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!

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