China's record trade surplus in the first nine months has once again touched off a flurry of commentaries in the Western media about the so-called "China threat."

The Western press, especially in the United States, are wont to identify a "threat" in their foreign news reporting. Even an imagined one is better than none. Without this "threat," the more imminent and sinister the better, the stories would likely be spiked by their editors. Such is life for the army of foreign correspondents around the world.

In the 1980s, Japan, having amassed a huge trade surplus with the world in general, and the United States in particular, was presented as a mercantile marauder running around the world pillaging wealthy as well as poor nations.

Nearly all the US newspapers reported extensively on what they regarded as unfair Japanese trade practices, and accused the Japanese side of failure to honour its commitment to market opening. Japanese corporations were often portrayed as ruthless merchants with sinister plans to rob US companies of market shares in automobiles, consumer electronics and a wide range of other manufactured products.

The anti-Japan rhetoric reached a high pitch when a Japanese developer won the bid for the Rockefeller Centre in mid-town Manhattan. Japan buying up all the choice assets in the United States was at one time the hottest topic, covered widely by US newspapers and discussed extensively in business seminars and television talk shows.

At one time, business commentators talked themselves into believing that the United States, having lost its competitiveness to Japan, was sliding into what they described as a third-world economy, relying on the export of agricultural and mineral products. I remember reading articles predicting that Japanese companies would go on to win the battle against entrenched US interests in computer chips and other advanced technology.

But the much anticipated "last stand" of the US corporate sector never came. The bursting of Japan's asset bubble in the 1990s has plunged the "enemy" into a prolonged recession.

The turning of the tide has been widely attributed to the Plaza Accord in 1985 that called for the massive revaluation of the Japanese yen. Some economists hold the view that the resulting realignment of world currencies touched off a chain of events that exposed the underlying weakness of the Japanese economy and, more importantly, its banking system.

Never mind the fact that Japan's exports have remained strong even at the trough of the recession. The country's trade surplus has largely been overshadowed by its domestic problems that have become the focus of world attention. The enemy at the gate just a decade or so ago is now seen as a meek ally against what is perceived as a new and bigger threat: China.

The suggestion of Japan as a threat in the 1980s is now seen as grossly exaggerated. The suggestion of China as a threat now is patently absurd.

China, in many ways, is a more open economy than Japan in the 1980s. Since China began to pursue economic reform and an opening-up policy, overseas investors have been not only welcomed but also encouraged with a host of incentives. They were among the first to benefit from the rapid industrialization of China.

Hong Kong is a case in point. The wholesale migration of industries to the Pearl River Delta region in southern Guangdong Province has greatly enhanced the competitiveness of Hong Kong manufacturers in overseas markets. The wealth generated from re-exports, or the export of goods made in Hong Kong-owned factories in the Chinese mainland or under contract to mainland manufacturers, fuelled an unprecedented economic boom in Hong Kong in the 1980s and early 1990s.

China's entry to the World Trade Organization in 2001, accompanied by its commitment to further open its markets to direct foreign investments, is a reassurance of its stated policy of international co-operation. Indeed, the biggest benefactors of this policy, so far, have been overseas investors.

To be sure, many mainland enterprises are making a strong effort to move up the value-added chain by establishing their own brand names. Some are looking for opportunities to acquire overseas companies with established brands. They are simply trying to share the benefits that overseas investors in China have been enjoying for more than two decades. And what's more, those benefits are generated from the opening up of China.

How can that be seen as a threat to anyone?

(China Daily November 1, 2005)