trade protectionism is a public enemy

Is there any similarity between the scenario of the power shift at the international stage in the 1930's and the current tendency that China seems to be in the position to replace the US as the world economic leader? Harold James, a historian at Princeton University, argues in an essay of FP that it is, and the problem is that the transition from an American to a Chinese model of capitalism will not be easy for the world to accept. 

But Prof. James' argument seems to be rather problematic, as it links China's withdrawal from further investment on Lehrmen Brothers directly to the financial crisis.

The initial stages of the credit crunch in 2007 were managed so apparently painlessly because sovereign wealth funds (SWFs) from the Middle East, but above all from China, were willing to step in and recapitalize the debt of U.S. and European institutions. Between November 2007 and March 2008, the SWFs provided $41 billion of the $105 billion injected into major financial institutions. Had this process continued, the events of 2008 would have included problems with U.S. real estate and a severe stock market decline, but no meltdown of financial institutions.

How strange? It seems to me Prof. James teleologically links China's withdrawal of further investment on buying Lehman Brothers as the major reason for the financial meltdown. He even goes further that 'China Investment Corp's turning back will be held up in the future as a moment when history could have shifted in a different direction.' 

It's hard to believe such a scapegoating approach to the historical discourse, really. Again and again, the argument goes like China is prone to protectionism, but we all know that a major benefactor of the globalization, China surely will advocate open trade policy.  

Otherwise, Prof. James has an objective judgement on the prospect of reforming international institutions that which is 'a key issue in deciding whether the coming geopolitical alterations will be crisis-ridden, abrupt, and disruptive, or whether a more gradual and peaceful path of adjustment can be achieved.'

Seems that there are a lot of uncertainties ahead indeed, as Jonathan Holslag puts in from an European perspective, 

None of this is to say that the Beijing Consensus guarantees a more stable world order. Far from it. A concert of powers is only as strong as its weakest player. If economic turmoil worsens, nationalism in one country or another could reduce the scope for pragmatic bargaining. Overlapping spheres of influence and frozen conflicts could once again lead to major conflict. And if, as some observers expect, China emerges from the crisis as the big winner, it won't be long before zero-sum thinking again replaces win-win cooperation as the order of the day.   

We all know line-shape is not a stable form; triangular shape is. But alas, at this critical moment, EU is still divided from within although a lot of efforts have been devoted to bridge its internal gaps. Criticising the American style stimulus measures as 'the way to hell' certainly is not productive, as it shows that less than one week for the Summit, some European countries still couldn't reach general consensus. It has prompted Timothy Garton Ash to lament on how the EU has wasted 10 years to become a more politically integrated entity. 

Looking back, one begins to see that Europe has spent the best part of 10 years failing to get its act together. A decade that began with ambitious plans for a European constitution ends with the fate of a much more modest Lisbon treaty hanging on a dubiously democratic attempt to persuade the Irish to alter their "no" to a "yes". If we had spent half the time we wasted in that constitutional debate simply co-ordinating our actions better, under the existing treaties, we would be in a better position today. Europe talks the talk but does not walk the walk. 

Putting aside all these power politics, one would see now how danger the world would become if the rich nations turn to protectionism, as today NYT's editorial warns that 'protectionism thrives in economic crises as people seek scapegoats abroad for their troubles and demand protection for domestic jobs.' 

We all should have a watchful eyes on that.