be ignored (there was no ‘lost decade’)(70-78).
Ch. 3: Genesis of a New System.
Theconventional account of a successful U.S.occupation of Japan is wrong; in fact Japan deliberately set up a one-partystate bent on obtaining markets for Japanese products while pretending toembrace democracy and free trade (80-89; few references). Japan’sdevelopment of Manchuria’s economy inthe 1930s has been the basic model forthe East Asian economic system, whichwas then applied to the Japanesehomeland after the war, when thezaibatsu (‘industrial group’) families wereexpropriated in a way that underminedgenuine capitalism through preferentialtrading and control of banking via theMinistry of Finance (89-97). The statisteconomic success of pseudo-democratic Taiwan, “run by a nearly omnipotent elitebureaucracy dominated by members of the mainland ethnic minority [Han—morethan 90% of mainland Chinese are Han(142), the ethnicity of leaders in Beijing]that seized power in the late 1940s,” wasthe most important factor in inducingChina to adopt the East Asian economicsystem (97-104).
(Hyundai,Daewoo, etc.)-dominated South Korea,facilitated by Japanese technologytransfers, best shows the system’s “truepotential” (104-11). In China, DengXiaoping’s 1978 victory meant a decisionto “abandon Maoist economics anddevelop instead their own version of theEast Asian economic system” (includingcartels), starting with “free economiczones” and going on to create the “NewChina” (111-15).
Ch. 4: Let There Be Savings!
Therégime of forced saving (capitalaccumulation) through restrictedconsumption is accompanied bypromulgation of false explanations, sinceit is “a blatant breach of the rules of world trade” (117; 116-18). EdwinReischauer was the first to identify theimportance of the policy, in 1955,followed by Fingleton, Lester Thurow,Daniel Lien, etc. (118-21). China restrictsretail space and raises rents (121-24).Foreign travel is discouraged (124-27).Consumer finance and credit is limited(127-32). Imports are restricted andadvertising is overpriced (132-36). Someimports that constitute a form of investment (diamonds, art objects) areencouraged (136-38).
Ch. 5: Power Begets Power.
Chinahas had genuine problems with politicalstability (139-40). But the situation inChina now “tilts toward unity” (140-42).An ersatz modernized Confuciantradition, revalorized beginning in 1994,helps Chinese leaders (142-46). TheChinese government maintains pervasivecontrol, facilitated by censorship and ill-defined property rights; “[i]n a word, theChinese Communist Party is above thelaw,” as is shown by its behavior towardthe Falun Gong movement, whose chief offense is to be “not controlled by theCommunist Party” (147, 148 ; 146-49).China’s system of taxation (149-51),statist, cartelized bank lending (151-56),selective enforcement (156-63) includingcapital punishment (163-64). Corruptionplays a systemic role (164-67).
Ch. 6: In a Confucian America.
Inpractical terms, America regularly yieldsto China (168-69). China is engaged inthe “project” of “the Confucianization of American society” (169). Cf. JamesMann’s account of AMC’s Jeep factory inChina in
(1989) (170-72).Corporations pursuing their own interestshave often taken China’s side inWashington (172-77). Comparison withRussia demonstrates that corporateleaders have not merely been promoting“free trade” (177-80). Corporations aresystematically intimidated by China (180-82). Companies that fail to cooperateface bureaucratic delays, legalharassment, even sexual blackmail, withlittle support from the U.S. government