There is no China crisis

Unless we cause one by overreacting to Asia's changing political and economic landscape.

- By Daniel W. Drezner

THE UNITED STATES has a long and distinguished history of freaking out about powerful rival nations. When countries even begin to approach the United States in economic might, the political reaction often borders on the hysterical. At the height of the Cold War, high rates of Soviet gross domestic product (GDP) growth caused policy makers to fret that the USSR’s centrally planned economy would outperform American capitalism. Members of Congress reacted with their usual aplomb, tolerating the rise of McCarthyism and the blacklisting of suspected communists in the arts. Sputnik triggered a similar panic about whether the United States was losing the space race to a communist foe.

A few decades later, the Japanese were the source of anxiety. After four decades of rapid growth, they seemed poised to overtake the United States economically. A pallet of books with titles like Japan as Number One, The Enigma of Japanese Power, and The Japan That Can Say No caused Americans to panic again. A Cold War treaty ally was suddenly viewed as something different: a rival with a novel variety of capitalism, one relying on greater state intervention than ours, that was threatening American hegemony. Members of Congress continued to react in a calm and professional manner—for example, by smashing a Toshiba boombox on the grounds of the U.S. Capitol.

As it turned out, American fears of both countries were wildly overhyped. Decades of Soviet demographic decline and economic stagnation proved that the Stalinist system was not, in fact, terribly viable. Likewise for Japan: Decades of demographic decline and economic stagnation proved—you get the idea.