Staring Down the Paper Dragon – Wall Street Journal

BY JOSEPH STERNBERG

China appears ever more willing to use its economic muscle to strategic ends. Japan is the most recent target, as tensions flare over a maritime territorial dispute. Customs processing has been delayed for some Japanese goods, and visas are somewhat less forthcoming. There are concerns about consumer boycotts, especially of Japanese cars. It’s reasonable to view such economic aggression with concern. But for now, businesses can relax—a little.

The Japanese might be skeptical of that argument. China is now Japan’s largest trading partner, destination for 24% of Japan’s exports and home to $6.3 billion in Japanese investment as of 2011, …