8 June 2007:

James Fallows on Chinese Manufacturing, in The Atlantic

James Fallows's cover story in the current Atlantic, "China Makes, the World Takes," argues that, for the moment anyway, the growth of China's manufacturing capability is working to everyone's advantage. Cheap Chinese labor presents a lot of American designers and marketers with relatively lucrative opportunities. This may change; as Mr Fallows points out, the Chinese would like to do the designing as well as the manufacturing. For the moment, they seem unlikely to have their wish.

If I were Mr Fallows's editor, I'd have suggested that he begin his piece with his final two paragraphs. These, it seems to me, contain his important thesis, and the article might have been stronger if it had been constructed as an argument. Here is how "China Makes..." ends. ['RMB' - renminbi - is the Chinese currency.]

American complaints about the RMB, about subsidies, and about other Chinese practices have this in common: They assume that the solution to long-term tensions in the trading relationship lies in changes on China’s side. I think that assumption is naive. If the United States is unhappy with the effects of its interaction with China, that’s America’s problem, not China’s. To imagine that the United States can stop China from pursuing its own economic ambitions through nagging, threats, or enticement is to fool ourselves. If a country does not like the terms of its business dealings with the world, it needs to change its own policies, not expect the world to change. China has done just that, to its own benefit—and, up until now, to America’s.

Are we uncomfortable with the America that is being shaped by global economic forces? The inequality? The sense of entitlement for some? Of stifled opportunity for others? The widespread fear that today’s trends—borrowing, consuming, looking inward, using up infrastructure—will make it hard to stay ahead tomorrow, particularly in regard to China? If so, those trends themselves, and the American choices behind them, are what Americans can address. They’re not China’s problem, and they’re not the fault of anyone in Shenzhen.

The answer to each of the questions in the final paragraph ought to be "Yes." Especially the last one. Current trends in borrowing, consuming, and using up infrastructure are manifestly unsustainable. It's only human nature to persist in bad habits so long as it's comfortable to do so, but at least we ought to be thinking about alternatives. And we ought to begin with the axiom that we can solve our problems. We're big and strong enough, for one thing. For another, as Mr Fallows hammers home, our problems are our problems to solve.

Mr Fallows centers his story on an accidental entrepreneur, Irishman Liam Casey. Mr Casey lives in Shenzhen because that's where the action is. But he'd be living in Laguna or Newport Beach if he could. He loved it there. But he couldn't get a green card or a long-term work permit, so he moved on. Mr Fallows notes parenthetically,

I might as well say this in every article I write from overseas: the easier America makes it for talented foreigners to work and study there, the richer, more powerful, and more respected America will be. America's ability to absorb the world's talent is the crucial advantage no other culture can match - as long as America doesn't forfeit this advantage with visa rules written mainly out of fear.

While I am a big believer in the Cold War policy of containment, I think it's time to grow beyond Cold War paranoia - the conviction that this country is surrounded by mortal enemies who labor ceaselessly and secretly to work our undoing. We do have mortal enemies, certainly - every sovereignty does - but it is more intelligent to discredit them than to humiliate ourselves with jumpy overreactions to exaggerated notions of their strength. The Cold War mentality wants to have things both ways, positing a United States that is at the same time mighty and defenseless. The feeling of defenselessness is a sign of our national infantility, as is any expectation that our dissatisfactions with Chinese-American trade is somehow China's problem to fix.

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