Business Blog: Hoover’s Business Insight Zone

On my desk sits a thick file with the heading “The China Market.” That’s what Americans of the late 19th century called the potentially bottomless market of East Asia, back when clearing the surplus of goods created by the American economy started to become a serious economic issue for U.S. industries and policy makers. Well, everything old is new again, and these days it seems like you can’t stroll through a dozen business stories without hearing about PetroChina’s new oil discovery in the Bohai Bay, or how Shanghai Automotive is competing with General Motors.

Today’s arresting news, courtesy of Salon’s Andrew Leonard: The Chinese stock market is now larger than the rest of Asia’s stock markets combined. And yes, to answer my own immediate question, that includes Japan. Here’s the opening of the Financial Times story to which Leonard pointed in his post:

Bourses in China eclipse all of Asia

The value of shares traded on China’s stock markets on Wednesday was greater than the rest of Asia combined – including Japan – helping the benchmark index to breach the 4,000 mark for the first time.

From the 19th century through the middle of the 20th, China represented no threat to the the United States, either strategically or economically. For decades after the 1949 victory of the Communists in China’s civil war, the U.S. kept the country at arm’s length — when it wasn’t fighting it directly, as during the Korean War. Today the challenge for U.S. businesses and policy makers is to figure out how to get along with China — ideally to the economic benefit of both countries — without allowing the Middle Kingdom to usurp the preeminence of the United States on the world stage.

Look for more — much more — on this topic in the weeks and months to come.