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A 'Postcard' View Of China's Global Prominence

Journalist James Fallows explores China's recent rise to power and what it means for the US in his new book of essays, Postcards Tomorrow Square.

35:01

Other segments from the episode on January 6, 2009

Fresh Air with Terry Gross, January 6, 2009: Interview with James Fallows; Obituary for Donald Westlake; Review of Jayne Anne Phillips' "Lark and Termite."

Transcript

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A 'Postcard' View of China's Global Prominence

TERRY GROSS, host:

This is Fresh Air. I'm Terry Gross. We've been doing a lot of shows about the financial crisis, talking to people who are good at explaining how we got into this mess. To understand our economy, you have to understand China's investment in American markets, a big investment, to the tune of about $1 billion a day. China's investments in U.S. Treasury notes and other holdings have financed a lot of America's public and private debt. Why does China invest so much money in America? Is it likely to continue, considering how much of its American investments have been lost in the past year? And what would it mean for our economy if China started selling its holdings or just not buying as much?

My guest, James Fallows, has written about these questions. He's in Beijing. He's been reporting from China for The Atlantic since 2006. In the current edition of the magazine, he has an interview with the head of the China Investment Corporation, who oversees many of China's American holdings. Fallows also has a new collection of his articles about China, called "Postcards from Tomorrow Square." I asked him how much China has invested in the U.S.

Mr. JAMES FALLOWS (National Correspondent, The Atlantic; Author, "Postcards from Tomorrow Square: Reports from China"): These estimates are hard to nail down precisely because the Chinese government is pretty cagey about what it lets out, but the best guess now is there's roughly $2 trillion that China has amassed in U.S. dollar holdings. The significance of U.S. dollar holdings is that means money that pretty much has to be kept in the United States - not all of it, because there are dollars that can be used elsewhere - but mainly, it's around $2 trillion. That's in U.S. Treasury notes, the U.S. stock exchange, other kinds of U.S. investments. It's going up - it's been going up recently for by about $1 billion each day.

GROSS: That's a lot of money. So...

Mr. FALLOWS: It is.

GROSS: So, has the China investment in the U.S. market help create the bubble that we had been living in, the one that burst? And has that investment given us a sense of prosperity and access to money that we really shouldn't have counted on?

Mr. FALLOWS: You'd have to say yes, and most people - there was a time three or four years ago when people were looking at this interaction between China and United States, and people described it as a, on the whole, positive phenomenon, because the idea was that China, which was mainly intent on creating manufacturing jobs for people who are pouring out of the countryside and were looking a way to get into the modern economy, it wanted to sell things. And so, it was collecting all this money from its sales to the U.S., and Europe, and the rest of the world. The United States wanted to have money to invest in various things, or to use, or to consume.

And so, the Chinese, who were reaping all these dollars from their sales of exports to U.S. and other places, were giving a cushion to consumption in the U.S., and consumption, not just in the sense of the extra thing you could buy in the store and the loan could you take out, but mortgages keeping their rates lower than they would otherwise be; the tax rates in the U.S. keeping them lower than they would otherwise be; interest rates across the board. So, to the extent the bubble in the U.S. was caused by having too much money, which was working for places to be invested, and that, therefore, was invested in risky ways, China was a crucial part of that.

GROSS: Now, you actually talked to the guy who decides what to invest in the U.S. markets. His name is Gao Xiqing; he's the president of the China Investment Corporation. He doesn't make all of the investments, but what has he invested, about $2 billion?

Mr. FALLOWS: He has about $200 billion...

GROSS: Uh, excuse me.

Mr. FALLOWS: That's under his organization's control. You know, two billion, 200 billion, this stuff all adds up overtime.

(Soundbite of laughter)

GROSS: Yeah.

Mr. FALLOWS: It's a lot of money that he has.

GROSS: He gave a couple of warnings to America. He said things like, we'd love to support you guys if it's sustainable. But if it's not, why should we be doing this? After we're gone, you can't just go to the Moon to get more money. And I mean, what he's saying, of course, is true. But at the same time, it also makes you wonder; can China use its financial leverage to control our behavior, or use it as a form of blackmail? Like, we'll keep investing as long as you don't put up a fuss about our human-rights violations; you don't try to meddle in any policy that affects China.

Mr. FALLOWS: The direct answer to your question is: I don't think they can use the leverage that crudely or directly - for reasons I'll come back to - but let me give you the indirect background to this first, because I think it conditions the kind of statements that we'll be hearing more of out of China over the years to come as their financial might grows. In the short term, it really is true that China and the U.S. have a kind of mutual-destruction pact. They have to keep each other going in the short term for this reason. China has so much of its saved wealth sunk in American assets, in U.S. dollars themselves, in dollar-priced shares in the stock exchanges, in U.S. Treasury notes, everything else we hear about all the time that if they try to pull that out suddenly, the United States would suffer, but so would China, too. Their value of the dollar would go down and with it, the rest of their assets; values of U.S. shares would go down, et cetera, et cetera. So, in the short term, I think there's little plausible threat the Chinese would pull this money out.

The real concern is in the long run, if, as Mr. Gao was suggesting in this interview, China began to think that the U.S. would not ever put its financial house in order and wouldn't really be a reliable base for investment or target for investment in the long run, then they might steer - start steering the money to other places, to euro investments, to the yen, to domestic - more domestic investments in China, et cetera. And while - so I think this means that while in some kind of crisis or negotiations over Tibet or what have you, it's unlikely the Chinese will say, agree with us or else we'll take this money away. But as part of their calculation of where to put the money, it's only sensible they would have in mind, in the long run this creates yet another strand, which makes it harder for the U.S. to challenge them, too, in the long run. So, I think it's a long-term political complication or political aspect as opposed to a crude sort of short-term threat or weapon they'd be able to use.

GROSS: Let's get back to Mr. Gao, the man in China who is president of the China Investment Corporation and makes a lot of the decisions about where China should be investing its money in U.S. markets, in U.S. Treasury notes. Did you get a sense from Mr. Gao about whether he plans to continue buying American holdings?

Mr. FALLOWS: There was something I did not say in The Atlantic article I wrote about this interview - I only hinted at it - but it was clear to me, by inference, from our discussion - I had a - my interview with him was shortly before the U.S. presidential election. And Mr. Gao made a joke, saying that for years and years, Chinese communist officials had followed the dictum of Chairman Mao that they should always stick with the Republicans in U.S. politics, because Mao had said the Republicans are predictable; you know what they're going to.

But I - it was clear to me that the Chinese sentiment was if the Republicans had won - if Senator McCain had won rather than Senator Obama - the last election, they would have a less optimistic sense of whether the U.S. will be able to address its economic problems. They'd come to the sense the Republicans were worse at handling the economy than the Democrats were likely to be. So, I got the sense they viewed the election as a long-term indicator about whether they could stay in the U.S. market, and they probably are more likely to stay with the Democrats now in power than they would have been otherwise.

GROSS: If you're just joining us, my guest is James Fallows. He's the national correspondent for The Atlantic. Since about 2006, he's been based in China, writing for the magazine, and now he has a new book called "Postcards from Tomorrow Square" that collects the pieces about China. He's written for The Atlantic, and he's speaking to us from Beijing. Now, to understand why China has so much money to invest in the U.S. in the first place, you need to understand something I didn't understand I started reading you, Jim, and that there's a mandatory savings policy in China. Would you describe what that policy is and what the reason for it is?

Mr. FALLOWS: Yes. And this to me has been really fascinating to report on and write about, because while there is, in effect, a mandatory savings policy, it doesn't work the way most people in the U.S. or in Europe would think if they heard that term. Because when we hear that China, as a whole, has a 50-percent savings rate - which is by far the highest in the world now, and certainly is many, many times higher than the U.S. savings rate, which has been zero in some recent years - what we think of is families who are stuffing their little RMB notes under the mattress, or putting them in some bucket, who are consciously saving half of each paycheck they get in order to put it away for the future.

Certainly, it is true that individual Chinese families have to be more frugal than in the U.S., because the social safety net in this communist country basically does not exist. There's no equivalent to social security; there's no nationally provided medical care, et cetera; people have to save for these long-term contingencies. But the real savings decisions in China, the real reason there's so much money left over is shipped to the U.S. and other places, doesn't have anything to do with the way families behave. It's the way the government has decided to manage all the money that's coming in from the exports that the people buy in the U.S. and elsewhere.

And it's a little tricky to explain in real time now, but the essence of it is, let's suppose you run a little company is southern China, and you're making watches; you are making whatever. You sell those watches to a wholesaler in the U.S., and that wholesaler gives you dollars. Most of those dollars are not useful to you because the things that are your main expenses you have to pay for in Chinese currency, the RMB or the yuan. So, you have to change that money into Chinese currency to be able to pay your workers, to buy their food, to heat your factory, to pay whatever expenses you have going on.

So, you go to the local bank; you give them the dollars you've earned; they give you back Chinese RMB, step one. So, the manufacturer is doing fine. He has the money that he needs. Step two, that local bank, if it were a counterpart in California or in London or someplace else, the local bank could decide what to do with this foreign money that suddenly was in its hands. If it was a bank in London that had dollars from some British exporter, it could decide that it wanted to sell them for more on the international currency exchanges. It might want to buy Swiss Francs; it might want to buy euros; it could do whatever it wanted. In China, that's not the case.

In China, the local bank is required to turn the money, as if it were contraband, into the central authorities, give to the People's Bank of China, because only the central government of China and a number of its operating branches can decide how to deploy this money China, collectively, has earned by operating overseas. The factory gets its money, the workers get their money, the suppliers get their money, but then the central government decides what to do with the surplus. And that's - it's that decision at the top, about how much to use within China and how much to send back overseas - to invest in the stock market, in treasury notes, in all the rest we're familiar with - that's how China has so high a savings rate and is what makes a generally free, largely uncontrolled economy controlled in this one crucial choke point.

GROSS: I guess one of the things that's really confusing for an outsider to understand is, why would China take so much of its money - the Chinese government - and invest it in the U.S. stock market or U.S. treasury notes, instead of investing in its own infrastructure - building more schools, better sewerage systems, all the things that China really needs pretty desperately?

Mr. FALLOWS: One reason why China wants to keep a lot of money overseas is essentially for safety reasons; that life is unpredictable as we see right now, when Chinese exports are plummeting, and they want to have some kind of cushion. And for a country that for almost all of recorded history has been very, very poor - or recent history, has been very poor, to have some kind of cushion is a source of reassurance and security; that's number one. Number two is I think it does not escape the notice of the Chinese leadership that there are long-term political ramifications of having so much money invested in the United States. To put it in a nice way, it's another strand of connection between the U.S. and China. To put it in a less nice way, it's a kind of leverage the China has over the U.S. So, that there's at that element, too.

Then there is a question of what they would - what would be the consequences if they use the money inside China? At least until fairly recently, the Chinese economy has been running at a such a white hot rate and pace that there was a fear that if there were any more spending on roads and buildings and airports and everything else that's being built around the country, then inflation would be revved up to an unacceptable rate. That's not so much the concern right now, but there's a sense that even though China is really short on all kinds of infrastructure, that it couldn't afford to build it any faster than it was doing so.

So, that was - that was a deterrent to using more of it domestically. And then, there was a sense, again, until quite recently, that this was a way for China to build its wealth, that investing the U.S. markets would be a good just financial investment in the long run. So, those are all the different components of why Chinese people who are poor only live - live on only half the money they produce and give the rest to the U.S. so that America can live better than it naturally would.

GROSS: You've got to say, just kind of bizarre that China, which is still officially a communist country, is investing so much money in the American markets...

(Soundbite of laughter)

GROSS: Which is, of course, a capitalist country. It's bizarre; I don't know what other word to use.

Mr. FALLOWS: I guess my standards of bizarre have been left at the wayside many, many months ago here. It's - just as a side note, I find that one reason why I look forward to waking up each morning here - even if the air is going to be opaque, even though I know five bad things will happen to me that day - is you're going to see all sorts of things which don't fit into your normal explanation of how the world works. And it's interesting also, I like most of the people I know in China; I like the excitement of what's going here.

But the bizarreness of the - there's a particular bizarreness which goes to the nature of current communist China. Certainly, it is a communist regime. The Chinese Communist Party is in control, and there's no two ways about that, but the economy in many, many ways is way more wide open than what you see in North America or Europe now. And perhaps the way in which it's most communistically controlled is the one we've been talking about right now, which is the currency-flow interaction with the rest of the world. So, that's -if you wanted to...

(Laughing) To think that there was any economic residue of communism, that's where you'd look for it.

GROSS: If you're just joining us, my guest is James Fallows. He's national correspondent for The Atlantic, but he's actually been based in China, writing about China for The Atlantic, since 2006. Now, he has a new book collecting his articles for the Atlantic about China. It's called "Postcards from Tomorrow Square." Let's take a short break here, and then we'll talk some more. This is Fresh Air.

(Soundbite of music)

GROSS: My guess is James Fallows. He's national correspondent for The Atlantic. But since 2006, he's actually been reporting from China. He has a new collection of his articles about China called "Postcards from Tomorrow Square." You mention an expression that Lawrence Summers, who was a former secretary of the Treasury and is now going to be high up in the Obama administration, he coined the expression, "the balance of financial terror," between the U.S. and China. What does that mean?

Mr. FALLOWS: This is was an allusion, of course, to the nuclear balance of terror during the Cold War years, where both the Soviet Union and the U.S. lived in threat of imminent destruction by the other, and therefore, this was suppose to domesticate their behavior to each other and in military matters. In financial terms, what Summers meant was that China and the U.S. had become so dependent on each other that each had the power to wreck the other's economy; China, as we've discussed, by - if it decided to pull out its dollar assets in a big rush, even though that would hurt them badly; the U.S., it if decided to cut off trade with China, even though that - it would hurt both of the parties.

And I think what Summers was arguing was that these balances of terror are great as long as they last and as long as they terrify each party into the right kind high-road behavior, that when something goes wrong, it can go wrong in a big hurry. And I think that's what we're seeing right at this moment, and the Chinese, interestingly, are seeing it in a way that I think almost none of them anticipated; certainly the officials didn't talk about ahead of time. When the balance of terror was discussed, usually the threat seemed to be that China would have a fire sale in the U.S. dollar, and the U.S. would be hurting badly. Instead, what's happening is that the collapse in consumer demand in the U.S., painful as it is within the U.S. itself, is being surprisingly more painful in China because it means that - because China has been, export-wise, so dependent on the U.S. market that's just been cut out all of a sudden. And so, China is recognizing that hiccups in the U.S. can cause real distortions here in China, even though China is so strong in many ways, et cetera, et cetera.

GROSS: Is the $700 billion economic bailout package and the proposed $700 billion, approximately, stimulus package that President-elect Obama wants, are those things dependent on the continuation of China investing in U.S., you know, Treasury notes and the U.S. stock market?

Mr. FALLOWS: To the extent everything at America's current financial setup is dependent on the Chinese, in particular, continuing to invest in the U.S., along with also the oil states and the Japanese and others, yes, the bailouts then are dependent on Chinese participation. But I think they're not dependent on the Chinese in a way that many Americans assume and it's often written about in the U.S. press. There is the idea - I've seen in a number of columns and news stories that, since the Chinese have this $2 trillion in American dollar assets, they could apply some of that to the bailout, to other sorts of things the U.S. needs.

The problem is those $2 trillion are already in dollars. They're already in shares of Black Stone(ph); they're already in Treasury notes; they're already in real estate or whatever else they're in. It's not new money China can bring to the U.S.; it's money that it already has brought there over the last decade or so. So, there is an additional, let's say, billion dollars today, maybe something less than that now China's bringing, but it's not as if there's this $2 trillion bag of riches the China will be able to share with us to bailout Detroit. So, yes, we depend on them in the long run, but they can't really do much to help with this current stimulus package.

GROSS: Is China still investing at that rate of a billion a day, or are they cutting back?

Mr. FALLOWS: It - the flow depends on the Chinese trade surplus, which is behaving in an interesting way. As I think many of your listeners will know, last month, when the most recent figures came out, China's exports to the rest of the world, largely the U.S., had dropped for the first time in a very long while, but China's imports had dropped by even more. So, China's trade surplus, which is the source this money, actually went up in the most recent period, but most people think that in the year or two ahead, China won't have quite the same volume, the quite the same billion dollars per day to put into dollars.

But so far, the assumption on the Chinese side seems to be that they have to do something with their money, and the U.S. is still, for the moment, on the whole, the most attractive investment site for treasury notes, which are safe; for the stock market, which I think will come up again some other day; and for all the other financial tunings which have made the U.S. the center of the world's financial markets.

GROSS: James Fallows, speaking to us from Beijing. We'll hear more of the interview in the second half of the show. Fallows has been reporting from China for The Atlantic since 2006 and has written for the magazine for over 25 years. His new book is called "Postcards from Tomorrow Square: Reports from China." I'm Terry Gross, and this is Fresh Air.

(Soundbite of music)

GROSS: Coming up, we listen back to an interview with mystery writer Donald Westlake. He died last Wednesday at the age of 75. His novels "Point Blank," "Payback" and "The Hot Rock" were adapted into films. His screenplay for "The Grifters" was nominated for an Oscar. Also, Maureen Corrigan reviews the new novel by Jayne Anne Phillips, and we continue our conversation with James Fallows.

(Soundbite of music)

GROSS: This is Fresh Air. I'm Terry Gross. Back with James Fallows, who has been reporting from China for The Atlantic Magazine since 2006. He has a new collection of his articles about China, called "Postcards from Tomorrow Square." Fallows was in Beijing when we recorded our interview yesterday.

You know, there was a time when you were writing about a technology for The Atlantic, and you've been writing a little bit about what it's like to navigate around the Internet in China. And most Americans know that China has kind of a firewall; there's the sites you're allowed on and the sites you are not allowed on the Internet in China. So, what do you have to do to get around that and get to whatever site you want?

Mr. FALLOWS: There is a simple way to get around the - any - the entire blockage, the so-called great firewall of China, and that's to spend, as I do, $40 a year for a so-called VPN, or virtual private network, or to use proxy servers or other kind of free services. If you try, you can get around all the different ways the sensors have tried to keep people within China from getting to sources of information outside world.

What's fascinating about this, I think, is that Chinese authorities don't really care about me and whether I'm able to go see some Free-Tibet site that's being run from London. They don't really care about people in China who have $40 a year to get these services or people who can read English well enough to be able to see what's available in the rest of the world. What they really care about is making it just inconvenient enough for most Chinese people to get outside the strictures that they won't bother and that most Chinese people will spend most their time reading Chinese language sites that are run in China and supervised by the Chinese authorities and that does the job.

And it's a kind of subtle repression, which is different from the way we usually think of how the Chinese government operates, and is in its own way admirable in its cunning. You know, of course one deplores any constraint on free expression, et cetera, et cetera, but I find myself admiring the ingenuity with which it's set up.

GROSS: And as you point out in your writing, if you're Chinese and you want to write a blog in the Chinese language, you, kind of, have to do it on the official government site if you want Chinese readers, because that's where everybody is.

Mr. FALLOWS: There's a really interesting sociological point about this. There is, of course, a huge Chinese Diaspora of Chinese-speaking, Chinese-literate people around the world - lots in the U.S. and Australia and Europe, other places - who often are writing things in Chinese that are part of the ongoing political discussion in China. But one observer was telling me that if you want to be in the Chinese game, you really have to be inside China; that people, in the long run, they get kind of cut off on the flow of discussion; they lose their feels; like people writing about American politics from Kazakhstan or wherever, there's a way in which you become cut off.

And so, most of the attention by the Chinese audience is to sites that are located within the country, and once they're in the country, the government really has the whip hand, as we say. People use - if you go to an Internet cafe, you have to register with your real name. There are Internet sensors and Internet spies and people who are there kind of as agitprop counter-bloggers; if some subversive blog comes up, they'll have a lot of hostile comments on it. So, once you're within territorial China, then...

(Laughing) I will use this perhaps unfair analogy...

It reminds me of a whole county run by Fox News...

(Soundbite of laughter)

Mr. FALLOWS: Where there is one line that comes out and may be different from Fox News', but the same kind of thoroughness that goes with it.

GROSS: So, what was it like for you to watch the election from China?

Mr. FALLOWS: What was the most different about being in China from being other parts of the world and perhaps from being in the U.S. is there was less emotional content in the election here, I think, than the other places. I - this is a widely observed phenomenon in China, and I think I can explain this way. One is there is a preference - there's has been a preference for China for the familiar-known quantity in the U.S. of making no ripples. If it would have been possible to have George Bush in office another four years, he would have won by big landslide in China. Partly that's because he's been relatively good for China; partly because they always want more of the same. If it couldn't be George Bush, they would want to have Hillary Clinton, because she also was somebody they'd been familiar with in the past, despite some of her own disputes with China.

And they were two others factors which, I think, affected the Chinese view. One is they view Democrats as being, on the whole, trouble for China on trade issues. They thought regardless of anything Obama said, there might be trade problems, and a delicate point, but a true one. The fact that Obama will be the first non-white president of the U.S., which was a symbolic plus in so much of the world, I think, was a symbolic minus here. That attitudes - racial attitude towards - within China are what Americans would view as anachronistic. It is still quite natural for educated people to say that whites are - they view whites as talented and blacks as untalented, black is having bad works habits, blacks as not being educated. And so, the idea that a black person could be the head of this powerful nation took more adjustment within China than in other countries.

GROSS: My guest is James Fallows, and he is national correspondent for The Atlantic. But since 2006, he has actually been reporting from China for The Atlantic. And his new book, which collects many of his articles from China, is called "Postcards from Tomorrow Square." He's speaking to us from Beijing. People who read your blog on The Atlantic know that your father died very recently, and you blogged about that, you know, a much more personal kind of writing than writing about the Chinese economy. Can you talk a little bit about why you've decided to blog about personal things like that as well as the more, you know, policy- and social-oriented things that you write about and what impact it's had on you to share that?

Mr. FALLOW: It's a fair question for which I'll give a journalistic answer and a personal answer. Journalistically, I've recorded a whole range of things - from policy to what I liked about this kind of food or what I hated about that kind of thing I'd just come across. And since a very, very important - the most important thing in my life at that time was the fact that my own father was dying after my mother had very suddenly died four years ago, that was something I wanted to note. The other reason was a personal reason. My father was - he was a remarkable man whose remarkability(ph) is the opposite - was the opposite from what I normally encounter in my journalistic life. In my journalistic life, I'm normally writing about people who are doing things to be noticed on a large scale, and I'm trying to note them on a large scale, in the magazine and books and even in blogs. And they're people whose - part of their impulse in doing things is to be known to do things around the world.

My dad, by the contrast, had lived his entire adult life in one small town, where he raised his family, and for the years since - from 1954 when he move there to 2008 when he died, everything about his life was being a small-town doctor, a civic leader, the chairman of every board, somebody who, with my mother, poured their hearts and lives and souls and spirits into raising their family and making their town a better place. And people like that, their achievement is not often - is not always as fully recognized. So, I wanted to try to recognize, with my personal bias, what his life had meant to the people he had touched - his patients at his little clinic, the people of the town where he was on the school board and the library board and everything else. And so, he had been a joyous and active person and also representative of his generation in particular way that I wanted to note that.

I'll say one other thing. You'll be sorry you got me started. My dad graduated from high school in 1943, and it was just at a moment where he was deciding for the military, would he be a military pilot or he'd be a military doctor? And through testing, they decided he should be a military doctor, and he was rushed through college in two years, Brown Medical School (ph), never get a college degree. And so, for all the rest of his life, he thought he'd missed those two years of college and he was going to make up for it. So, he taught himself language after language, and he learned every new skill you can imagine. He viewed the rest of his life as an exercise in acquiring areas of knowledge and areas of fascination that he hadn't had the chance to. Those two years that he missed in college made for 65 years or so of continuing education. There was a sense of joy and richness in his life, again, that I wanted to honor.

GROSS: Well, Jim, I'm sorry about your father, and thanks for talking with us a little bit. I want thank you...

Mr. FALLOWS: Thank you for giving me the opportunity.

GROSS: Yeah, and I want to thank you so much for doing this interview and under extenuating circumstances.

(Soundbite of laughter)

GROSS: Because of various technical problems were - we've recorded this in the middle of the night, China time.

Mr. FALLOWS: It's a sprightly 2:45.

GROSS: 2:45? Oh, geez. All right.

Mr. FALLOWS: So, what's nice is that there is no risk of falling asleep because they turn off the heat in all of Beijing buildings at midnight. So, it's a crisp 10 degrees in here.

GROSS: Oh, are you kidding?

(Soundbite of laughter)

Mr. FALLOWS: No, but it's a - I can see my breath.

(Soundbite of laughter)

GROSS: OK. Well, thanks for making the sacrifice to do the Fresh Air interview.

Mr. FALLOWS: Well, thanks for your questions on this wide range of topics which I really appreciate.

GROSS: James Fallows has been writing for The Atlantic for over 25 years; his new collection of articles about China is called "Postcards from Tomorrow Square." We also want to thank NPR's Beijing correspondent, Anthony Kuhn, for engineering the interview and for doing it in the middle of the night. Coming up, we'll listen back to an interview with mystery writer Donald Westlake. He died New Year's Eve. This is Fresh Air.
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Donald Westlake: Hard-Boiled to the End

TERRY GROSS, host:

The prolific and award-winning mystery writer Donald Westlake died of a heart attack New Year's Eve. He was 75. Westlake wrote over 100 novels. Many of his crime novels were written under the pen names Richard Stark and Tucker Coe. He used his own name for his comic novels about an inept thief named John Dortmunder. The movies "Point Blank," "The Hot Rock" and "Payback" were adapted from Westlake's novels. Westlake's screenplay for the film "The Grifters" was nominated for an Oscar. Here's something he told me in 1988 about crime and crime writing.

(Soundbite of WHYY's Fresh Air, 1988)

Mr. DONALD WESTLAKE (Author; Screenwriter): The essential difference between a fiction writer and a criminal is the level of imagination...

(Soundbite of laughter)

Mr. WESTLAKE: That the criminal can imagine committing the crime and can imagine how the crime should be worked out. The fiction writer can imagine committing the crime, can imagine how the crime can be worked out and can imagine getting caught. So, the criminal who can't imagine part number-three goes ahead and does it, and the fiction writer who can imagine part number three just writes about it.

GROSS: I spoke with Donald Westlake again in 1997, after the publication of his novel "The Axe," about the desperation of a man who was downsized out of his job at a paper mill. He sends out resumes but nothing happens. As he slips out of the middle class, he devises a plan to get back his income, health insurance and security. The plan requires killing off his competition. Here's a reading from the opening of the "The Axe."

(Soundbite of WHYY's Fresh Air, 1997)

Unidentified Voice Actor: (Reading) I've never actually killed anybody before, murdered another person, snuffed out another human being. In a way, oddly enough, I wish I could talk to my father about this, since he did have the experience, had what we in the corporate world called the background in that area of expertise, he having been a infantry man in the Second World War, having seen action in the final march across France into Germany in '44, '45, having shot at and certainly wounded, and more than likely killed, any number of men in dark, grey wool, and having a been quite calm about at all in retrospect. How do you know beforehand that you can do it? That's the question.

(Reading) Well, of course, I couldn't ask my father that, discuss it with him, not even if he were still alive, which he isn't, the cigarettes and the lung cancer having caught up with him in his 63rd year, putting him down as surely, if not as efficiently, as if he had been a distant enemy in dark, grey wool. The question in any case will answer itself, won't it? I mean, this is the sticking point: either I can do it or I can't. If I can't, then all the preparation, all the planning, the files I've maintained, the expense I've put myself to when God knows I can't afford it, have been in vain, and I might as well throw it all away, run no more ads, do no more scheming, simply allow myself to fall back into the herd of steer mindlessly lurching toward the big, dark barn where the mooing stops. This has to work. I have to get out of this morass and soon, which means I'd better be capable of murder.

GROSS: Donald Westlake, let me ask you to describe this character's plan for getting a good supervisory job back at a paper mill.

Mr. WESTLAKE: Well, it sort of grows gradually with him. He begins by realizing that every time he applies for a job, a lot of other people in the same - roughly in the same business, apply for the same job, and he's sending out resumes, and they're sending out resumes, and one of them gets picked. And it begins with a kind of desperate curiosity: What are they saying? What are they - how are they presenting themselves, that they get picked and I don't? And he figures out a way to attract resumes. He puts a fake ad in a journal of his area of expertise and gets the resumes just to see what they're like, and realizes that there was always going to be somebody out there a little better than him. And that leads him on to the next step of, do I give in to despair, or do I choose rage instead? And he says, well, I've got all these resumes; now what? And from there, it is somehow both a very large step and a very small step to say, let me pick out the guys who are better than and get rid of them.

GROSS: Kill them?

Mr. WESTLAKE: Kill them.

GROSS: Now, I like that this is a crime novel not from a point of view of a professional criminal; this is a murder novel from the point of view of a very middle-class, middle-management guy who's been downsized out of his job. He's always played it by the rules until this point, because now he feels incredibly cheated because the rules have been changed on him, and this isn't supposed to happen to the middle class.

Mr. WESTLAKE. Exactly, yeah. The middle class is supposed to have given up all claim on the highs in return for not being subjected to any of the lows. And all of a sudden, that's not working.

GROSS: You broke in to writing by writing true-confession stories, I think

(Soundbite of laughter)

Mr. WESTLAKE: You know too much.

(Soundbite of laughter)

GROSS: How did you get started with that?

Mr. WESTLAKE: Well, I came to New York. I wanted to write, and I was starting to write, and I came to New York and got a job with a literary agency, one of the ones where amateurs send in their short stories with money, and the agent, or an ink-stained wretch working for the agent like me...

(Soundbite of laughter)

Mr. WESTLAKE: Tells that person your story is no good, but send another story with some more money because you sure have a lot of talent. And I worked for him, and he would get assignments from little publishing - publishers of paperbacks, book publishers or magazine publishers, and you never knew what kind of job offer would show up, you know, go write a story about this or that. And so, when I first got there, his assistant, another guy there, said that if that guy ever says to you, do you anything about, say yes, whatever it is and you'll get an assignment. So, he said do you know anything about confession stories? And I said, oddly enough, yes. A friend of mine and I did content analysis on confession stories in college. And so, I went on from there, and I pulled out that old content analysis and just did every recurring short story. And they loved them.

GROSS: What were some of the things that you got from your own content analysis?

Mr. WESTLAKE: Let's see. Probably the most popular one was the woman who goes to bed with her husband's boss in order to get him the raise and then discovers he would have gotten it anyway. That was big.

GROSS: So, did you write one of those?

Mr. WESTLAKE: Oh, sure.

(Soundbite of laughter)

Mr. WESTLAKE: I think that was the first one I did.

GROSS: First person, of course, because it's meant to be...

Mr. WESTLAKE: Oh, those were all - yes. Somebody described the formula for those things as: sin, suffer, repent.

(Soundbite of laughter)

GROSS: Now, was that a useful exercise for you as a writer?

Mr. WESTLAKE: Yeah, I think so, in a funny way. I mean, after awhile, you know, it's like candy: Some of it is good, and too much of it is bad. It was a learning experience in a couple of ways, in speaking in that female voice all the time, and in getting in and out of the story quick. You know, you've got 3,000 words to paint a life, really, with this serious or perhaps serial-comic event in the middle of it and then it come out on the other side. That was a - it was like good etudes; you know, it was a good practice.

GROSS: Donald Westlake, recorded in 1997, after the publication of his novel, "The Axe." He died New Year's Eve at the age of 75. Coming up, Maureen Corrigan reviews a new novel by Jayne Anne Phillips, and she says it's a winner. This is Fresh Air.
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Lingering Love and Loss in 'Lark & Termite'

TERRY GROSS, host:

Ever since 1979, when Jayne Anne Phillips made a name for herself at age 26 with her first book of short stories "Black Tickets," she's been a writer admired both for her language and for her sharp and detailed evocation of the lives of ordinary working people. Phillips was born and raised in West Virginia, which is the setting in part of her latest novel called "Lark & Termite." Book critic Maureen Corrigan says she's happy to start off the year reviewing a winner.

MAUREEN CORRIGAN: In these desperate times for the publishing industry, a lot of review copies of new books now come accompanied by personal letters from editors, singing the praises of the book under consideration. As a reviewer who routinely glances at many of these letters extolling the luminous, urgent, startling and/or fresh-voiced quality of a new work, I was caught up short by the note included in an advance copy of Jayne Anne Phillips's new novel, "Lark & Termite." The note began...

(Reading) It's a joy to send you Jayne Anne Phillips's new novel, but it's hard to define its unique quality.

Uh-oh, I thought. If that's the best that a senior editor can do to promote a book, either letter writing truly has become a lost art or the novel is really a dud. Or then, there's the prize lurking behind door number three: It really is hard to define its unique quality. I'll give it a whirl, but "Lark & Termite" is a category of story unto itself: mystical without being gooey; wry and terribly moving; as ornately contrived as Dickens, as poetic as Morrison, yet unselfconscious in tone and peopled with vivid, salt-of-the-earth characters, who mostly accept the limitations of their life with a shrug and another cup of coffee.

At its core, "Lark & Termite" is a war story. As one of the characters here says, people forget that a soldier's death goes on for years, for a generation, really. They leave people behind. The soldier in question is Corporal Robert Leavitt, a Jewish kid from Philadelphia, who's shipped off to Korea in 1950, the very beginning of the Korean War. Even worse luck, Leavitt finds himself on the move with a mass of South Korean refugees at No Gun Ri, the locale of a now-controversial Pulitzer Prize-winning investigative story by the Associated Press. In 1999, AP reporters broke the story that South Korean civilians, attempting to flee the enemy by crossing American military lines, were shot down by American troops. The number of civilians killed remains under dispute.

What's not under dispute, from the opening of Phillips's novel, is that Leavitt will die in Korea, and yet, it's impossible not to root for a benevolent pardon for him. In this scene, a wounded Leavitt has been dragged into a dark railway tunnel by a young Korean girl, who's also trying to shelter her blind brother and an old woman. Phillips describes how the girl, her clothes covered in Leavitt's blood, crawls to a stream at the back of the cave to get water.

(Reading) The soldiers answer any skitter of stones, any involuntary cry or motion, with artillery rounds, one group shooting in response to the other. The girl waits, moves, waits, crawling, flat to the ground... [Leavitt] hears, in the dark, the sound of the girl pulling off her bunched shirt, feels her throat into the water by one long sleeve... She drags the shirt back over the ground. He hears her bury her face in the wet cloth, drink the squeezed water... Finally, she holds the wet cloth in her arms and turns to come back to them, moving against such resistance, such terrible drag, close to the tunnel wall.

All is for naught, we know, because other sections of Phillips's novel jump ahead to 1959 and focus on the people Leavitt left behind, most importantly, a severely handicapped son nicknamed Termite and his older teenaged half-sister, Lark. Lark and Termite, who are both commanding presences, live in a river town in West Virginia with their aunt, a waitress. The two storylines share moments of almost supernatural convergence. For instance, Lark and Termite's river town floods, and they ultimately find deliverance near a railway tunnel not unlike the one at No Gun Ri.

But the otherworldly intersections are not as hocus pocus as they might be, because Phillips is such a restrained writer. Her magic pops out of the mundane; it lurks in shabby living rooms and diners, offhand remarks and unconscious gestures. I said earlier that the plot of "Lark & Termite" is as highly contrived, as loaded with coincidences as a Dickens's novel, and I meant that as a compliment. But the saving graces in Phillips's more threadbare universe come courtesy, not of a Dickensian all-powerful God, but out of the love that lingers between people, across oceans and generations.

GROSS: Maureen Corrigan teaches literature at Georgetown University. She reviewed "Lark & Termite" by Jayne Anne Philips. You can download podcasts of our show on our Web site, freshair.npr.org. Fresh Air's executive producer is Danny Miller. Our engineer is Audrey Bentham. Dorothy Ferebee is our administrative assistant. Roberta Shorrock directs the show. I'm Terry Gross.

We'll close with a recording by the influential proto-punk band, the Stooges. The band's guitarist, Ron Asheton, was found dead this morning at his home in Ann Arbor. He was 60. Asheton co-founded the Stooges in 1967, along with his brother Scott and Iggy Pop. This is "Search & Destroy."

(Soundbite of song "Search & Destroy")

THE STOOGES: (Singing)
I'm a street walking cheetah with a heart full of napalm.
I'm a runaway son of the nuclear A-bomb.
I am a world's forgotten boy,
The one who searches and destroys.
Somebody got to help me, please.
Somebody got to save my soul.
Baby, detonate for me...
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Transcripts are created on a rush deadline, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of Fresh Air interviews and reviews are the audio recordings of each segment.

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