The number two and the number three in the world

I have been following the row between China and Japan for a while now. Apparently a Chinese fishing boat captain rammed a Japanese coast guard vessel outside the Senkaku islands that are disputed by not only China and Japan but also by Taiwan, and got arrested according to Gideon Rachman's weekly pod cast.

The situation headed up daily and after rumors of blocked shipments of rare earth metals to Japan from China the captain was released. It is of course not clear if there was a causality between the two events. However, people in Japan took to the streets and complained over giving in to the Chinese.

Why is the situation so tense? The Financial Times runs an analysis today about the Chinese catch up game in high-speed trains that offers one possible irritation item. The Chinese are now after some years becoming a low-cost competitor to the Japanese Kawasaki Heavy Industries, the German Siemens and the French Alstom on these trains after having "digested" the technology in question for a while.

Arnold Schwarzenegger, the Governator, is asking the Chinese to compete for the planned trains in California. They can get trains more inexpensively in this way but have not lost any technology in this case. In any case, the Chinese are building an extensive high-speed train network that according to some is a prestige project that is not going to pay off and is more and more preventing foreign competition by legal means, although it is a green project.

Fighting to get out of a recession is apparently a cut throat game where the ones with cash siphon off technological know-how. Will the Swedes follow the lead of the Governator if they are going to build high-speed trains?

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