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It's not for nothing that the magazine is called Spiegel (Mirror). Projection and scapegoating alleviate a host of ills.

Our company was seriously looking into China and we do some trade (exports) with them. But China is a very boggy ground to tread on: they have a truly byzantine bureaucracy, demand contracts only they fully understand and seem to have a limited interest in foreign companies actually making real profits in China.

Yes what goes on in China is amazing. Visit Shanghai and you find an exuberant optimism of "can do" that could make Americans blush. But a lot of the gold is glitter. It's easy to be robbed blind in China: the cheap copycat mentality has ruined quite a few German investors when they found out that the Chinese did not buy the product but the know how to make them.

Most places in regional China are still bitterly poor. And what has been most astonishing: Chinese labor is so cheap but they still rationalize. Thee is an emerging urban proletariat of jobless people and they are a bigger risk than the peasants who have always been poor. China will face huge problems in the next decade and of course energy bottlenecks will further damage growth.

We have scaled back business with China while business with the U.S. is up.

The wild card is the upcoming global energy crisis.

Today on Morgenmagazin there was a German Journalist reporting about Nagasaki. The Moderator asked him, what the Japanese think about the atomic bombing and he answered that there is a new attitude growing, that people think critical about their "peace" attitude, that they worry about North Korea and China and think they should build a stronger military. The moderator did not expect this answer!

What China has not experienced yet is the inevitable periods of low or no economic growth. I wonder how a totalitarian society will cope with a recession.

Well, go to a library, fetch some 20 year old Spiegel copies: you'll find the same stuff written with regard to Japan...

@Querdenker

Furthermore, should China ever hiccup or slip, or even become a democracy, there is a good chance that it could split up into several different countries. The rich ones being on the coast and the poor ones in-land. This could lead to strife, uprisings or even war. There is such a huge schism forming between the haves and have-nots that conflict almost seems inevidable.

To grow rich is a good thing.

I am old enough to remember the same fears playing out in the 1980s. Back then, Japan was set to take over the world, and the lefty Euros were pleased to see that America was doomed. The Japanese were positively full of themselves, much as the Chinese (and usual America-haters) are today.

In 1989, the best seller in Japan was "A Japan that Can Say No", written by Akio Morita and Shintaro Ishihara. Morita was the Chairman of Sony. An English-language translation is found here:

http://home.earthlink.net/~rufusis/japanno/

What is interesting are the editorial comments made by the translator, in 1990.

Here's my favorite chapter:
"America Will Never Hold Its World Leadership Position Unless It Ends Its Racial Prejudice"
http://home.earthlink.net/~rufusis/japanno/part03.html

This, from one of the most racist, monocultural societies on the face of the planet.

Can someone tell me the recent inventions of Chinese companies? What whole new industries have they created? Who are the Chinese who've won the Nobel Prize with their research done in China and not in the US? How many people are learning Chinese outside of China? Who have the Chinese military liberated? What contributions has China recently made to world civilization?

Then answer these questions for the US. What did you come up with?

China will begin a demographic transition from a young to an aged society within the next 10-15 years. Those boasting of a China triumphant never take this simple fact into account. India will have a larger, younger population than China by the middle of the next decade. I'm sure in 30 years, Der Speigel will be writing about how India will be the next superpower....

There are other burgeoning nations as well with large populations fueling their upward march. The author should look to India as a nation likely better suited to reap rewards in the long run. But, India does not have the same adversarial relationship with the US so, it wouldn't further the Agenda.

As for China, be careful what you wish for, it may come true. Does the author consider whether an predominant China would be a good thing for the rest of the world? Their record on the environment is abysmal (they are not even participants in the process to reach global climate accords), as is their support for despots and other bad guys across the globe. It is pretty well established that they gave Pakistan the Bomb (as a counter to India, whom they fear). To whom else are they giving the means to trigger a global holocaust?

The US has been top dog for a long time but, it is nowhere written that we will remain so for the indefinite future. The rest of the world needs to soberly consider the real-world consequences of the potential eclipse of US power, and whether it is in their own long term best interests.

Finally, it takes a lot of nerve for a fellow in a nation of double digit unemployment and general stagnation to write of ours as "weary" and in "self-doubt". The majority of Americans have no such emotional baggage.

Der Spiegel needs China as it is clear that it isn't going to be the EU.

Although many of the above observations are right on I would like to add my two-cents regarding China. Much of China's current success is directly related to foreign investment throughout the 80's and early 90's through so called "joint-ventures". Ironically many of these ventures are not owned by private Chinese companies but rather the "State", therefore is it still far from being a free market economy driven by innovative entrepreneurs – something needed for continued long term success. Plus its economy is driven primarily by cheap manufacturing and not innovation – this too needed for long term success. Patents are not enforced and many lack what I would have to term “basic (traditional) business skills”. China is very much a one dimensional economy which is not a long term recipe for success. If you have every done a contract with a Chinese company my recommendation is to have each and every paragraph initialed or signed off and always keep a copy with you. Disputes will come up, far more than normal business relationships, so you better have documentation handy that backs up your position. (This tip I receive from by father who did twenty years worth of work in China for a very large multi-national. They learned the hard way.) The Chinese are eager to learn, ironically learn to copy and not innovate which will be their Achilles tendon. And although China has made many improvements to its energy infrastructure this too could put a damper on its future growth. It too relies very heavily on oil. Yes the metropolitan cities are very impressive with new construction everywhere but venture out and you’ll find a country that lags in turn of the century people and economy everywhere. There too is much discontent with the many “have nots” and the very few “haves”. Just wait for the “have nots” to want more of the success piece of pie and things will change in China. Yes China could be an economic power house, but in reality their economy is not diverse enough to really make that next big step. This is not discounting that they could, but the foundations for those next big steps are not their and there is a large reluctance on business (government’s) part to do so. Most of my time is more on educating on versus actual business. Such as being realistic about the cost of a hotel in Century City (next to Beverly Hills). Where they want to spend $50 dollars a night I have to explain that it will be more like $250. Whereas they would like to acquire a small company for $10 million it will be more like $100 million. It is somewhat difficult to explain “multiples” and “valuations” or that fact they will have to deal with “unions”. This perhaps, “unions” is really an eye opener. Right now China’s economy is almost too perfect. They have not, as mentioned, been hit with recession, labor woes or any real success outside their country. It is manufacturing all day, every day. They will stumble. Then the world will see first hand how successful and resourceful their economy really is or not.

Any kernels of truth in the Speigel piece were smothered by layers of wishful thinking and projection on the part of the authors.

China may or may not eclipse the U.S. some day. But any nation that still receives foreign aid, shoulders no serious international responsibilities and sells its orphans to foreigners -- yet somehow finds money for space shots, nukes and Olympic gold medal programs -- cannot yet be labeled a superpower, despite all the media hype.

And how many of these puff pieces are bought and paid for, anyway? After the Cold War, we learned the extent of Soviet involvement in the anti-war, anti-nuke and anti-American movements, and its manipulation of Western public opinion. I will not be surprised to learn that some of the vicious anti-American bigotry spewing from the pages of elite and state-controlled media these past few years was subsidized.

I will not be surprised to learn that some of the vicious anti-American bigotry spewing from the pages of elite and state-controlled media these past few years was subsidized.

Very possible. Following the "mishap" with the "accidental" bombing of the Chinese embassy in Belgrade during the NATO bombing to stop Serbian agression in Kosovo : China paid poor people to protest and throw paint bombs at the US embassy.

P.S. And while the global effort at de-legitimizing and deconstructing U.S. leadership and authority continues apace, consider a world dominated by those who are enabling genocide in client state Sudan and subsidizing Bobby Mugabe's Pol Pot-inspired ‘Year Zero’ redux in Zimbabwe.

All the faux outrage and shallow moral equivalency parlor debates over America's relative misdemeanors will be rendered insignificant the first time a nation criticizing Beijing is punished with economic retaliation -- like withholding lucrative contracts or the equivalent of 'union trouble' at the its factories in China -- something critics of the American 'hegemon' needn't worry about.

Good point, James.

Chinese university students have learned nothing since the Cultural Revolution, when they were routinely manipulated for political gain, then exiled to the countryside to cool off.

I recall Tony Blair being ambushed with a question posed by a "journalism student" at a university in Beijing. Something about "blood on his hands" following the invasion of Iraq. Aside from the fact that Chinese leaders visiting the West are fawned over like delicate porcelain dolls and would never be asked such an uncomfortable question, I wondered precisely what a "journalism student" actually studied in a police state with no freedom of speech or freedom of the press. My guess would be how to use the West's press freedoms to assault it.

Same goes for all those Xinhua "journalists" firing questions at American brass during Centcom briefings on the invasion of Iraq -- questions they'd never be allowed to ask their own leaders, and wouldn't dare if they were offered the chance.

@LouMinatti: very good point, I'm also old enough to remember well how Japan was set to take over the world in the 1980's - - to get a feeling of the mindset then, one can read Michael Crichton's "Rising Sun" - - in the non-fictional afterword, he wrote that very soon Japan's GDP would equal that of the US.

Of course Japan was in a very different stage of economic development, but it does illustrate how such conventional-wisdom projections can be silly.

As for China, it must be remembered that it remains a very poor country with a largely agricultural population -- the fast growth is due to a mobilization of unused resources rather than innovation or increased productivity. Everybody forgets it now, but even Brazil went through something like this in the 1970s with GDP growth averaging 10% a year - - this is even more so for Southeast Asia.

My point is that China will continue to grow, and may even equal the US in GDP due to its huge population -- but it will remain a relative poor country for the foreseeable future, and it will have its share of shocks and crashes on the way.

BTW, from the article:

"Products for the US market are increasingly produced in the cheap factories of the new Asian economic wonderland and jobs are increasingly being exported."

Doesn't this apply to Germany as well?

I think the difference is Germans want to protect factory jobs, even if it's futile to do so. Others, notably the US and UK, see the writing on the wall. You can argue that research and services aren't as valuable as manufacturing, but the fact of the matter is that's where the jobs are now. Germany would be better off concentrating their resources in other sectors, rather than the manufacturing sector which simply cannot compete with China.

I think we'll always have a manufacturing base for specialized equipment, but the mass-produced crap we purchase at the local discount store will continue to be manufactured in China. The sooner the Germans wise up to this the better off they'll be.

@George Purcell
>>China will begin a demographic transition from a young to an aged society within the next 10-15 years.

I'm not sure that is correct, but after I post this I'll try to check it out. However, anything I've read about Chinese demographics emphasizes the imbalance between men and women. With the 'one child' policy in effect, very few female offspring were allowed to survive. Now - and forgive me I can't recall the actual ratio - the men so far outnumber the women that a great percentage of men will not be able to marry. The worry that seems to be causing is what do men who have no domestic obligations/constraints do with themselves? Hmmm.

Ok Mr. Purcell, this is what I found

-----------------------------------
Population: 1,261,832,482 (July 2000 est.)

Age structure: 0-14 years: 25% (male 168,040,006; female 152,826,953) 15-64 years: 68% (male 439,736,737; female 413,454,673) 65 years and over: 7% (male 41,200,297; female 46,573,816) (2000 est.)

Population growth rate: 0.9% (2000 est.)

Birth rate: 16.12 births/1,000 population (2000 est.)

Death rate: 6.73 deaths/1,000 population (2000 est.)

Net migration rate: -0.4 migrant(s)/1,000 population (2000 est.)

Sex ratio: at birth: 1.15 male(s)/female under 15 years: 1.1 male(s)/female 15-64 years: 1.06 male(s)/female 65 years and over: 0.88 male(s)/female total population: 1.06 male(s)/female (2000 est.)

Infant mortality rate: 28.92 deaths/1,000 live births (2000 est.)

Life expectancy at birth: total population: 71.38 years male: 69.6 years female: 73.33 years (2000 est.)

Total fertility rate: 1.82 children born/woman (2000 est.)

--------------------------------
http://www.abacci.com/atlas/demography.asp?countryID=170

I'm amused by the doom and gloom projected onto America...As long as people keep looking into a mirror to paint a picture of others, the longer they'll keep living the way they do. Project all you want Spiegel, it's not changing us and it's not helping you guys.

Do I even bother mentioning economic statistics? Nah...more truth that would just...hurt...

boo hoo

And I'm also amused by this animosity projected and whipped up between America and China...

You keep right on bitching Spiegel, we'll keep changing the world...for the better.

...oh the impotence I'm feeling in the room now...

heeheehee

GDP numbers from the World Bank: http://www.worldbank.org/data/databytopic/GDP.pdf

They conflict with Der Spiegel's "apocalypse now" tone.

Would it be just TOO wicked to encourage the staff of der Spiegel to invest everything they have in China?

Why is it that Republicans in particular and their fellow travellors at the Pentagon are so afraid of China? They seem to be just as convinced of the Red Dragon's rise as the German left. Just wondering... Anybody?

If we could go back in time 70 years, and the U.S. was as relatively powerful then as it is now, one wonders if there would not be a few stories by those sharing the Spiegel mindset about how Nazi Germany and militarist Japan were going to vanquish the arrogant yanks.

Be careful what you wish for Spiegel. I am not saying that China is going to go on some warmongering rampage, but I don't see how China is going to be a better partner for Europe than the U.S. is.

Statesmen rightfully judge capabilities before intentions and hacks concentrate on near term political objectives. The truth of the matter is that the capability of China to execute successful offensive military operations against Taiwan and us grows daily. Regardless of how many people want to belittle the threat presented by the home of Happy Meal Toys.

The reason Republicans and the DoD (and a lot of related agencies, except for CIA which has different priorities than defending America)) are worried about China has a lot to do with China's various statements of its strategic aims over the last few years, coupled with our knowledge of their largely profitable decades-long effort at industrial and other espionage, and the fact that they've shifted their heavy industry base to build a warfighting capability that extends beyond their shores.

You don't build, in the course of four years, amphibious assault assets sufficient to transport Army-size formations for jollies. Nor do you simultaneously develop and commission entirely new classes of surface and submarine vessels, all armed with next-generation weaponry, without specific aims in mind.

One school of thought that I tend to support is that the Chinese would like to be able to use their reconquest of Taiwan as a tool to engage, and possibly destroy, key components of our PacFleet. They attack and take Taiwan, we honor our commitments at great cost, and the groundwork is set for a tremendous political struggle here at home. There won't be a "Remember Pearl Harbor" sentiment to unite Americans; the Chinese will telegraph their intentions and define the area of operations to favor themselves. They will have spent a lot of time and money lobbying American politicians and groups that traditionally shy away from confrontation before the fact, and they will roll the dice that they can lock up the PacRim from Vladivostok to Indonesia as their lake while we argue among ourselves.

In the Good Old Days of the Best and Brightest, it was all about detente and keeping the status quo with the communist empire. Most of our contemporary (American and other western) tottering left could be expected to sieze on a return to their glory days; I think the Chinese might just take the chance.

It's a complicated bet, though, more appropriate for intellectual debate than any physical action... and war, of all man's pursuits, pivots on simple rules. The Chinese could be using a lot more of their GDP to improve the lot of their people. Instead, they are building hulls, missiles, aircraft, mechanizing their army, and actively exploring information and space warfare strategies.

The current Chinese political/economic model is a suicide pact waiting for the right comet to fly by. Without there is radical democratization from within, history has ample evidence of how tyrants attempt to retain control by looking outward in search of justification for their rule.

Via LGF:

Bloggers from China are reporting that a suicide bomber has blown up a bus in Fuzhou City, Fujian Province, at around 2:30pm, August 8th. According to Peacehall.com, police have confiscated the cameras of those who took pictures. I first learned of this from Aaron at Hagganah Internet.

Bloggers in China have uploaded many pictures from the incident, though. Aaron, from Internet Hagganah, has archived many of the photos here. More pictures archived here and here and here. We have reproduced some of the photos below, some of which are graphic.

The official story is that only one person was killed, but from the 'unofficial' pictures, it is clear that at least three were killed--probably a lot more....


----

Via Bros. Judd:

Fridge-maker Kelon implodes
By Sam Ng and Yohji Yuan

SHUNDE, China - In a dramatic collapse that has become the talk of southern China business circles, Kelon, a top Chinese appliance maker specializing in refrigerators and air conditioners, has stopped production after its top managers were arrested in late July, and the company's future is now gravely in doubt....

-----------

A country w/approx 20 million single men and no women cos they kill their babies.....Any ideas what that fodder can be used for?


@ TmjUtah
As a marine vet you might not be the right person to answer this, but do you really think we'd defend Taiwan? Every serious analyst tells you that we're not (no gain) and that Taiwan can very well defend itself. Not to mention the likelihood of an attack on the US mainland. Zippo. The China bubble will burst just like the housing bubble... You might disagree but I think it's just too convenient to have another peer competitor out there just in case the terrorists disappear too soon.

@ RedLinda

Would the U.S. militarily intervene in a fight between Taiwan and the PRC? That of course depends on the context of the fight. If Taiwan did something to precipitate the fight, probably not. However, if the PRC finally just decided that they couldn't non-violently coerce Taiwan into accepting the "One country, two systems" model for reunification, then perhaps the U.S. would intervene.

Why? U.S. security commitments to the Phillipines, Korea, Japan, Australia and other Asian/Pacific states would be called into question if the U.S. didn't intervene in a relatively straightforward case of the PRC starting the fight. There would be a lot of pressure from the democracy/human rights lobby, and from conservatives and Taiwanese Americans (there are quite a few of these here in Caliornia). Also, the war would throw key trade routes that Japan and Korea rely on into doubt.

That being said, I don't view a conflict over Taiwan as inevitable. I think that the PRC hard-liners who would back a conflict are balanced by those who see that even a Chinese victory over Taiwan would have numerous economic and diplomatic consequences, aside from the risk of the war itself.

I thought it was the Japanese economy that was going to swamp the USA. What ever happened to the owners of Rockefeller Center anyway?

Apropos Rockefeller Center, the Japanese company (Mitsubishi, as I recall) took a bath and sold it back to an American investment syndicate for considerably less than they paid for it.

RedLinda -

"
As a marine vet you might not be the right person to answer this, but do you really think we'd defend Taiwan?
"

The "m" is usually capitalized. And what makes my background an issue whether or not I'm the "right" person to answer your question?

"The China bubble will burst just like the housing bubble."

I'm going to go out on a limb here. In your world the Soviet Union just went away, right? And I think betting on a housing bubble to bring down this administration is about as likely as Kinkos coming up with a seventies - era typewriter...

As far as Taiwan's defense capability, I don't believe you are seriously suggesting that an island one hundred miles off the coast of an industrial super power could defend itself alone under the weight of over seven hundred (that number is over three months old) conventional missile strikes and the undivided attention of a military capable of moving army-size formations by air, and lately by sea?

It doesn't matter how well equipped the Taiwanese may be tactically. They have "X" number of aircraft, "X" number of ships, and "X" number of defense bases/alternates (every inch of coast is defensible, all major highways are routinely taken out of service to be used for alternate runways, comms are hardened and redundantly designed unlike any other nation I've ever seen) and the vast majority of the Taiwanese population remembers why they are Chinese but not communists.

It's armor vs. warhead at the tactical level - and warhead always wins in the end. The PLA navy operating under an umbrella of landbased fighters only has to get the troops to the beaches; they might not be capable of real bluewater ops on our level, but their objective is to NOT appear a threat beyond theater.

You said "serious analysts" reject the possibility we'll go to the mat. Then you parenthesize "no gain". Is that like "no gain = no profit for McChimpyHalliburtonKBRWarbucksINC?"

Just asking.

I think that steve answered that particular question quite well.

If I understand your position, you are quite comfortable in the immediate with trading the freedom of millions of our friends as long as the result is no overt disturbance of our situation here at home.

In my original post I said:

"They will have spent a lot of time and money lobbying American politicians and groups that traditionally shy away from confrontation before the fact, and they will roll the dice that they can lock up the PacRim from Vladivostok to Indonesia as their lake while we argue among ourselves."

I should have said "They have spent a lot of time and money overtly and covertly..." because that is the actual case.

Thanks for confirming one part of my thesis.

I've been hearing dire predictions of American decline from across the pond for many years. What they all seem to have in common (aside from lacking basis in reality) is a tone which suggests the speaker finds the notion consoling.

@TmjUtah -
Nor do you simultaneously develop and commission entirely new classes of surface and submarine vessels, all armed with next-generation weaponry, without specific aims in mind.

You do if you have coastlines. I agree about the amphibious capacity, but updating an antiquated navy doesn't require an ulterior motive.

"If we could go back in time 70 years, and the U.S. was as relatively powerful then as it is now, one wonders if there would not be a few stories by those sharing the Spiegel mindset about how Nazi Germany and militarist Japan were going to vanquish the arrogant yanks."

Ah yes, 1935. A great year for unemployment. And yes, I believe the Nazis were busily convincing themselves that the US was a 'mongrel nation' bound to be beat badly by the pure-blooded Aryans.

That was put to the test in the 1936 Berlin Olympics where a mongrel named Jesse Owens put on a show for the pure-bred. Geneticists should not have been surprised at that or at the outcome of WWII. There is this thing called 'hybrid vigor'. An average mongrel dog will usually kill a pure-bred, everything else equal.

"I've been hearing dire predictions of American decline from across the pond for many years."

Ultimately it will happen. Someone will overtake the US - it could be China.

But let's not forget the Romans and the Parthians. The Parthians predicted Rome's demise for 400 years - only to fall to the Persians several hundred years before the Byzantine Empire fell....

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