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Steven Mufson and John Pomfret, are reporters on the national
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There's a new Red Scare. But is China really so scary?

By Steven Mufson and John Pomfret

Sunday, February 28, 2010

With the American economy struggling and the political system in gridlock, there is one thing everyone in Washington seems to agree on: The Chinese do it better.

Cyberspace? China has an army of hackers ready to read your most intimate e-mails and spy on corporations and super-secret government agencies. (Just ask Google.) Education? China is churning out engineers almost as fast as it's making toys. Military prowess? China is catching up, so quickly that it is about to deploy an anti-ship ballistic missile that could make life on a U.S. aircraft carrier a perilous affair. The economy? China has gone from cheap-clothing-maker to America's banker. Governance? At least they can build a high-speed train. And energy? Look out, Red China is going green!

This new Red Scare says a lot about America's collective psyche at this moment. A nation with a per capita income of $6,546 -- ensconced above Ukraine and below Namibia, according to the International Monetary Fund -- is putting the fear of God, or Mao, into our hearts.

Here's our commander in chief, President Obama, talking about clean energy this month: "Countries like China are moving even faster. . . . I'm not going to settle for a situation where the United States comes in second place or third place or fourth place in what will be the most important economic engine in the future."

And the nation's pundit in chief, Thomas Friedman of the New York Times, even sees some virtue in the Chinese Communist Party's monopoly on political power: "One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."

In the past, when Washington worried about China, it was mainly in terms of a military threat: Would we go to war? Would China replace the Soviet Union as our rival in a post-Cold War world? Or we fretted about it as a global workshop: China would suck manufacturing jobs out of our economy with a cheap currency and cheaper labor. But today, the threat China poses -- real or imagined -- has flooded into every arena in which our two nations can possibly compete.

And it's not just in Washington. Asked in a Washington Post-ABC News poll this month whether this century would be more of an "American century" or more of a "Chinese century," many Americans across the country chose China. Respondents divided evenly between the United States and China on who would dominate the global economy and tilted toward Beijing on who would most influence world affairs overall.

"We have completely lost perspective on what constitutes reality in China today," said Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations. "There is a lot that is incredible about China's economic story, but there is as much that is not working well on both the political and economic fronts. We need to understand the nuances of this story -- on China's innovation, renewables, economic growth, etc. -- to ensure that all the hype from Beijing, and from our own media and politicians, doesn't lead us to skew our own policy."

Having lived in China during the past two decades, we have witnessed and chronicled its remarkable economic and social transformation. But the notion that China poses an imminent threat to all aspects of American life reveals more about us than it does about China and its capabilities. The enthusiasm with which our politicians and pundits manufacture Chinese straw men points more to unease at home than to success inside the Great Wall.

This is not to say that China isn't doing many things right or that we couldn't learn a thing or two from our Chinese friends. But in large part, politicians, activists and commentators push the new Red Scare to advance particular agendas in Washington. If you want to promote clean energy and get the government to invest in this sector, what better way to frame the issue than as a contest against the Chinese and call it the "new Sputnik"? Want to resuscitate the F-22 fighter jet? No better country than China to invoke as the menace of the future.

Take green technology. China does make huge numbers of solar devices, but the most common are low-tech rooftop water-heaters or cheap, low-efficiency photovoltaic panels. For its new showcase of high-tech renewable energy in the western town of Ordos, China is planning to import photovoltaic panels made by U.S.-based First Solar and is hoping the company will set up manufacturing in China. Even if government subsidies allow China to more than triple its photovoltaic installations this year, it will still trail Germany, Italy, the United States and Japan, according to iSuppli, a market research firm.

China does have dozens of wind-turbine manufacturers, but their quality lags far behind that of General Electric, not to mention Europe's Vestas and Siemens. And although a Chinese power company has some technology that might be useful for carbon capture and storage, which many companies see as the key to cutting greenhouse gas emissions from coal plants, it has built only a tiny version to capture carbon dioxide for making soda, rather than exploring needed innovations in storage.

If not for our economic distress, we might be applauding China's clean-energy advances; after all, one first-place position we have ceded to China is in greenhouse gas emissions. Limiting those emissions is a job big enough for both of our economies to tackle.

But domestic anxieties have morphed into anxiety about China. "Every day we wait in this nation, China is going to eat our lunch," Sen. Lindsey Graham (R-S.C.) said this month. Arguing for nuclear power, as well as renewable energy sources and cleaner ways to use coal, Graham said: "The Chinese don't need 60 votes. I guess they just need one guy's vote over there -- and that guy's voted. . . . And we're stuck in neutral here."

Like others, Graham emphasizes the China threat to propel his fellow lawmakers into action. "Six months ago, my biggest worry was that an emissions deal would make American business less competitive compared to China," he said on a different day. "Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy."

In other areas, politicians and pundits also have a tendency to overestimate China's strengths -- in ways that leave China looking more ominous than it really is. Recent reports about how China is threatening to take the lead in scientific research seem to ignore the serious problems it is facing with plagiarism and faked results. Projections of China's economic growth seem to shortchange the country's looming demographic crisis: It is going to be the first nation in the world to grow old before it gets rich. By the middle of this century the percentage of its population above age 60 will be higher than in the United States, and more than 100 million Chinese will be older than 80. China also faces serious water shortages that could hurt enterprises from wheat farms to power plants to microchip manufacturers.

And about all those engineers? In 2006, the New York Times reported that China graduates 600,000 a year compared with 70,000 in the United States. The Times report was quoted on the House floor. Just one problem: China's statisticians count car mechanics and refrigerator repairmen as "engineers."

We've seen this movie before, and it didn't end in disaster for the United States. Some decades ago, Americans were obsessed with another emerging Asian giant: Japan. People were so overwrought about the "threat" that autoworkers smashed imported Japanese cars. On June 19, 1982, a Chrysler supervisor and his stepson, who had been laid off from a Michigan auto plant, killed a Chinese American man they apparently thought was Japanese. Author Michael Crichton's 1992 potboiler "Rising Sun" summed up the nation's fears. In 1991, 60 percent of Americans in an ABC News/NHK poll said they viewed Japan's economic strength as a threat to the United States.

But then something happened. Japan's economy lost its game. The 1990s became a "lost decade," so much so that during the toughest days of the recent financial crisis, Japan was invoked as a cautionary tale, lest we not do enough to jump-start our economy.

Now, some experts, such as Kenneth Lieberthal, a former senior director for Asia at the National Security Council and a man who has taught us a lot about China, say using China's green-tech rise as an excuse to whip America into shape isn't such a bad idea, because the result -- a cleaner environment or a more high-tech workforce -- makes a lot of sense. And certainly it's better to compete on that than on the size of our respective militaries.

But there is a certain irony to the new Red Scare. When we reported from China in the 1990s, some Chinese neoconservatives achieved rock-star popularity there for promoting the notion that the United States was conspiring to contain China, militarily and economically. They argued that global economic growth was a zero-sum game and that China's gain would be America's loss; as a result, Beijing had to be more assertive in its dealings with the United States.

Legions of U.S. diplomats and business leaders said no, no, no. They assured China that the two nations could grow together. Americans tried to teach Chinese the meaning of the expression "win-win."

And that is the way introductory economics courses teach it. As N. Gregory Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers, writes in his popular textbook: Trade "is not like a sports contest, where one side wins and the other side loses. In fact, the opposite is true. Trade between two countries can make each country better off."

And yet a sports contest -- or worse -- is exactly what the U.S.-Chinese relationship sounds like these days. In discussing energy at the Feb. 3 meeting with governors, Obama warned: "We can't afford to spin our wheels while the rest of the world speeds ahead."

Speeding ahead is a worthy goal, but the United States does not need a bogeyman on its tail to get moving. What may seem like a throwaway line here could damage U.S. relations there, and there are enough reasons for tension with China without manufacturing new ones. As the Chinese strategist Sun Tzu said: "If ignorant both of your enemy and yourself, you are certain to be in peril."

China is no enemy, but inflating the challenge from China could be just as dangerous as underestimating it.

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