Fears of an Angry Dragon.(International Edition; POINT OF VIEW)(Viewpoint essay)

Beijing could distract the population from its economic woes by whipping up nationalism.

It's official: the United States is in a recession. Meanwhile, China's annual growth looks likely to fall below 9 percent this year. Given how export-dependent China's economy is, it makes sense that Beijing is worried about conditions in the United States. But the United States should be equally worried about China.

The reason is politics. In the United States, the political fallout of the crisis is already becoming clear, and has included the election of Barack Obama--who quickly appointed an experienced and respected economic team. In China, however, the consequences remain far less certain. Beijing has already proposed a stimulus package of 4 trillion yuan (almost $600 billion). But there's reason to worry about what will happen if the bailout doesn't work and annual growth falls beneath 8 percent.

Chinese citizens today no longer enjoy the old "iron rice bowl" (a guaranteed lifetime job), but in its place they've been promised golden chopsticks: a steadily rising standard of living. Should unemployment keep growing and wages stagnate, however, workers and peasants could take to the streets--as taxi drivers did in three Chinese cities last month. More instability could deter foreign investment in China, slowing the economy still further. If that happens, the Chinese government might decide to distract the population by trying to shift its attention to a foreign scapegoat, whipping up a nationalist response. That's a prospect that should worry everyone.

This scenario may seem farfetched. After all, economists debate whether 8 percent growth really is the magic number, and unemployment needn't automatically translate into unrest. Still, Beijing itself is clearly concerned. The chairman of the National Development and Reform Commission warned in late November that "excessive production cuts and closure of businesses will cause massive unemployment, which will lead to instability." And President Hu Jintao himself recently described China as "under growing tension" both from the global financial crisis and "from its large population, limited resources and environmental problems."

Remember, too, that the Chinese government is professionally paranoid, and has waved the nationalist flag in the past to distract the population from other crises. Moreover, the Chinese population often needs little coaxing. China's younger generation is proud, but also prickly. Public anger simmers close to the surface and can easily explode in violent riots, as it did after the United States accidentally bombed the Chinese Embassy in Belgrade during the Kosovo war, or after Japan's prime minister repeatedly visited a controversial World War II cemetery. Today the Chinese ...