Is China an Economic Threat?

Adam Lashinsky
With President Bush on his way to China, it’s a good time to ask ourselves if China is a threat to the U.S. economy. Here’s the short answer: No.

Look, the president is right to press China on its sorry record of freedom of expression in particular and human rights in general. And it’s natural to get a little jittery when one country grows by leaps and bounds, as China is doing, even as others grow far more slowly (the U.S.) or, worse, stagnate. (Think: Europe)

But all this talk of the China threat is reminiscent of the great Japan threat of the 1980s. Remember when the United States was on the verge of becoming a nation of hamburger flippers? Yes, the manufacturing economy declined. But it by no means went away. And the great revolution in personal technology allowed the U.S. economy and its workers to thrive against Japan Inc. (and the Soviet Union, for that matter) without missing a macroeconomic beat.

Consider a recent report from the American Electronics Association naming China as the sixth largest destination for high-tech exports from the U.S. last year. Add in Hong Kong, says the trade group, and China was No. 3.

China will continue to grow. It’s only natural that such a large and capable country would do so. Imagine where China would be if it hadn’t been held back by half a century of repression. It’s also going to soak up a good deal of the world’s commodities, like oil and timber. At the same time, the great China market (remember the dream of selling shoes for two billion Chinese feet?) is finally opening to world trade. Is it a threat that a giant quasi-capitalistic market is opening as a buyer for U.S. goods and that U.S. consumers pay precious little for basic goods because they are made so cheaply in China?

No. It isn’t.

Adam Lashinsky ( is a senior writer for Fortune Magazine and a regular FOX News contributor.

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