China is weaker than we thought. Will we change our policies accordingly?

In late 1992, I started my first full-time job, as managing editor of Foreign Affairs. I remember sorting through manuscript after manuscript arguing that Japan was going to take over the world. That claim was not unusual at the time. A big bestseller of the year was Michael Crichton’s novel “Rising Sun,” a call to arms for economic war with Tokyo. In 1991, the book “The Coming War With Japan” predicted inevitable and major military conflict. During the 1992 presidential primaries, one of the pithiest campaign slogans came from Democrat Paul Tsongas. “The Cold War is over,” he would say, “and the Japanese won.”

What is striking about these words is that they all came well after the crash of the Japanese stock market, which fell from its peak in December 1989. We now mark 1990 as the year that Japan’s giddy growth era ended. But at the time, people assumed this was just a temporary interruption. They saw the data but then returned to their old thinking.

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