US-China Watch

With the world in flux as never before, macroeconomic insight and analysis is always at risk of chasing a moving target. That is especially the case when it comes to the US-China conflict, driven by the oft unpredictable crosscurrents between the world’s two largest economies and their ambitious geostrategic aspirations. Through the combination of blogging and tracking the rapidly shifting news flow, the weekly updates below will attempt to keep you abreast of the latest developments on the US-China watch.

Conflating Japan with China

Much is being written these days about China as the next Japan. I have done some of that myself. Even the Chinese have piled on to the Japan comparison. From an economics perspective, there are, indeed, many similarities—from property-market excesses and debt-intensive growth to a profusion of zombies and structural headwinds to productivity. But there is a flip side to this same mindset—America’s need to pigeon-hole China into a Japanese narrative. In writing Accidental Conflict, I was struck by the dark side of America’s unfortunate penchant for Asian identity politics that linked China and Japan to a haunting history of racial bias that may still be in play today.

As I wrote in Chapter 4, entitled “Bilateral Bluster”: The 1982 murder of Vincent Chin in Detroit, Michigan, symbolizes the impact false narratives can have on a nation’s social fabric and political economy. After a bar fight at a bachelor party eight days before his wedding date, Chin, a twenty-seven-year-old American citizen, born in China and gainfully employed as a draftsman, was beaten to death by two US autoworkers who were angry over Japan’s threat to their livelihoods. Chin was a tragic victim of racial and economic profiling — murdered by two men who were unable or unwilling to make the distinction between a Japanese and a Chinese person. For them, blaming Asians was all that seemed to matter.

Ronald Ebens, a Chrysler plant supervisor, and Michael Nitz, his stepson and a laid-off autoworker, were initially charged with the second-degree murder of Vincent Chin. They were able to cut a deal with the prosecutors and pleaded guilty a lesser crime of manslaughter. In the end, Ebens and Nitz served no time in jail; they were put on probation for three years, fined $3,000 each, and ordered to pay $780 in court costs. They were later charged in federal courts for civil-rights hate-crime violations. Nitz was acquitted on those charges. Ebens’s initial conviction was overturned on appeal, and he was subsequently cleared of all charges.

The death of an innocent young Chinese American in a tragic and outrageous act of Japan bashing was an ugly chapter in a long history of blame with impunity, a painfully visible manifestation of America’s attraction to false narratives. The appalling outbreak of anti-Asian hate crimes in 2021-22 raises the very real question of whether the United States has ever learned the lesson of Vincent Chin.

Those words were sent to press some fifteen months ago. Since then, the drumbeat of China bashing has only grown louder in the United States. Anti-China public opinion has plunged to new unprecedented depths—stoked by political scapegoating, overblown hysteria over a surveillance balloon, and the strident fear mongering of a new select congressional committee. I argue in Accidental Conflict that false narratives, the high-octane fuel of conflict escalation, are borne out of political expediency—blaming others for self-inflicted problems. That was true of Japan in the 1980s and is even more the case today with China. Which raises an even deeper question: Why does America always seem to need a scapegoat?

To be fair, the same question can be asked of China. Xi Jinping’s mantra of the Chinese Dream is grounded in the rejuvenation from an era of humiliation—leaving China with a chip on its shoulder, convinced that containment lurks around every corner. And that gives rise to an almost paranoid obsession with security that lies at the heart of China’s new muscularity in foreign affairs.

Too much psychoanalysis? Maybe. I have long conceded that it is, indeed, a stretch to leap from the behavior of human beings to the motives of nation states. But looking at the US-China relationship through this lens does go a long way in unraveling the destructive forces behind the classic conflict phase of codependency.

You can follow me on Twitter @SRoach_econ

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