I'm a big James Surowiecki fan. (Not a Truly Handsome Man yet, like I am, but don't you think his barber is starting to get creative?)
When I got into journalism, nearly three decades ago, I harbored a secret dream of writing for The New Yorker. I never got a sniff. But I harbor no grudges because Surowiecki did. And he's run with it.
All this praise, naturally, is a prelude to my taking issue with his latest column, which covers the subject of the collapsing dollar, the subtext for my novel The Chinese Century.
The headline his editors give the piece is "In Yuan We Trust." His point is that our debts to Japan and China are so massive neither can afford to end their support for us. Thus the air will go out of our financial balloon slowly. We won't know the dollar's a peso until it's reached par. He concludes, "So be afraid. Just don’t be very afraid."
That's the part I take issue with.
First, if he's right and the dollar falls gradually we should still be afraid, even angry, over the disappearance of our influence in the world. (That's the Bank of China building over there to the right.)
Second, it's already apparent that China is using its new economic power in brutal political ways.
Take for instance the "protests" the government has ginned up to keep Japan out of a permanent place on the UN Security Council. The protests aren't covered within China, they're not very genuine, and Prime Minister Wen Jiabao's efforts to take advantage of them have been ham-handed.
Of course, other tyrannies have also been ham-handed in their demands for new power. That doesn't mean it didn't work.
All this matters precisely because of the facts Surowiecki brings out in his column. Together Japan and China control our debt. Japan wants the U.S. to support its ambitions as a counterweight to China. China's actions are not just a threat to Japan, but a threat to the U.S. that we had better stay out of it.
China's moves toward Taiwan are even more threatening. Just as Japan is our political bulwark against Chinese domination of Asia, so Taiwan is our economic bulwark. Between them Taiwan and China control most of our semiconductor supply, along with our high-tech assembly operations.
Notice how quiet the U.S. has been over both these issues? Just because an opponent is pushing you softly doesn't mean they're not pushing you out.
If Japan is marginalized then China controls East Asia absolutely. If Taiwan is absorbed then China controls the high-tech economy.
And they already control the fate of our currency.
We should be more than very afraid. We should be mad as hell. Mad as hell at our leaders and at ourselves. As I noted in my novel the Chinese can squash us like a bug and effectively kill our democracy simply by selling our currency. And the situation is getting worse daily.
By the time we awaken to the threat we're likely to be dead.
It's something we should be afraid of, very afraid.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. steve pan on April 13, 2005 11:11 AM writes...
do you really know what should be afraid of?
I guess you neeed go take a visit to asia to know more. Maybe you are too young to grasp the whole history
Japan is Nazi Hitler's Ally in WW II. It invaded China, Korea, Indonesia, extending to Malaya, Thailand, and Burma. And then it attacked Pearl Harbor, declaring the war with USA. (USA then dropped 2 atomic bombs onto Japan to end the war)
Japan killed tens of millions of cilivian people in WWII
It forced tens of thousands of Chinese, Taiwanese, Korean women into war sex slaves serving their cruel, ugly army.
It used live civilians human beings bodies as biochemical experiment specimen.
Germany has apologized to Jews and other people for its wrongdoings and regreted.
Permalink to CommentYet Japan never did. Instead, it glorifies the history and worship the war criminals annually.
Now it wants to be a permanent memeber of UN Security Council. Will the world be more secure under Japan's leadership?
2. Ray Maier on April 13, 2005 03:59 PM writes...
Interesting stuff to think about for the future...
Permalink to Comment3. Lindon on April 14, 2005 12:27 AM writes...
Right...now your wrong. Very wrong.
You say:'Take for instance the "protests" the government has ginned up to keep Japan out of a permanent place on the UN Security Council.'
and:'First, if he's right and the dollar falls gradually we should still be afraid, even angry, over the disappearance of our influence in the world.'
Clearly you deserve to have lost your influence, for I can think of no better example of the general ignorance of world opinion that is endemic in US citizens than that expressed in the first quote above.
Have you met and spent ANY time with chinese people? I'm aghast at your ignorance of their feelings towards the Japanese. Almost every meek and mild mannered chinese person(of which there are many here in Australia) that I've met becomes a veherment crusader at the mention of Japan. In the pre-war(pre-1940)years the japanese committed mass-population attrocities in China that's MASS-POPULATION, as in many 100's of K's of people. I assure you my experience(3rd hand as it is) afirms that the chinese government would have needed to do NOTHING to get the level of protest they did, in fact there would be little they could do to stop these protests, and they(and I) may be surprised at how restrained they were....there will be more and much bigger protests if the japanese ever got on to the council.
In fact I would suggest there is a small risk that such an election would force the chinese out of the UN (popular opinion does count in china when its 2 billon with the same opinion), thus effectively ex-communicating the UN from real world affairs for good. Your milage clearly varies.
Permalink to Comment4. john on April 15, 2005 01:48 PM writes...
The guy who runs the laundromat down the street from my apartment in san francisco grew up during the Japanese occupation of China. Once he pulled me aside and said he had to talk to someone because he was having nightmares again. Old memories of the Japanese soldiers tossing Chinese babies up in the air and then chopping them in half with samurai swords as they came falling down. Huge numbers of resistance fighters armed with ancient muskets being mowed down by Japanese machine guns. People being tortured then hung from posts all over the village. And of course the Chinese were starving, while the Japanese were feasting on all the available food. He remembers his knees swelling up to the size of cantalopes while his legs became nothing but skin and bone. His health never fully recovered. After he finished unloading, he thanked me for listening then went back to folding laundry. Quite a story.
Permalink to Comment5. Tom Mariner on April 22, 2005 04:35 PM writes...
As always, you are right on track.
I just put a Chinese technical delegation on a plane back to Shanghai after visiting with us for a month. I found them very likeable and, at least technically, "American". They disagreed with my assessment that there was much commonality between our two cultures. I told them they are much like Americans of the early Twentieth Century -- honoring technologists and sure of their ability to invent their way out of or into any situation.
Your absolutely correct thesis that the Asian part of the world dangerously holds our IOU's begs the question of how they came to hold our paper. It is simply because they are developing a culture that builds what we want and we are morphing into a people that are rewarded for producing nothing of value to anyone outside our borders. How much of an overseas market do think there is for the ability to interpret the laws of this land? Or proficiency in government?
The Chinese (and their neighbors) would be quaking in their boots over the prospect of competing against the US of years past. Now we alternate in their minds as ideological enemies and great customers.
I'm worried and your mention of the Eastern monopoly on semiconductors makes me very afraid. Not only are most of our production facilites East of San Francisco, but we have forgotten how to build them here! Do I blame our leaders -- Oh Yeah -- from both parties an all branches and levels of government. And I blame us techies for not throwing open our windows and shouting "I'm mad as hell and I'm not going to take it any more!"
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