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U.S. financial markets haven’t been the only case of volatility in the world recently. Just look at the American economic and financial establishment’s broad conventional wisdom about China. Between its mysterious but apparently slowing economy, and its leaders’ erratic reactions over the last few weeks, the PRC has been at or near the center of the investment turmoil. Therefore, maybe it’s not surprising that hitherto prevailing assumptions about a dawning Chinese Century or epoch are being rethought dramatically. But it’s especially important that U.S. political leaders not succumb to the kind of fallacies that have muddled their dealings with Japan for decades.

As followers of international and business news are endlessly reminded, during the 1980s and into the mid-1990s, many American analysts were convinced that Japan’s growing prowess and wealth could enable it to challenge U.S. global predominance in finance, technology, and even overall economic power. Almost immediately afterwards, of course, Japan ran into major problems on all those fronts, and those claims – along with calls for the United States to emulate many Japanese policies and practices – were quickly dismissed as quintessential alarmism. Views of China could well start moving along the same trajectory.

What has largely been missed about Japan, however, is that what always mattered to America for the foreseeable future was not whether Japan would become “Number One” or not. First of all, no one’s crystal ball is good enough to know and second, that’s largely because, barring “shock” events like wars, these kinds of shifts usually unfold over very long time periods. Instead, what has always mattered most has been that regardless of Japan’s overall power versus America’s, it has gained enough specific strengths to be able to pose major ongoing problems for the U.S. economy.

Notably, Japanese industry has gained global leadership in a variety of advanced manufacturing sectors ranging from automotive to information technology components. Because such components are so crucial to manufacturing competitiveness, this means that Japan’s global rivals, including in America, depend heavily on Japanese businesses for key supplies – as was illustrated dramatically after the Fukushima earthquake struck in 2011.

Since Japan is still the world’s third largest national economy, its longstanding protectionist trade and anti-competitive business practices deny U.S.-based producers access both to a potentially huge foreign market and to domestic American customers they would be servicing if bilateral trade was not distorted by Tokyo’s decisions. These lost markets, in turn, mean not only lost profits but lost advantages of scale for U.S. producers and their employees. And undoubtedly Japan has been able to continue posing these problems because American confidence in its demise has persuaded U.S. leaders that it no longer deserves urgent attention.

Unlike Japan, China is not a quasi-ally of the United States – and often challenges American security interests. So it’s even more important that U.S. assessments of the PRC focus on the essentials, as opposed to “Chinese Century” claims or “Whither China” debates. There is one important exception. The suddenness of the Soviet Union’s demise demonstrated how fragile even global behemoths can be, especially when ruled by intrinsically brittle dictatorial systems. It’s not necessary to believe that China is facing a “1990 moment” to recognize that the regime’s survival could before too long be mortally threatened by any number of economic, political, and even environmental setbacks. In fact, it’s a sign of China’s current predicament that more and more commentary is going out of its way to note that some kind of collapse isn’t imminent.

But this speculation aside, what we can and do know about China is that its own advanced manufacturing industries are rapidly gaining on America’s; that its dumping of steel and other industrial products can harm U.S.-based producers for reasons having nothing to do with free trade; that it continues to steal valuable American intellectual property, which kneecaps the sales and all of their commercial benefits for American producers; and that it can marshal enough wherewithal to (a) finance investments in the United States that are both strategically and economically important, especially in the tech sector, and (b) seed the creation and foster the ramp-up of numerous high value industries.

Militarily, China has emerged as a major threat to America’s cyber-security – and possibly, as a top American military official recently suggested, a “peer competitor.” And although its more conventional military forces are doubtless far from matching U.S. global capabilities, some of its own strategists believe in a doctrine called “asymmetric warfare.” This school of thought suggests that China can prevail in regional conflicts in Asia by exploiting specific vulnerabilities against American forces even though the latter enjoy overall superiority.

China has become so big and important that I certainly hope someone important in Washington is thinking through the implications for America of large-scale upheaval in China, or worse (and of continued rapid Chinese progress). But the preeminent challenges America faces from China are much more immediate and concrete, and they should be policymakers’ first and foremost concerns. Nonetheless, I can think of one way in which the recent spate of bad news from China could significantly improve America’s approach – if it reminds Washington that the United States has always held the main cards in this bilateral relationship.