We Fear China Beating Us at Our Own Game

U.S. foreign policy with China, under both Republican and Democratic administrations, has been, "Loan us your money, so we can buy your stuff."

Some of our most-valuable industries, from global banks like J.P. Morgan Chase & Co. (NYSE:JPM) to distribution networks such as Wal-Mart Stores Inc. (NYSE:WMT), have emerged over the past few decades to help carry out this long-standing policy.

This week, the Pew Center, a nonpartisan think tank in Washington D.C., released more of its extensive research into the general public's perceptions of this policy. It appears that we, as a general public, are afraid. Very, very afraid.

What did we think was going to happen? You can't keep selling Treasurys to China for years on end and then ask, "Why does our government owe China more than $1 trillion?" You can't keeping watching corporations ship jobs to China for years on end, and then ask, "Gee, where'd all the jobs go?" You can't keep running annual trade deficits and then ask, "Hey, how did we dig this massive hole all the way to China?"

According to the survey:

-- 52% of Americans say they view China's emerging economic power as a major threat to the U.S., even though it is not even close in economic strength...yet.

-- When Pew asked which country poses the greatest danger, Americans named China more than any other--significantly more often than Iran and North Korea. In fact, more Americans trust Russia before they trust China. Russia! And only 26% of Americans believe that China can be trusted.

-- Despite mistrust that is growing on a Cold-War scale, 55% of Americans said it's very important for the U.S. to build a strong relationship in with China. Yes, it's practically Stockholm Syndrome, where the hostage comes to love the captor. We want a strong relationship with a nation we simply don't trust.

-- We want to kick China as hard as we can as we build this strong relationship, too. Of those surveyed, 56% said we need to be tough on China over economic and trade issues. We can't keep living with trade imbalances, intellectual property heists, cyber attacks, currency manipulations and cheap Gucci knockoffs, forever.

-- 71% are worried about a loss of jobs to China, and 61% are worried about our trade deficit with China. Note to fellow Americans: Next time, worry about these things BEFORE you get laid off.

-- Only 28% worry about China's military might; 59% are worried about its economic muscle. Apparently, we are afraid it is easier to buy a country than it is to bomb one.

-- Only 15% of Americans view China as an enemy; 66% call it a competitor. So what we fear most is competition, particularly what we view as unfair competition aimed at global domination. You know, the kind of thing Karl Marx warned about.

-- Nowhere in the Pew Center's 56-page study are the words "capitalism" or "communism." The last time we seriously bemoaned Chinese communism was during the 1989 Tiananmen Square massacre of hapless Chinese students seeking free-speech rights. Today, fewer Americans, 48%, are worried about China's human-rights policies compared to the 78% worried about the amount of U.S. debt China holds. (Hey, people, consider the flip side: It's not like we loaned $1 trillion to China and they're going to try to inflate their way out of the debt.)

Boy, are we down on China, mostly for doing what we used to do best. Republican presidential hopeful Mitt Romney has said he would slap China with tariffs to straighten it out. Yeah, that's telling them, free-market-capitalism style. President Barack Obama on Monday filed a lawsuit against China before the World Trade Organization. Yeah, let's start a trade war! See how all your cash-strapped middle-class voters like that deal.

If you grew up in the 1960s, as I did, you never imagined such a reversal.

You likely saw magazine photos of Chinese people attired in their wooly communist conformity costumes, toting little red books that blasted imperialists and capitalists, while sharing the poverty. You almost certainly heard the Beatles singing, "if you go carrying pictures of Chairman Mao, you ain't going to make it with anyone anyhow." You probably marveled in 1972 when Richard Nixon became the first U.S. president to set foot on the Chinese mainland like a courageous missionary stepping into a leper colony.

Those days are long forgotten because somewhere along the way, China decided against building a workers' utopia.

We are no longer afraid of China's communism. We are afraid of its capitalism.

(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. Contact Al at al.lewis@dowjones.com or tellittoal.com)