Recent news that China has replaced Japan as first in exports to the United States can be read in any of several ways. One unsettling interpretation looks at history, and sees some unhappy parallels. PNS editor Franz Schurmann, professor emeritus of history and sociology at UC-Berkeley, is author of numerous books on foreign affairs.

China has displaced Japan as the United States' number one source of imports.

This could just be another sign of the shifting global economic center of gravity. But it also could be a sign of big trouble to come in those vast regions.

We all now live in a global economy, but this does not mean that regional and local economies are vanishing. Today we have two great regional economies, the Asia-Pacific and the euro-Atlantic, with a third -- it could be called North-South America -- in the making. And there are countless local economies all over the world.

America is the central player in the global economy -- the World Trade Organization (WTO) is an American creation, like it's predecessor, the General Agreement on Trade and Tariffs (GATT) -- created at the Bretton Woods Conference of 1944 along with the International Monetary Fund and the World Bank.

But America is also deeply involved in all three regional economies which can be sensed by looking at three other structures, also American creations. The oldest is G-7, born in 1975 and consisting of seven industrial nations, all euro-Atlantic countries save Japan. The next oldest is the Asia-Pacific Economic Cooperation (APEC) group born in the 1980s.

Third is the North American Free Trade Association, NAFTA, born in the 1990s.

The idea of potential trouble comes from an important lesson of history. Since ancient times, trading countries have considered it vital that, over the long haul, imports and exports balance out. They reasoned that unbalanced trade could lead to frictions that could in turn easily lead to war.

And, of course, countries with negative trade balances would seek to restore the balance by force of arms.

Trading patterns offer a measure of relations among countries. Historically peace and cooperation reign if trade balances even out and trouble comes with imbalance.

Today, America, the central country of the global economy, has the widest negative trade imbalances. It is no coincidence that it also is the world's number one military power.

Consider the following. Last year, the USA exported only US$16.2 billion worth of goods to Mainland China but imported some $100 billion from China -- a trade deficit of $83.8 billion, a 22 percent leap over the 1999 level. The negative balance with Japan in 2000 was $81.3 billion.

Last year the overall negative US trade balance reached a historic high at $369.7 billion -- a humongous 40% jump from the 1999 figure of $264.9 billion. The imbalance started to go down during the last quarter of 2000, with the onset of recession jitters. Markets were volatile and the American economy's growth rate dropped.

Federal Reserve Bank chairman Alan Greenspan recently said the economy had fallen to a zero growth level, but many market observers, and possibly President Bush as well, growth will return in the third quarter. If that's the case America's negative trade balance will get even wider.

But if American markets are jittery, China's are facing massive buying demand. Traders run out of shards and have to stop trading. In major cities "B stocks" have risen steeply, and in Shenzhen, close to Hong Kong, they were traded in HK dollars and in Shanghai in US dollars.

China has now become so prosperous that the government is undertaking the biggest water control program in the country's entire history. But who are the investors in these vast projects? American consumers, given their enthusiastic buying up of Chinese products, must certainly be reckoned as the root investors of these great water projects. And it will not be long before Mexico will sell so much to the USA that it can mount huge water projects for its own parched cities.

Yet as Mexico basks in a new partnership with the United States, the United State becomes ever more deeply involved in a quagmire of violence in Colombia.

The United States is also launching large-scale missile defense systems that it intends to deploy in East Asia, especially Japan, South Korea and Taiwan. Chinese papers have noted that there are two schools of thought in the American State Department -- one sees China as a great land of opportunity, the other sees China as a threat.