a fact that is worth getting worried about? It's a bit strange to expect a population four times the size of the US to never exceed US production, isn't it? Is it that there some intrinsic threat in the prospect of the world economy being centered on China? Well, it pretty much already is. Is it that there is some threat that Chinese corporations may come to exploit the US, much in the way that now developing countries quiver at the approach of a swaggering Exxon-Mobil executive, or a bloodsucking Citi banker? Well, I can't imagine the Chinese being any worse for Americans than US corporations already are.

    Dunno, I'm just throwing out questions. I don't grasp the nature of the perceived threat itself.


    by Obey on Mon, 12/06/2010 - 3:23pm

    The only thing I think you might have to worry about, as an average citizen is that you'll be on a global market competing with the Chinese for goods and you'll be using a weaker dollar to do it.  So if you and a consumer in China want to fill your tanks with oil from Qatar, they have the advantage of being able to bid up prices with their better currency and you end up paying for it.

    That would be marginally true for the many other oil based products out there, including plastics.

    But then, we've been hollering for a reason to get off the black ooze, haven't we?  I don't think people have considered the extent to which innovators in the U.S., if properly supported, could actually change the rules of the game that we're supposedly trying to win.


    by Michael Maiello on Mon, 12/06/2010 - 3:38pm

    Destor, good point--innovation, rules of the game. I might say "perception" of the game. Maybe our game should be conservation, democracy, enlightenment--what do you know, we might be the best game in town. And it's not that difficult. Mass transit in cities, high speed rail, use of the Great Plains to grow switch grass, education improvement. That's just for starters. Now throw in technical innovation, entertainment(well, not my first choice)and then tourism. Oh, by the way we still make Harleys and Chevies. Maybe Americana will become the rage and my first edition Emily Dickinson will become priceless. Our biggest problem--resistance to change and admission that we're not the "biggest" anymore. Maybe we can become the best at capitalism in a democracy instead of commercialism in a communist country. 


    by Oxy Mora on Mon, 12/06/2010 - 4:11pm

    Yeah!  I forgot one point I wanted to make in my post, it's not original but... although the country is in a sour mood right now, the U.S. is one of the world's only truly global countries.  People still want to come live here.  L.A., New York and D.C. can make claim to being global centers for entertainment, media and policy.  Silicon Valley is still a global technology center.  We're ethnically diverse and so people from all over can come here and find homes and communities.  We also have vast resources and nature.  So, democracy, conservation and enlightenment in the classical sense are big draws for us.  Maybe we need to add to the tired, poor huddled masses that we would also like your curious intellectuals, your philosophers, poets, hackers, geneticists, and mathematicians!

    This is a huge advantage that China, despite having some global cities of its own, can't match and isn't even trying.  Why are we playing their game?  Let them make our toys so long as people want to play with them at our house.


    by Michael Maiello on Mon, 12/06/2010 - 4:37pm

    Around here the big interaction with China is when the local mill closed and the last guy out was the guy supervising loading up all the milling equipment that had been crated for shipment to China. Quite the drama for the local press "Stimpson has been milling here since the 1800's" or whatever.

    I think "end of the world" is a relative situation. In this case, it was prevailing-wage blue collar career jobs replaced by short-term construction and minimum-wage retail; ponzi-economy jobs (most of which never materialized because the real estate markets crashed along with the rest of the economy). For some folks it seems the world sure got a good deal smaller. I can see how from some perspectives China feels quite menacing.

    Of course, that's sort of tangential to my life ... my personal issue with our Asia policy is the H1B situation, and that's not really China at this point.


    by kgb999 on Mon, 12/06/2010 - 3:23pm

    1) The structure of our fears.  We tend to fear being put to rest by an outside economic threat.

    2) That it is possible for one of our competitors to grow into a wealth country without severely diminishing life in the U.S.

    That was precisely what WWII was all about.


    by cmaukonen on Mon, 12/06/2010 - 3:33pm