Let Us Pray
By THOMAS L. FRIEDMAN

Here's what I learned in Tokyo: If you're the leader of Japan, America, Australia, Taiwan, Malaysia, Russia, Thailand, Indonesia, Singapore, the Philippines or the European Union and you're not going to bed each night saying the following prayer for China, then you're not paying attention:

"Dear Heavenly Father, please keep the leader of China, President Hu Jintao, healthy and on an even keel. Please see to it that he moves steadily and carefully toward restructuring the Chinese banking system and ridding it of its huge overhang of bad loans and corruption, before there is a real meltdown that would be felt around the world. Give him the wisdom to cool the overheated Chinese economy without creating a recession that would prompt China to stop importing like crazy and start just exporting like crazy. And Father, forgive us for all the bad words we used in recent years to describe China's leaders — terms like `Butchers of Beijing.' We did not mean it. We meant to say `Bankers of Beijing,' because their economy is now fueling growth all over Asia, bolstering Japan and sucking up imports from everywhere. May China's leaders live to 120, and may they enjoy 9 percent G.D.P. growth every year of their lives. Thank you, Father. Amen."

The most striking thing about being in Asia today is hearing how much more important China's growth engine has become for companies all across the region — and well beyond it. When Chinese authorities told banks last week to cut back their wild lending, commodity prices and stock markets tumbled all over the world. News that China is having regular blackouts because it can't buy enough crude oil is helping push up gasoline prices the world over.

While three years ago the Bush team came to office growling about no longer coddling China — the way those "wimpy" Clintonites did — that talk has disappeared from the Bush vocabulary. It's not just business as usual now. It's business only.

To some degree the world is getting hooked on China — its cheap labor, its voracious appetite for commodities and capital (over $50 billion in foreign direct investment last year) and its emerging middle class. The more hooked we become, the less the world can tolerate any sort of prolonged instability there. If the China bubble bursts, it will be the mother of all burst bubbles. Which is why we need to pray that China's leaders will have the skill to cool things down, just enough but not too much, without some wheels falling off.

"A lot of the world's stability or instability is resting on the leadership in Beijing — there is no question about that," argues Richard Koo, chief economist for Nomura Research Institute. But, he insists, "Chinese leaders understand what world they are living in. They have a general equilibrium view of the world — that what they do affects us all and then comes back to affect them."

That seems true. But one of the ways that China has grown so rapidly in the last decade has been by decentralizing authority to regions and letting governors or mayors attract whatever investment they can. It is not clear anymore how much the center can slow things down.

And considering the huge amounts of foreign investment that have flowed into China in such a short time, "it's very hard to think that they could have invested that much money efficiently," remarked Robert Feldman, managing director in Tokyo for Morgan Stanley. "So the senior leadership is scared, because if they have a hard landing from bad loans you have a regime problem. [But] when they tried to slow the economy, they got real push back from the regions, who said, `You in Beijing have all that infrastructure. Why shouldn't we have a new bridge or road?' "

Given how opaque China's decision-making is, it's hard to predict how Chinese leaders will balance their obligation to behave in a way that promotes global equilibrium with their need to create millions of jobs each year in order to stay in power.

One can only say three things: 1. They've done a pretty good job so far. 2. The job gets harder every day. 3. No one will be immune to the fallout. The relationship of the world to China right now reminds me of that old banker's rule: If a client owes you $1,000, that's his problem. If a client owes you $1 million, that's your problem. China's stability is our problem.

Heavenly Father . . .