This is an excellent study of US-China relations, written by the author of the brilliant books In praise of hard industries and Unsustainable: how economic dogma is destroying American prosperity.

Fingleton says that China follows the East Asian model. This is mercantilist, protectionist, and generates high savings because of curbs on consumption. So its savings average 40% of GDP, which they largely invest in manufacturing.

Since 1979, China's export revenues have grown by a record 16% a year. In 2007 it exported more than the USA (in 1996, the USA had out-exported China by four to one, in 1956 by ten to one). China is now Japan's largest trading partner (in 1992, Japan did five times more business with the USA than with China). China's foreign currency reserves are the largest in history - $1.2 trillion in May 2007 and its current account surplus is a world-record 9.5% of its GDP.

By contrast, the US current account deficit in 2006 was a record 6.5% of GDP, the second largest by a major nation in peacetime (in 1924, Italy's was 7.7%). US imports exceed exports by two to one.

Fingleton sums up the comparison, "in the last four decades those advanced nations that have been most faithful to laissez-faire - the United States and Britain - have been notable for economic mediocrity, if not downright dysfunction. Their currencies have on balance fallen precipitately, their trade positions spun out of control, and they have lost the advanced manufacturing industries that provided a bedrock of well-paid secure jobs to support broad-based prosperity."

But the US capitalist class keeps on outsourcing, shutting US industry and moving jobs overseas. Its sole aim is to maximise profit, whatever the cost. As Fingleton notes, "the big gainers are ... just a few thousand top corporate executives who reap huge returns via bonuses and stock options." They refuse to invest in industry because most of its returns go to workers in higher wages, not to shareholders. "Globalism is clearly not delivering the promised economic dividends for the American nation."

He calls for a manufacturing renaissance and for tariffs to protect the USA against destructive imports. He calls his final chapter, `Globalisation or democracy': that is indeed the choice.

This review is for the seller, BookCloseouts, not for the book. The quality of the item and time received after order was very good. The extra was an email from Book Closeouts quality assurance. Nice, thank you for a (as it turns out) exceptional purchase! Thanks

The Tiananmen Square massacre occurred 20 years ago. Since that time, the US has played the game that if we help China's economy grow by offshoring work, China will open it's doors to the world creating a market for US products, and democratize (at least to some degree) it's society.

This book strongly debunks that theory, and paints a picture of how China (along with Japan and other Asian "Confucian" economies) will dominate the US in the not too distant future if we stay on the path we're on. Given the magnitude of our trade deficit with China, and amount of US debt that's already financed by China, we're already on the precipice.

The Washington establishment is betting that opening our markets to Chinese goods is the best way to promote democracy in Beijing. Countless multinational see profit in promoting this view. Unfortunately, ideology is again overruling common sense, just as it did in the decision to invade Iraq.

South Korea's 2006 per-capita income was $18,400 ($110 in 1962), less than half that of Japan. If the rapidly growing Chinese economy merely matched the per-capita income for South Korea, their economy would already be 2X that of the U.S.

Fingleton believes that China's high savings rate is a key to its rapid economic growth - encouraged by trade barriers, credit controls (consumer and mortgage credit is hardly available, including refinancing to fund consumption), land-zoning policies that greatly restrict the space for homes and retailing (creating a need for savings and high prices/rents that mostly flow back to the government - owner of most land, where it is used largely to fund industrial investment). A 17% VAT is still another means to suppress consumption.

Confucianism enjoins the populace to obedience, loyalty, and self-sacrifice; it was pushed by President Jiang Zemin in 1993 after he was impressed by how these virtues were stabilizing forces in Japan, South Korea, and especially Singapore. This stability is augmented by the government holding groups responsible for members' behavior.

Another key control mechanism is selective enforcement, in which most real power resides within unaccountable and invisible bureaucrats atop a maze of sometimes contradictory regulations that often are not enforced unless the "offender" has drawn attention through eg. political action.

Fingleton has no doubt that advanced manufacturing is a far better source of highly productive and well-paid jobs than the service jobs we now think of as our salvation. Their output is also about 10X more exportable, and provide a better job mix for people of ordinary ability. (More U.S. 2006 graduates majored in sports-exercise than electrical engineering.)

China's foreign currency reserves are the world's largest - $1.2 trillion in May, 2007. They've become a huge purchaser of American T-bonds in an effort to finance the U.S. trade deficit. Our last surplus was in 1991; even high-wage Japan (vs. U.S.) and Germany run overall trade surpluses, with Germany about balanced vs. China and Japan having a strong surplus.

The 2006 U.S. trade deficit was 6.5% of G.N.P., the second highest in history (Italy - 7.7% in 1924). Italy cut its in half the next year; there is no solution in sight for the U.S.

In our eagerness to do business with China, American corporations conduct mendacious P.R. on Beijing's behalf. Access to good housing to officials helps encourage this. Chinese free-trade dodges include delays, replacing old tariffs with anti-dumping, quotas, and standards as new barriers, piracy. American corporations rarely complain to D.C. - they fear retaliation by Chinese officials. Fingleton similarly sees American attempts to pursue an independent foreign policy increasingly subject to a veto in Beijing.

American corporations are generally required to transfer their most advanced technologies to their Chinese factories.

Bottom Line: China is changing the U.S., not vice-versa. If our policies do not change, our decline will quickly become irreversible.

In The Jaws Of The Dragon is a beautifully written analysis of the rise of China and the place of the U.S. in the alarming age of globalization. It documents what our policymakers have chosen to ignore and presents its case with astonishing clarity. This is a must read for every westerner.