The Wall Street Journal features China as a challenger to the United States in two articles today. The first (appearing on page A2 of the print version) compares and contrasts the Chinese surge to that coming from Japan two decades ago.
The frenzy in Congress stirred by Chinese oil company Cnooc Ltd.'s bid for Unocal Corp. of California harks back to a period of similar hand-wringing over Asian power. That came in the 1980s with Sony Corp.'s purchase of Columbia Pictures Entertainment Inc. and, more broadly, Japan's increasing economic presence in the U.S.
The interesting distinctions appear to be drawn between strategic political interests and private economic interests:
Above all, Japan was then, and remains, a U.S. ally. Japan depended on the U.S. for help on defense, with U.S. military bases throughout Japan and an American-written "peace constitution" restricting Japan's Self-Defense Force. There were limits on how far economic tensions could ripple. China has no similar ties to, or dependence on, the U.S...
The article claims, however, that the opposite dynamics apply to private sector relations:
While U.S. executives often had little stake in keeping tension with Japan in check, today the huge flow of investment to China from the rest of the world, including the U.S. -- running at about $89 billion a year -- is a form of diplomacy that keeps the two nations in a sometimes uneasy commercial embrace. That is because "China had a totally different development model than Japan had," one based on actively encouraging foreign capital, says David Hale, head of Chicago consultants Hale Advisors. (The $89 billion includes about $34 billion into Hong Kong.)...
Tokyo did carve out a modest oil diplomacy in the 1970s and 1980s, curbing trade with Israel, for example, to ease tensions with Arab states and stepping up trading with smaller suppliers in the Persian Gulf to gain more leverage. By and large, it followed American diplomacy -- and enjoyed the assurance of U.S. military muscle to keep supply lines open.
China, however, "is a potential security rival to the U.S., or at least a potential counterpart in conflicts in Asia," says Adam Posen, senior fellow at the Institute for International Economics in Washington. So Beijing "feels it cannot rely on U.S. relationships to guarantee flow of oil -- quite the opposite," he adds. And Chinese oil diplomacy is creating rifts with the U.S. in flashpoints throughout the world, particularly as China seeks closer ties with U.S. foes in Venezuela and Iran.
The second article (appearing on page B1 of the print version) continues the theme:
Many in Congress and the Pentagon think it may hasten an inevitable clash between the U.S. and China for economic and political leadership in the world. Many businessmen and academics, however, think China's growing wealth and international economic ties will make it more democratic and a force for global stability. Both have history on their side.
A familiar name checks in with his opinion:
Brad DeLong, an economic historian at the University of California at Berkeley, sees a useful parallel in Britain's policy toward the emerging industrial colossus of the United States in the 19th century.
As late as the 1840s, he notes, the U.S. and Britain -- then the world's sole superpower -- came close to war over territorial disputes in the Pacific Northwest and the lucrative fur trade there. But in subsequent decades Britain chose to accommodate, rather than suppress, the U.S. By 1900, the notion of conflict was widely regarded "as silly, simply because the trade and economic connections were so tight and the political systems so compatible," Mr. DeLong said.
Similarly, he argues the world will be safer if the Chinese in time see the U.S. as having aided, rather than hampered, their economic development.
Others are not so sure:
"There is no deterministic relation" between economic advance and war or peace, said Charles Maier, a Harvard University historian. Katherine Barbieri, a political scientist at the University of South Carolina, has found that countries that trade more with each other are actually more likely to fight, in part because deeper relationships generate more things to fight about. "Trade generates wealth but...certain countries may take that wealth and direct it to military purposes," she said. "We're giving China the power to build a very strong military."
Again the rift between purely economic and purely geopolitical perspectives:
The widely differing views of China were vividly evident in 2001 when military and Wall Street officials came together at the World Trade Center in New York to share thoughts on the impact of China's economic and military rise. The organizer, Thomas Barnett, then a teacher at the U.S. Naval War College, hoped to bring the two constituencies closer together. Instead, their opposing views were reinforced.
Mr. Barnett, now a writer and consultant, says the Wall Street participants concluded, "'When I think of the security issues I realize how a strategic partnership with China is all the more imperative,' and the military guys would say, 'Wow, realizing all the economic competition, war with China is that much more inevitable.' "
The article ends with these less than comforting thoughts:
History suggests that while economic engagement helps prevent conflict between countries, by itself it isn't enough. During the 1920s, Japan had low import tariffs and its democratic, civilian government encouraged domestic alliances with European and American companies to hasten Japan's technological catch-up, said Hideaki Miyajima, a Japanese economic historian at Waseda University in Tokyo and a visiting scholar at Harvard. General Motors Corp. and Ford Motor Co. operated Japan's only major automobile assembly plants. The heads of Japan's "zaibatsu" -- urban industrial conglomerates -- were pro-Western. Many sent their children to U.S. universities.
But these pro-Western elites were too weak to resist the forces of militarism and imperial expansion. Mr. Miyajima said the Depression fell disproportionately on Japan's large agricultural population, which was the military's power base. It increased economic inequality and fueled resentment of the traditional business elite.
... In 1910, Norman Angell, a British economist, wrote in "The Great Illusion" that Europe's great powers had become so economically interdependent that war was unthinkable. Harvard's Mr. Maier says the hypothesis was plausible. Britain's old-line industrial elites saw Germany as a threat, while its emerging financial elites saw it as an opportunity. Within Germany, Ruhr-based heavy industry favored the army buildup and were more willing to risk conflict with Britain, while Hamburg-based trading interests were more pro-British, though supportive of the German fleet buildup.
British-Germany naval rivalry didn't lead to war itself, says Mr. Maier; rather, entangling alliances between Germany and Austria-Hungary on one hand and Britain and Russia on the other, were a more proximate cause.