China Inc.

21st Century

There has been a lot of coverage in the media over the last two years about the threat posed to the U.S. economy by the growing economic strength of China. There is talk about how China is causing American workers to lose their jobs because Chineseproducts are cheaper. President Bush is bringing up the issue of China seeking to gain a competitive advantage by undervaluing their currency, using government subsidies and other unfair trade practices. Policymakers wring their hands over the threat posed by China. When a Chinese state-owned company wanted to buy UNOCAL, an American petroleum company, their was an outcry about how this posed a threat to U.S. security and needed to be examined by a government entity responsible for scrutinizing foreign investments in the U.S. Books like the one below are being written about the Chinese economic threat.

20th Century

In the 1980s, U.S. policymakers wring their hands and corporate executives shake as Japan's economic might appears to be taking over the U.S. economy. Japanese automakers are threatening the market dominance of U.S. automakers. All manufacturing sectors of the economy appear to be threatened and American workers thrown out into the street by cheaper and better Japanese products. Japan is accused of unfair trade practices and their investments in the U.S. are coming under growing scrutiny. Books are being written about the economic threat by Japan.

Recent concerns about the economic threat posed by China bear an eerie resemblance to those expressed about Japan almost 20 years ago. I expect books will be written analyzing the Chinese competitive threat and thinktanks will produce white papers about the subject just like was done when fears about Japan's economic dominance were paramount. There has been little discussion in the media comparing the two situations. The U.S. seems to suffer from chronic collective amnesia. Everytime a political, military or economic threat appears to threaten America, we act as though this was the first time something like this has happened. Likewise, once the Soviet Union and Communism was the BIG threat. Now Islamic fundamentalism is the BIG threat. Perhaps the U.S. could act or react more effectively to world events if policymakers remembered the old adage that "nothing is new under the sun."