NATHAN GARDELS. “Huawei to Hell” recalls Toshiba threat. (The World Post 11.5.2019)

The US was able to coerce Japan on trade, but China will be much harder to coerce.   

In The WorldPost this week, Chandran Nair writes from Hong Kong that there is something strikingly familiar about America’s anti-China hysteria today to its confrontation with Japan in the 1980s.

In those days, it was the Land of the Rising Sun that was seen to threaten American superiority and prosperity, dominating U.S. markets with exports, displacing jobs, taking over movie studios and buying up iconic real estate such as the Rockefeller Center in New York. While Japan’s challenge has long faded even as the U.S. trade deficit continues to grow, the Middle Kingdom has taken its place in the crosshairs for many of the same reasons. On Friday, the Trump administration escalated the trade war by levying a stiff 25 percent tariff across a broad range of Chinese exports.

The great dissimilarity, of course, is that Japan is a liberal democracy within the U.S.-led security alliance; China is neither. It has more than ten times the population of its Asian neighbor and is a nuclear power to boot. Unlike Japan, China will not so easily be put “back in its box,” as Nair notes in his commentary below.

Chandran Nair is the founder and CEO of the Global Institute for Tomorrow and the author of The Sustainable State: The Future of Government, Economy and Society.

HONG KONG — When you have keenly followed the reaction of the West to the rise of Asia over the years, you find yourself inclined to moments of clarity that go like this: “Haven’t I seen this movie before?”

The movie, in this case, is “The Yellow Peril.” Are you now enjoying its sequel, “Huawei to Hell”?

One of the good things about being a student in an Asian university during the Cold War was the access to newspapers from the bourgeois, liberal West. It was interesting to note how Asia and its future were viewed by Americans, especially those who never seemed to really integrate or want to be part of a new phase of history written by Asia, particularly if it departed from their peculiar worldview.

In 1987, for example, a Toshiba subsidiary sold milling equipment to the Soviets, allegedly to make quieter submarine propellers, raising fury in Washington. A group of U.S. congressmen and women, apparently unable to get their hands on a submarine propeller, gathered in front of the Capitol and used sledgehammers to smash a Toshiba boombox. Take that, Tojo.

In many ways, nothing has changed. When it comes to “yellow peril,” Democrats and Republicans are united. It’s probably just a matter of time before the sledgehammers come out to do battle with Huawei smartphones or WiFi routers. That’ll show ‘em who’s boss.

Consider that in the years leading up to the end of the Cold War, opinion polls in the United States revealed that more Americans feared the economy of Japan — their ally — than the Soviet Union. Politicians of both parties regularly set aside their differences and joined together in hate against Japan. Walter Mondale, Jimmy Carter’s vice president who ran against Ronald Reagan in the 1984 election, took some swings at Japan that were just as good as Reagan’s. Interestingly, Mondale used very Trumpian lines about Japan stealing the jobs of good middle-class Americans. Bill Clinton later made Mondale the U.S. ambassador to Japan.

In 1985, two years before the submarine propeller fracas, an agreement called the Plaza Accord was signed. Japan — an evil currency manipulator! — had come under enormous pressure from the West and was forced to boost the value of its currency against the U.S. dollar. It seemed Japan’s foes weren’t so much upset about currency manipulation per se but rather the direction of the manipulation, and this revaluation would solve a huge trade imbalance.

It was heresy to bring up the fact that Japan’s automotive and electronics manufacturers had out-engineered and out-designed Americans and reached levels of quality control that the U.S. industry could only dream of. No, it was the cheap yen causing all the problems. (That boombox was very well-made.) The same is happening now to Huawei as its products become superior. The irony is that the Japanese are now on the side of the Americans.

By no small coincidence, Japan’s decline began just around the time of the Plaza Accord. By the 1990s, Japan was well into its “lost decade.” The 2000s and the 2010s haven’t been much better. But fear not: Japan’s ebbing has corresponded with China’s rise so there’s an even better “other” to blame problems on. They’re not American allies, and dang it if they ain’t commies too. What a perfect storm. Where’s my sledgehammer?

Remember the Plaza Accord amid the current trade talks under way between China and the United States. Remember Toshiba when Huawei is accused of being a security risk, even though in the more genteel 1980s, the two sides didn’t take hostages.

Don’t get me wrong: none of this means that the Chinese yuan isn’t undervalued or that Huawei isn’t a possible threat. But so are Facebook and Google. These are symptoms, not causes, of the problem. The problem, to put it bluntly, is that the leader of the free world is freaking out because it is being challenged technologically by a nation that was dirt poor a generation ago. After all, in 1987, China’s gross domestic product was smaller than Spain’s. For the first time in centuries, the West, led by the United States, is being challenged by others who, a mere generation ago, were viewed as backward and inferior.

I recently met an American who works in China. I floated the idea that this current flap was because the train was leaving the station and the Americans feared being left behind. “No, no,” he said. “Not only did the train leave the station hours ago, we are envious because their trains are so much better and faster. They connect the entire country, yet we do not have a single one like that. And now they are going to take on some of our jewels, like Boeing, as they make planes too.” Watch the skies.

Anyone in tech will tell you that visiting China is sobering. The leaps being made in areas like machine learning, artificial intelligence, big data, cloud computing, agricultural technology and 5G are stunning. Again, as was the case in Japan, there are those who say this success springs merely from the mobilization of an army of idea-less individuals, that it’s driven by stolen Western intellectual property. Have there been intellectual property violations? Of course. Industrial espionage is as old as the hills. Is it the primary reason for China’s success? Nonsense.

The biggest difference between Japan then and China now? The United States was able to put Japan back in its box. That’s not happening this time. The bully has met its match, and the bully is very uncomfortable. Given the bully’s penchant for lashing out, this is also troubling for the world.

Oh, one last thing about those Soviet propellers made with Japanese tools. Not even a year after the boombox was massacred, Richard Armitage, then assistant secretary of defense, admitted that “the Soviets had quiet propellers three years before” Toshiba sold them anything.

Popcorn, anyone? Or how about some dried, salted duck tongues from Sichuan?

By Nathan Gardels, WorldPost editor in chief

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4 Responses to NATHAN GARDELS. “Huawei to Hell” recalls Toshiba threat. (The World Post 11.5.2019)

  1. Hal Duell says:

    Every time the US now reaches for another sanction, the sanctioned and their allies devise workarounds.
    In relation to Huawei and China tech, first they tried banning the hardware by limiting access to chips. China’s replacement chip is set to go. Now they are trying to ban the software which will only end Google’s and Microsoft’s global monopoly.
    Instead of getting along, the US is set to be left behind. And what a place to be left behind in, with a debt that can only end in national bankruptcy, crumbling infrastructure, a hollowed out industrial base, a population divided to the brink of civil war and no standing to speak of on the international scene.
    My advice to the US would be the same as my advice to Canberra: End the wars and look to your water.

    • J.Donegan says:

      “End the wars and look to your water.”
      Very perceptive Hal, thank you. I believe you have described
      clearly and precisely what needs to be done – everywhere, and
      nowhere more urgently than here; e.g., there are towns in NSW
      with only days of water supply left. In other areas the situation is
      no less serious and no permanent solution in sight. Oh hang on,
      we have lots of proposed tax-cuts. There you go. Problem solved!

  2. R. N. England says:

    Free trade is enthusiastically supported by national governments only when they’re winning that brutal, constructive-destructive contest. Some lose quietly, and try to manage the effects internally, but others, like the evil empire, lash out. The evil empire has had its finger in a lot of pies, as it gradually emerged from isolationism. The sabotage of Japan’s economy was just one example of the massive covert (dishonest) power behind US national interest all over the world. The US attitude to Wikileaks is clear evidence that truth is its enemy. It’s sure to be be pouring money into Brexit voting and other attempts to break up the European Union. US-Saudi money will be fomenting discord in Western China. The Empire’s money has long been pouring into Islamic fanaticism all along Russia’s soft underbelly. It has certainly been responsible, along with Israel-supporting money for the Syrian tragedy.

    On the home front, how did Clive Palmer, who can’t even pay his workers’ entitlements, get all that election money? Why isn’t Rupert broke like others that clung to obsolete media? Because their middle names are Faust.

    It’s possible that the world’s Anglo problem is just an example of imperialism (about which Lenin was right, but not original), but is there anything special about the Anglos? Other groups have shown brief episodes of extremely ugly behaviour on the world stage, but none seem as consistent. We recognise the racism (deliciously inverted) in the King of Brobdingnag’s observation that the bulk of them constitute “the most pernicious race of little odious vermin that nature ever suffered to crawl upon the surface of the earth”. But the problem is more likely to be constitutional than genetic. Liberal constitutions allow the Anglos to be governed by the most popular of competing interest groups. Tom Durfey, a contemporary of Swift, got close to the truth with: “Lean virtue decays whilst interest sways, the ill-genius of the nation.” Democracy’s status as a religion becomes clear when we need to rename it “populism” before criticising it.

  3. Bob Aikenhead says:

    A story is told daily in our media that technologically advanced products from China are result from the theft of Western, especially US, research and manufacturing secrets. Many of our politicians have utterings on public record indicating they are sufficiently gullible or biased by cultural tunnel vision to believe the same. This article should be a corrective.
    Reliable data is readily available on research output of various countries broken down by discipline (and sub-discipline) over a decade long span. This is never utilised in Australian media coverage or commentary where pre-conceived ideas and prejudiced predominate.
    Those wishing to explore the data – and in the context of this article the extent of China’s research – should go to https://www.scimagojr.com/countryrank.php
    The default setting, in fourth column, is for the whole decade 1996-2017, setting this to 2017 will give contemporary data.
    Rankings per discipline (column 1) vary greatly, and to some extent between sub-disciplines (column 2).

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