More bad news for Detroit:
line of Chinese-made cars began rolling onto a ship here Friday, bound for Europe. The cars, made at a gleaming new Honda factory on the outskirts of this sprawling city near Hong Kong, signal the latest move by China to follow Japan and South Korea in building itself into a global competitor in one of the cornerstones of the industrial economy.
Deals With China and JapanChina’s debut as an auto exporter, small as it may be for now, foretells a broader challenge to a half-century of American economic and political ascendance. The nation’s manufacturing companies are building wealth at a remarkable rate, using some of that money to buy assets abroad. And China has been scouring the world to acquire energy resources, with the bid to buy an American oil company only the latest overture.
Indeed, fierce domestic competition and a faster accumulation of financial assets are laying the groundwork for the arc of China’s rise to be far greater than Japan’s.
“It’s going to be like the Arabs in the 70’s and the Japanese in the 80’s – we were worried they’d buy everything,” said William Belchere, the chief Asia economist for Macquarie Securities in Hong Kong. But unlike those previous challenges, which soon faded, “longer term,” he added, China will “be a much bigger force.”
The story probably should have included some analysis about how the 80’s hysteria over Japan turned out, but we should note that China is not going away. Go read this piece by Jeralynn Merritt about her trip to Shanghai and the Chinese sense of long-term planning.
Hopefully, our man in China, Matthew Stinson, will start blogging again soon.
Jon H
“The story probably should have included some analysis about how the 80’s hysteria over Japan turned out, but we should note that China is not going away.”
Also, there’s the factor that Japan was at least a capitalist democracy.
China’s still an authoritarian quasi-Marxist state, with state ownership of the big companies. Not the kind of people whose thumb we really want to be under.
But, nah, the real Commie threat is Cuba.
brenda
Americas century was the twentieth and we are now in our decline. If this administration didn’t make that clear the collapse of our automotive industry will.
We really really need to be putting all our energy into education if we want to compete in the 21st century. If we don’t get out act together here we are going to be left behind.
Tim F
Everybody’s favorite pundit, Krugman, has already outlined why he dismissed the Japan hysteria back in the day, and why China isn’t Japan.
For one thing, China is spending smart. They’re going after assets of real strategic value rather than expensive hood ornaments like a movie studio. IBM gave them supercomputers and you don’t need me to tell you why the Unocal bid is a big deal.
For another China has nowhere near reached its growth potential while Japan was pretty near peaked. Forget about the whole ‘communist’ thing, China has basically become a managed capitalist dictatorship. Not unlike the Phillippines under Marcos, actually. OK a hell of a lot unlike the Phillippines under Marcos, but still similar in important ways. Anyhow.
Jon H
” IBM gave them supercomputers”
Nah, IBM only sold their regular PC and laptop business. IBM held onto their mainframes, workstations, and other high-end stuff – the things that don’t run on Intel chips, but instead run on IBM’s own POWER architecture CPUs.
Jon H
Another problem with China, that wasn’t really the case with Japan, is that China’s state ownership means that China will pretty much be able to outbid anyone for anything. The prices they pay need not be set by normal business logic, such as how long it’ll take to recoup the investment, or whether the acquired company is even worth that much money.
And if the government needs to shaft millions of citizens in order to come up with the cash, so be it. It’s not like the people will vote them out of office, or anything.
gratefulcub
They won
ppgaz
I don’t know what the consensus is on how the frenzy over Japan in the 80’s “turned out”, but ….
Toyota, Honda, Nissan. Versus Ford, GM, Chrysler. How’s that one turning out?
Also, how much American debt, or weakness in the dollar, is Japan buying? And what happens, here, if they stop buying it? Just asking.
Don’t cry for me, (I might end up living in) Argentina?
Eric Bryant
Yea, how did that whole thing with Japan turn out? I’m with ppgaz on this one. Japan’s pretty much winning the battle in the auto industry, and there’s no consumer electronics industry in this country to speak of anymore.
As others have pointed out, at least Japan is a capitalist democracy, and a strategic ally. China’s a future advesary, I believe.