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To: Ilaine who wrote (4358)	6/6/2001 12:24:11 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hi CB, <<On the other hand, Maxine Hong Kingston, an American writer - do I have to say Chinese-American? - writes that Chinese look down on whites, say we are ugly, stupid, and smell bad>> Some do, no doubt, though I do not personally know of any, given that most of my better friends are "sunburnable" easily:0) <<The war is over. The good guys won, the bad guys lost. What more does anyone need?>> On this, take my word for it that, out here, the war never ended, and there is still the business of making sure it never again happens in exactly the same way. This urge for get even will likely drive Asian geopolitics for at least another generation, if not longer. It is not that the region will go to war, it is more that in any given event and issue, the Japanese will not be cut any slack, as it would be political suicide for any politician to do. Each year, in HK, we still got old and young folks demonstrating in front of the Japanese consulate, wanting redemption ... of Japanese war bonds. HK is money, and for the HKers, the debt, literally, is still overdue. Again, just is, that the Japanese are foolish to keep the feud alive in a region where the memories are long to begin with. Chugs, Jay

To: Ilaine who wrote (4358)	6/6/2001 1:24:06 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hi CB, another possibility is possible ... news.ft.com QUOTE Personal view: Asia's natural partners By Andy Xie Published: June 5 2001 18:36GMT \| Last Updated: June 5 2001 21:52GMT Within as little as 10 years China and Japan could replace the US as each other's most important trading partner. The underlying economic fundamentals of this trend are so powerful that even the formidable barriers that exist will not be enough to derail it. Whether the rest of the world likes it or not, a multifaceted alliance between China and Japan is likely to emerge, one that will underpin east Asia's framework for security and economic co-operation. The data already point in this direction. In the first four months of this year, Japan's imports from China rose by 12 per cent measured in dollars. This compares with no growth, in dollar terms, for its non-Chinese imports. Last year Japan's imports from China rose by 26 per cent, even though its nominal gross domestic product was flat. China now accounts for 15 per cent of Japan's imports, against only 6 per cent a decade ago. This process of integration is undoubtedly structural. The immediate cause, however, stems from the pressure on Japanese incomes and on its corporate sector. Consumers' average monthly earnings fell 5 per cent between 1997-99 and have remained stagnant since. To compensate, Japanese workers are switching away from branded goods to private-label products. Japanese distributors have put tons of non-branded products made in China on to the shelves - and Japanese consumers have been buying them with enthusiasm. In the corporate field, Japanese companies are under pressure to maintain profit margins. Outsourcing is being extended to high- value-added and capital-intensive goods for home consumption or global distribution. One leading electronics company, for example, has moved an entire tele-vision assembly line from Japan to north-east China. While the perception remains that Japan has no equal in high-quality manufacturing, the reality is changing. Increasingly, Japanese companies can meet their quality requirements in China. If the trends continue, the bilateral trade relationship between China and Japan will assume a central importance to both countries within a decade. Japan imported $55bn-worth of goods from China last year. Assuming a 10 per cent growth rate, this figure will soar to $143bn in 10 years; at 15 per cent growth, it would exceed $200bn. Japan's trade surplus with China (including Hong Kong) was Y1,700bn ($14.2bn) in 1992 but declined to a negligible Y83bn last year. Unlike the Sino-US relationship, this trading pattern will be two-way. Japan already provides the capital goods that China needs and will continue to supply important parts and components for several industries, such as cars and consumer electronics, for years to come. Even so, some question whether this trade is sustainable in the present geopolitical context. To listen to political opinion in China or Japan today, one would think that the two countries were mortal enemies. History still plays an important role in the bilateral relationship. On this argument, it may not be enough that Japanese consumers benefit from cheap Chinese goods. Japan depends on the US for security: how would Washington feel if China were Japan's number one trading partner? These are indeed formidable barriers to the economic integration of China and Japan. However, there are powerful long-term forces at work that will, in my view, keep the process moving forward. First, China needs jobs. China's rapidly improving infrastructure has made its population more mobile. As a result, demand for urban and non-agricultural jobs will remain strong for the foreseeable future. Economic integration with Japan can be an important source of job creation. Second, Japanese companies need to raise the returns on their assets to cope with weak balance sheets and, more importantly, the impact of the country's ageing population. Relocating production to China provides the answer for the long term. The negative impact on domestic employment would be offset by Japan's demographics. Its population is expected to decline by 30 per cent by 2030. Without faster immigration, economic integration with China may be the only option of sustaining its standard of living. Third, China and Japan have strong common interests in ensuring peace and environmental protection in the region. East Asia is a volatile region but instability will affect both countries to a similar extent. An environmental disaster would also make life hard for both. While they have not reached this conclusion yet, the two will become fully fledged allies, in my view. The current relationship between China and Japan is based to a large degree on backward- rather than forward-looking issues. Economic integration will gradually change this - but it may take a crisis for each to realise how powerful their common interests are. The writer is chief economist for Asia Pacific at Morgan Stanley UNQUOTE