Eventually, the push comes to shove on the new mercantilism
Wednesday, September 1, 2010 at 12:08AM 
FT column by David Pilling on why China's telecom equipment giant, Huawei, is distrusted across the Old Core West: it is seen as a front for the People's Liberation Army--a tie it claims is dead and buried, but many in the West aren't so sure.
Two sides to the larger dynamic, both well argued here:
In the view of Mr Prestowitz, who recently wrote The Betrayal of American Posterity, a book about the country’s loss of competitiveness, the US is repeating the mistake that Britain made at the end of the 19th century. Then, he says, the UK put too much faith in the workings of the free market, throwing away its advantage to mercantilist nations such as US and Germany. Japan and other south-east Asian nations such as Taiwan, got away with similar industrial policies in the context of the cold war. Now China is at it, but on a far larger scale, he says. “I’m not saying the Chinese are wrong to be doing what they are doing. I’m just saying that the US should not be as dumb as the Brits.”
Orville Schell, a China expert at the Asia Society, has a different take. He worries that the US is in danger of being overly wary of Chinese investments. As a result, he fears, it could miss out on the huge amounts of capital now flowing out of China. He points to a recent case in which 50 US lawmakers objected to plans by China’s Anshan Steel to invest $175m in America’s (hardly booming) steel industry. “The river of capital is flowing backwards,” he says of China’s huge foreign exchange reserves and its need to invest in real assets. “I understand national security concerns, but we shouldn’t cut ourselves off from these capital flows.”
This is the dilemma now facing the US.
You want the kid to grow up and do well, but when he grows up just enough, you begin to fear him--his ambition, and his corner-cutting ways.
But getting in front of the money, as Steve DeAngelis and I like to say . . . well, that's a hard opportunity to pass up.
Reader Comments (1)
For whatever the reason behind this, why would the U.S. be in danger? They can always find ways for them not to be behind.
Stanley Lee from Cumulus eau chaude