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Is China the new Japan?

Chinese firms failed in their bids to buy Unocal and Maytag this summer. But that`s barely diminished the anxious warnings from Washington. Indeed, as China`s economy grows, it`s easy to think the 1980s are back. Of course, that`s when Japan`s economic "miracle" threatened the US, prompting an intense backlash as companies like Toyota and Subaru, Matsushita, and Sony grabbed growing shares of industries at the heart of US identity: cars, steel, and consumer electronics. As concerns grow that a new Asian giant is intent on challenging the US in everything from sedans to software, the Japan experience of the `80s may provide insights on how the US and China might compete - and coexist - in the global economy of the 21st century.

On one level, say analysts, China is not as much of a threat as it is often portrayed to be. It has decades to go to match the high-tech and management prowess of the US - unlike Japan 20 years ago. Another critical difference is that Beijing has welcomed foreign investment and companies. That`s something that Tokyo was (and still is) loath to do. For example, China`s total exports and imports accounted for 75 percent of GDP in 2004, the figure for Japan is about 25 percent. And China, thus far, hasn`t bid for such American icons as Rockefeller Center, though it clearly has set its eye on greater investment in the US.

In many respects, China`s challenge to US economic and strategic influence is only beginning to take form. Its growth - officially 9 percent annually since embracing market reforms a quarter-century ago - is impressive. And the country is boosting the skills of at the high end of its labor force - churning out more PhDs and building engineering schools - even as its huge reserves of low-wage workers ensure its status as "factory of the world."