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What about 1.3 billion multiplied by zero? :)

Tejas Narechania

The historical analogy to Japan in the United States is definitely an instructive one, but in thinking about it further, is it possible that Yahoo!'s 'bet' might actually backfire?

In the 1980s, how did the United States react to the local presence of Japan? Economically, the strategy was probably a win. But from a public relations standpoint, things went much worse than I think any Japanese business person expected. I might be too young to actually remember much, but I do recall a strong anti-Japanese sentiment in the late 1980s, an increased sense of patriotism and an awareness of 'Made in USA' tags and stickers, and most vividly, an outcry against Mitsubishi's purchase of a majority stake in Rockefeller Center. In fact, the Japanese "learned their lesson" so well that Honda and Toyota were even contemplating artificially raising their prices (they eventually decided against this) at the beginning of the summer in the face of the American auto industry's recent slump, in order to avoid a political backlash.

Generally, Japan's move to increase its presence in the United States resulted in a strong anti-Japanese nationalist sentiment.

Will China react in a similar way to an increased United States presence? Already, we've seen the converse to have been proved true - attempts at Chinese FDI into the United States (think Unocal) have been met disapprovingly. As for U.S. FDI into China, it's true that China has historically welcomed some FDI as a route to economic development - but for how long will this continue, and in what sectors? I'm not sure that is China willing to tolerate a significant shift in FDI from raw materials processing to telecomm, high tech, and IPO-sensitive industries. And given the strict[er] state control in China, any negative sentiments may be amplified to a degree higher than anti-Japanese sentiment ever was here. I don't think it's unimaginable to believe that an increasing foriegn presence in China will quicken the rate at which these barriers will go up -- the very barriers these companies are hedging against.

The final question, though, is can any of this really matter? If yes, then what creative solutions do we have to to still get in the door without offending anyone? But if you think the answer might be no, consider this: What real impact can the ebb and flow of the opinion of 1.3 billion people have? Well, pick a number, any number...

gary lammert


I am riding on a limited express, one of the crack trains
of the nation.
Hurtling across the prairie into blue haze and dark air
go fifteen all-steel coaches holding a thousand people.
(All the coaches shall be scrap and rust and all the men
and women laughing in the diners and sleepers shall
pass to ashes.)
I ask a man in the smoker where he is going and he
answers: "Omaha." Kindly visit
The Economic Fractalist http://www.economicfractalist.com/


There is an interesting bit on China and its institutions over at the Center for International Private Enterprise Blog: http://www.cipe.org/blog

cr paxil



I stumbled across your blog while I was doing some online research. As someone who had the privilege of living in Japan for a number of years prior to returning to the United States, I believe I have learned quite a bit about both American and Japanese business practices. I applaud your fair approach to this situation, and I believe your caution that we go into this with our eyes open is utterly justified.


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Teens Follando

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