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Fingleton - In the Jaws of the Dragon (2008) - Synopsis

Fingleton - In the Jaws of the Dragon (2008) - Synopsis

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Published by Mark K. Jensen
Synopsis of Eamonn Fingleton, In the Jaws of the Dragon: America’s Fate in the Coming Era of Chinese Hegemony (NY: Thomas Dunne Books/St, Martin’s Press, March 2008). Discussed at Digging Deeper (www.ufppc.org) on Jun. 22, 2009.
Synopsis of Eamonn Fingleton, In the Jaws of the Dragon: America’s Fate in the Coming Era of Chinese Hegemony (NY: Thomas Dunne Books/St, Martin’s Press, March 2008). Discussed at Digging Deeper (www.ufppc.org) on Jun. 22, 2009.

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Published by: Mark K. Jensen on Jun 23, 2009
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UFPPC (www.ufppc.org) — Digging Deeper LXXXV: June 22, 2009, 7:00 p.m. 
Eamonn Fingleton,
In the Jaws of the Dragon: America’s Fate in the Coming Eraof Chinese Hegemony 
(NY: Thomas Dunne Books/St, Martin’s Press,March 2008. Paperback slated for July 2009).
[
Thesis:
This book, completed in 2007,is a contrarian, monitory argument aboutU.S.-China relations. Fingleton proposesto alert Americans to “the Confucianchallenge” (276, 291), i.e. what he calls“the East Asian economic system” (89),to which American leaders and punditshave been blinded by self-interest orideological blinkers. China is not “reallycapitalist” (151) and is pursuing astrategy to achieve hegemony withoutusing military conflict (30-31). “The keyto the entire Confucian economicphenomenon is a revolutionary savingsregimen in which consumption issystematically suppressed” (289).]
Ch. 1: A Dragon on Steroids.
The“Washington establishment” is bettingon, and the Chinese Communist Partyleadership is betting against, the ideathat a rich China must becomedemocratic (1-3). Washington’s bet isgrounded in ideology and by ignoranceof China (3-5). This ignorance is basedon a naïve faith in the universality of Western values, ignorance of East Asianeconomics, and Chinese obfuscation (5-7). Like Japan, China obstructs free tradeand technology transfer (7-9). Japan andSouth Korea have been very successfulwith similar policies (9-10). The highChinese savings rate, “one of the mostgeopolitically significant phenomena of our time,” is an example of a generalEast Asian “policy of forced saving” [ch.4] effected through barriers toconsumption (10-14). Authoritarianmeasures, grounded in “quasi-fascist”Confucian culture that practices grouppunishment [ch. 6 & 8], maintain thesepolicies (14-19). Another tool: blackmailthrough selective enforcement of laws(19-22). Meanwhile, the U.S. is ineconomic and geopolitical decline (22-28). Western businesspeople going toChina are like “chocolate soldiersmarching into a blowtorch”; they eitherconvert to Confucian values or they fail(28-30). Chinese foreign policy isfollowing the subtle precepts of Sun Tzu(“To subdue the enemy without fightingis the acme of skill”) (30-31). China isnot becoming more like us, we arebecoming more like China (“reverseconvergence”) (32-33).
Ch. 2: “Don’t Worry, Be Happy.”
Many American policymakers are indenial about the nature of East Asianeconomics (34-36). The “Confucian truthethic,” unlike the “Western truth ethic,”is context-dependent; loyalty trumpstruth; “blanket secrecy is the norm” and“institutional mendacity” the rule (36-42). China monitors observers of Chinaand rewards “friends of China” (cf.Steven Mosher’s
China Misperceived
(1990) (42-47). Western journalismabout China is particularly inadequateand the Chinese press is “entirelygovernment-owned and comprehensivelycensored” (47-53). Thomas Friedman isa “fanatical” supporter of the pro-globalist convergence theory of U.S.-China relations (53-57). Guilt has led toextreme political correctness vis-à-visChina (57-58). Chinese policies havebeen more, not less, mercantilist than Japan’s (58-62). The Smith-Ricardolaissez-faire theory on which manyWestern policymakers rely isfundamentally flawed, as manyeconomists are belatedly acknowledging(63-67). China understands, as Fingletonargued in
In Praise of Hard Industries
(1999), that manufacturing matters (67-70). Some argue—falsely—that becausefears regarding Japan failed to berealized in the 1990s, fears of China can
 
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).
Chaebol
(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
Beijing Jeep
(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
 
(182-86). Software and Internetcompanies (Yahoo!, AOL, Google, Skype)also “kowtow to Beijing” (186-91). Bymaking the Rolling Stones acceptrestrictions on their concert, Chineseauthorities showed that all Westernershave a price and established “who wasboss” (192; 191-93). The Chinese havefunded U.S. think tanks and East Asiaprograms to promote their agenda (193-98). Chinese students flood prestigiousAmerican graduate programs, and areoften recruited by Chinese intelligence(198-200). Chinese agents and the Chinalobby are increasingly intimidating thoseoutside China (200-13).
Ch. 7: The Dragon’s Fey Friend.
Despite the conventional notion thatChina and Japan are at odds (much of which is “political pantomime”), there isa “special Sino-Japanese understanding”underlaid by Japan’s expectation thatAmerican hegemony will not belonglasting (214-30). Trade relationsbetween Japan and China are balancedand equitable, though not alwaysharmonious (230-32). Japan hasconsistently helped China “in almostevery area of policy” (232-37). China’sfailure to complain about Japan’s non-compensation of war victims and Japan’ssilence about various crises areprofoundly significant, as is Japan’sassistance to China’s nuclear program(237-43). The debate over the SenkakuIslands is contrived for a Western public(243-46). “[A]fter more than twodecades in Tokyo I have yet to meet asingle Japanese citizen who conforms tothe China-baiting profile of the Westernpress’s imagination” (245). The Yasukunishrine amounts to “an exercise in careful Japanese-style contingency planning” todivert American opinion fromstrengthening Sino-Japanese relations(250; 245-53). China blocked Japan’sentry to the U.N. Security Council in2004, but Japan didn’t really wantmembership (253-56). Japan’sconstructive trade policy toward China isthe most reliable indicator of its truepolicy (256-60).
Ch. 8: A Few Good Confucians.
Thereare “good Confucians” at “every level inthe American intellectual establishment”(280); most pursue their own interests, afew are idealists (262-64). RupertMurdoch (264-67). Maurice “Hank”Greenberg, CEO of AIG from 1968 to2005 (267-72). Economist NicholasLardy, formerly of the UW Seattle, thenwith the Brookings Institution, then Chinaadvisor to Bill Clinton (272-76). Anglo-Dutch journalist Ian Buruma, “theConfucian studies field’s literarygatekeeper” (276-80).
Ch. 9: Globalism
or 
Democracy?
LikeGeorge Bush, Americans are too guidedby their “instincts” (281-82). China’s riseis only one factor in a conjuncture of “epochal forces” (282-84). China’sexport growth if the fastest in history(284-85). American power is implodingfast, with output inflated by anovervalued dollar, imports two timesexports, collapsing manufacturingindustries (285-89). U.S. policymakers“assume away” the “Confucian”suppression of consumption (289-91).American policymakers deny reality andprefer faith in the theories of DavidRicardo, while business leaders pursueshortsighted corporate goals and ignorenational interests (291-95). Westernersin East Asia face character assassinationand coercion if they hew to “the Westerntruth ethic,” and they are sometimesentrapped with sex or money (295-99).“At least where sensitive geopoliticalissues are concerned, little truthfulinformation ever emerges from the EastAsian region” (299). Many are lulled bywishful-thinking arguments that Chinawill either break up or be Westernized(299-301). China’s polcies are producingboth economic and military clout (301-03). Americans must choose “eitherglobalism or democracy. They cannothave both” (303). American politics is

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