SHANGHAI, China -- When viewed from here, there is something incredibly off-base about the debate on China going on in the United States today. The best parallel I can think of is the debate in America about Japan a decade ago.
The debate about Japan was essentially between two schools. The "Honda school" argued that the Japanese had basically found the secret to endless economic success -- from just-in-time inventory to team manufacturing -- and the only thing for America to do was to emulate the Japanese model and accommodate them as best we could.The "Gen. Douglas MacArthur" school argued that the Japanese may have found the secret of success but they had rigged the game by closing off their markets to others, and the right policy was to beat down their walls and contain their rising economic power.
There was only one school missing from this Japan debate: the one arguing that Japan's system was deeply flawed, that while it had a few cutting-edge global companies, the rest of its economy resembled state-owned communist factories, and that the Japanese wizardry for making a lot of the same thing well would no longer be an advantage in the information age, where innovation is happening much faster and everyone wants something different, tailored just for him.
Therefore, Japan's economy would slow to a crawl in the 1990s, and the biggest problem we would have with Japan would be managing its weakness.
In other words, the only school missing from the debate on Japan was the one that reflected reality. The same is true now for China.
There are essentially two schools in the China debate. One school says just trade with China and everything will turn out fine, as China naturally prospers. The other school argues that China will grow stronger and more authoritarian at the same time and therefore it must be contained and tamed now by U.S. power before it's too late.
Time will prove both these schools off the mark. I believe the key problem we will face with China over the next decade will be managing its weakness. China may grow richer, and it may grow more authoritarian, but it's not going to do both at the same time.
In the long run China cannot get where it wants to go, in terms of higher living standards, without a radical political and economic restructuring. It will not be able to cure the 40 percent of its economy that is bankrupt banks and factories without more rule of law, more global integration and investment, and more democratization.
China cannot get from here to there with its current corruption-laden, one-party system, and moving away from that system is going to involve some wrenching changes and internal strains. (See dictionary for Thailand, Korea and Indonesia.)
We debate about China as though President Jiang Zemin woke up every morning and said, "Hey, where can I threaten America today?" Nonsense. Jiang wakes up every morning and says to his aides: "What? Our unemployment level is now 101 million? But yesterday you told me it was only 100 million." That's what he's focused on because that's what can kill him and his party -- not American power.
Managing China's weakness -- and the turmoil it could spew out of here -- when China's current system hits the limits of its adaptability could turn out to be an all-consuming task for U.S. foreign policy as well.
It's ironic how perceptions of the old Soviet Union now color U.S.-China relations. U.S. conservatives look at China today and see the 1960s Soviet Union of Sputnik, Khrushchev and a rising communist power; Chinese intellectuals look at China today and worry about the 1990s Soviet Union of mafiosi and social collapse.
"Forgive me for my directness," Yang Jiemian, an expert at Shanghai's Institute for International Studies, said to me, "but I have seen what happened to the former Soviet Union. The lesson is: If conditions are not prepared, and we change our system too quickly, there will be great social disorder and civil war and the Americans will not come to our rescue."
Let's have a division of labor: You worry that China is a car about to run us off the road. I'll worry that it's a car with 1.3 billion people going 80 miles an hour toward a speed bump, with wheels that could come off at any moment.
New York Times News Service