China Shark Attack!!!

[Stephen Philion <philion@hawaii.edu>]

This article can be found on the web at
*http://www.thenation.com/doc.mhtml?i=20050718&s=henwood*

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    Chinese Shark Attack!

by DOUG HENWOOD

[posted online on July 12, 2005]

Turn on the TV, and there's always something new to fear. Not the really 
scary stuff, necessarily, like bombs in the subway (though the talking 
heads do their best to maximize those fears) but the daily sensations 
that are the lifeblood of cable TV: disappearing in Aruba, getting 
attacked by sharks--or being taken over by the Chinese.

The China National Offshore Oil Company (CNOOC), 70 percent owned by the 
Chinese government, is putting in a bid for Unocal. Unocal had already 
agreed to being taken over by Chevron. But, as often happens when 
corporations start dating seriously, another suitor butted in. In this 
case, because China's involved, the usual forces of nationalist fervor 
are up in arms.

On June 30 the House passed a resolution stating that allowing CNOOC to 
buy Unocal would threaten national security--by a 398-to-15 vote. 
Congress was prodded into action by a bevy of agitated pundits and 
interest groups. Leading the baying mob is Lou Dobbs, who, on the June 
27 edition of his CNN show, wailed about the Bush Administration's 
silence "about the red storm that is hitting our shores." Sure enough, 
later in Dobbs's broadcast was a story about "the second shark attack in 
three days"!

But it's not just mainstream nationalists like Dobbs--China panic can 
also be found at the progressive end of the spectrum. Also on June 27, 
Public Citizen put out a statement titled "When China Owns Our 
Utilities." Citing the "national security concerns" surrounding the 
CNOOC bid for Unocal, the Naderite group worried that as part of 
comprehensive energy legislation, Congress was about to repeal the 
Public Utility Holding Company Act of 1935 (PUHCA), which prohibits 
foreign ownership of US electric and gas utilities. Public Citizen 
president Joan Claybrook laid it on thick: "Imagine the potential for 
chaos if a foreign power--especially an unpredictable, potentially 
hostile state like China--had the controls to our electricity grid or, 
worse yet, the keys to the deadly nuclear materials located at our 
commercial nuclear reactors." There are many reasons to be worried about 
the repeal of PUHCA--it would reduce regulation and promote endless 
mergers--but why the over-the-top language about the Chinese threat?

China panic is a hardy perennial in American political culture, across 
the political spectrum. As Dana Frank noted in her excellent 1999 book, 
/Buy American: The Untold Story of Economic Nationalism/, Samuel 
Gompers, who emerged as the leader of the AFL in the 1880s, agitated for 
the exclusion of Chinese goods and Chinese immigrants from the United 
States--they were a threat to "free white labor." William Randolph 
Hearst filled his papers with frightening reports about the "yellow 
peril" at our shores. In 1920 one Lothrop Stoddard published a 
bestseller called /The Rising Tide of Color Against White 
World-Supremacy/, whose title pretty much tells its story. The 
Depression of the 1930s gave new energy to the xenophobia; Hearst had 
Stoddard write stories for his papers, whipping up fears of Asian racial 
evil.

Much of the current discourse around China is an echo of late-1980s 
anxieties about the Japanese threat: after having destroyed our 
industrial base through "unfair" competition, the Japanese had moved on 
to buying up US assets, like Treasury bonds, Rockefeller Center and MCA. 
The real threat, of course, was that the United States was facing a 
serious economic competitor, a very unfamiliar situation. That it was 
Asian gave the anxious a deep toxic reservoir to draw upon. Then the 
Japanese bubble burst, and the threat of the yellow peril receded. But 
it's back again, this time with a Chinese face.

There are so many contradictions surrounding this issue that it's hard 
to keep your eyes from crossing. Dobbs's panic about the "red storm" 
makes it hard to tell where cold war anticommunism ends and capitalist 
anxiety about a new competitor begins. In describing Unocal during his 
rant, Dobbs casually mentioned its holdings in Asia (home to some 70 
percent of its assets, to be exact); apparently it's OK for us to own 
them, just not for them to own us. Among the 398 votes in favor of the 
House resolution were scores of professed free-traders; more than 250 of 
them voted for the US-Australia free trade agreement, on which a No vote 
was one of Public Citizen's legislative priorities last year. Meanwhile, 
China, still run by a nominally communist party, is lecturing Congress 
to back off and get politics out of business, thereby usurping the usual 
US role in international economic relations.

Americans love to externalize our problems. One of the reasons Chinese 
entities have the cash to buy US assets is that we keep importing huge 
gobs of stuff from them; what else are they supposed to do with all 
those dollars? Do we really want them to stop buying billions in 
Treasury bonds, a constant torrent of fresh cash that allows us to keep 
importing more than we export? Instead of talking about a rational 
energy policy, we obsess about a nonexistent threat to our national 
security. And instead of getting used to the fact that the era of 
unrivaled US dominance of the world won't last forever, Congress puts on 
its best King Canute act. So many sharks in the water!