WASHINGTON — China’s extraordinary growth over the past few decades has spawned two major lines of analysis. One school of thought holds that China is a rising economic power poised to conquer the world. The other argues that China’s economy has become so distorted that it is bound to collapse or, at least, as a former United States Treasury secretary suggested, “regress to the mean.”
Both views are mistaken.
For one thing, China has never been a normal economy. It experienced an average of nearly 10 percent growth rates for almost four decades, a record; it is the first developing nation to become a great power. So why couldn’t it keep defying expectations?
What some take to be the Chinese economy’s weaknesses have, in fact, been strengths. Unbalanced growth isn’t evidence of a looming risk so much as a sign of successful industrialization. Surging debt levels are a marker of financial deepening rather than profligate spending. Corruption has spurred, not stalled, growth.
At least so far. The central question isn’t whether China might continue to confound norms so much as what, precisely, is required for it to do so. And that, as ever, hinges on whether the Chinese government can strike the right balance between state intervention and market forces.
Centralized authoritarian power has its benefits, including the ability for those who have it, at least in theory, to correct course rapidly. This has allowed China’s leaders to put the economy on a more sustainable growth path in recent years. The gross domestic product growth rate rebounded last year. Foreign reserves are back up as well. Wages have increased. The recent abolition of term limits for the president and vice-president’s terms gives President Xi Jinping more time and leeway to promote his vision of a more prosperous, modern and powerful China, and with the help of trusted advisers: His former corruption czar, Wang Qishan, is expected to be named vice-president and Liu He vice-premier in charge of the economy.
Skeptics about China’s future usually point to the country’s swelling debt. China’s overall debt-to-G.D.P. ratio exceeds 250 percent — but that is a fairly average level: higher than that of most emerging-market economies; lower than that of most high-income countries. More worrisome, though, is the fact that it increased by more than 100 percentage points, or nearly doubled, over the past decade.
The International Monetary Fund has cautioned that other economies that experienced such rapidly rising debt ratios — Brazil and South Korea a few decades ago, and several European countries more recently — eventually succumbed to a financial crisis. Why would China be any different?
One reason is that not all debt is created equal.
As some of the optimists note, China’s debt is public, not private, which means that the risks are largely borne by the state, which has deeper pockets. The borrowing is largely domestic, rather than external. And despite a surge in mortgages, Chinese households have a low overall debt burden compared to their counterparts elsewhere. For all its heady growth, China’s financial system also remains relatively simple, without the exotic securitization that nearly brought down the American economy a decade ago.
China’s debt ratio also seems more worrisome than it really is because its nature is often misunderstood.
China’s banks are no longer just serving state actors; now they also serve the private sector, notably after the privatization of state-owned housing in the late 1990s and early 2000s created a broad-based commercial property market. As much as two-thirds of credit expansion between 2005 and 2013 — including via unofficial or so-called shadow banking — went into property-related assets, helping establish a market price for land. Thus, rapid credit growth largely reflects an increasing financial sophistication rather than a property bubble or wasteful investments.
Still, the official figures can appear to suggest otherwise. By my calculations, property prices in China have grown sixfold since 2004. But property transactions are not included in gross domestic product assessments — which helps explain why debt levels have surged while G.D.P. has not.
That said, high debt levels do represent some fundamental weaknesses. As I detail in my last book, the tax revenues of local governments have not kept pace with their social expenditures, prompting those authorities to borrow from banks to fund public services. China’s large debt isn’t a debt problem so much as a fiscal problem in disguise.
The growing commercial role of local governments has, in turn, multiplied opportunities for graft. But this problem, too, is often misunderstood.
Corruption is said to impede growth by inhibiting investment. Not so in China, where the state controls major resources, such as land and energy, yet generates lower returns on assets than the private sector does. Privatizing those resources was a nonstarter under communism, and so corruption has served as a makeshift alternative, by allowing more private actors to use state-owned resources after striking arrangements with officials. Because those actors’ practices are more profitable, the economy has benefited overall.
Some China observers also are concerned that China’s speedy growth cannot be sustained unless consumption replaces investment as the economy’s main driver. (The Chinese government appears to agree, or claims to at least.) They point out that while investment accounts for an unusually high share of gross domestic product, consumption accounts for an unusually low share.
But to say this is to misunderstand the nature of China’s unbalanced growth.
The main cause of that imbalance is urbanization. Over the past four decades China’s urbanization ratio has increased from less than 20 percent to nearly 60 percent. In the process, workers from labor-intensive rural activities have moved to more capital-intensive industrial jobs in cities. And so, yes, an ever-greater share of national income has gone into investment as a result. But corporate profits have also risen, leading to higher wages, which have spurred consumption. In fact, even as the consumption share of G.D.P. has fallen, personal consumption has grown multiples faster in China than in any other major economy.
Eventually, China’s economy will have to become more balanced, as the government well knows. But the Chinese Communist Party’s plan for that is to have the state play the “leading” role in the economy while the market plays the “decisive” role in allocating resources. Squaring that circle can be tricky.
How will China’s leaders reform state-owned enterprises, whose profitability keeps declining (especially relative to that of private firms), when they still see those companies as national champions?
Mass urbanization is expected to continue, still not out of people’s personal preferences but at the state’s behest, by way of residency restrictions, evictions and forced relocations. Yet China’s planners now seem intent on redirecting migrants from megacities to smaller cities, and this could curb economic growth: As the World Bank points out, labor productivity is much higher in larger cities than in smaller ones.
Then, there is the corruption issue, which will require another delicate balancing act. Corruption has benefited the Chinese economy by, in effect, allowing the transfer of state assets to more efficient private actors. But over time such gains are being outweighed by the social costs of bribes, wasteful expenditures and growing inequities. Allowing corruption to run rampant could undermine the legitimacy of the Chinese Communist Party. Yet combating it with draconian measures could hurt growth by discouraging both officials and entrepreneurs from taking economic risks.
Hence the importance, and sensitivity, of Mr. Xi’s signature anticorruption campaign. It has been cast as an effort to discipline errant officials, but some see it as a means for Mr. Xi to purge political opponents or exert more control over society. It seems to have been popular so far: The general public perceives local officials as taking advantage of the system, and here is the central government appearing to rectify the situation. But some warn that the National Supervision Commission, a new agency designed to institutionalize anti-graft efforts, could signal overreach.
To discourage corruption effectively, the Chinese government will eventually have to leaven the rule of the party with more rule of law. In the meantime, some practical reforms would help, including creating a civil code to define acceptable commercial practices, basic property rights and the status of private companies. More sweeping — and more politically sensitive — reforms will also be needed to ensure that private actors have more access to major resources, like land and financing, without having to rely on personal connections to local officials.
The Chinese economy’s glory days may be over, but even a 6 percent growth rate over the next decade would be remarkable. At that pace, the economy would double by 2030 and likely become the world’s largest in nominal dollar terms. (It already is the world’s largest economy in terms of purchasing power parity.)
China’s remarkable success to date can be credited in part to its leaders’ willingness to set aside communism for pragmatism. Some observers worry that Mr. Xi is now reinjecting ideology into major policies, Mao-style. But he also is concentrating power and promoting action-oriented reformers like Mr. Wang and Mr. Liu — signaling his intention to address China’s social and economic needs even as he gathers the means to do so. China may not become a normal country for some time yet.
Comments(18)
Mr Huang, like most writers about China’s remarkable economic growth, is mistakenly smitten by China’s ability to use communist rule to drive that growth. The fact is communist rule has had nothing to do with it. Communism killed and starved 40 million people under Mao and that’s where its contribution to China’s econony ends. Growth has come to China via conducive policy in the West that has helped the country earn siginificant foreign reserves in the last half century as has happened to other tiger economies of Asia. The US consumer market lifted two billion hard working Asians out of poverty. Totalitarian regimes rode on the back of this hard work coupled with the external free market to claim credit. The way to stop revisionist sowers of human misery like the CCP from prancing around is to prevent them easy access to the West’s free market. Trade wars against them are a good start. Slap 200% tariffs on all things made in China for 10 years while offering incentives to US and Allies’ Chinese-import replacing industries to flourish and the West will prevent World War 3 from becoming. Accommodating the militarilly belligerent CCP will lead to world conflict of a scale unseen before. The free world needs to counterattack now and economically ring-fence China the way it did the Soviet Union to bring about the collapse of the CCP and its Hitlerite head. This will free the Chinese people to return to pursuing peaceful prosperity in the longer term. We can only appease evil at our peril.
Interesting reply but do you truly believe American and European consumers are going to want to pay significantly more for their goods than they do now. I don’t think so? Furthermore, do you truly believe American and European firms want to be denied access to 1.4 billion Chinese consumers? I don’t think so? The reality is the greatest economic prize in the history of the world is the developing consumerism of 1.4 billion Chinese. The CCP knows this and it is the “trump” card that America and Europe cannot overlook.
While I am not sure if tariffs and market distortion are the answer, the fact that China built its newfound riches primarily on the backs of Western consumerism is undeniable. Equally so is the fact that most Western economies that are bastions of freedom today pillaged trillions from countries in Asia and S. America to benefit their own economies, with not so much as a thank you. What goes around, comes around. While today's state of affairs in China may not sit well with those of us in the West, China has to figure out her own way to join our ideals of progress. Or not.
Interesting article that gives an account of socialism with Chinese characteristics. Lots of corruption - but if tackled effectively, especially in the public sector, it might undermine the authority of China's party politics. But many governments have a similar blind spot. It would surely be incorrect to tackle this only in China, and ignore it in other nations. The G20 has so far refused to address the matter despite repeated requests from the international accounting profession to safeguard the $trillions involved.
Most people still confuse anti-China trade with anti-free trade, and superpower rivalry with just economics. The West misread China for 40 years, starting with Nixon’s visit to China in the early 70s. Never in world history has a reigning empire so willingly and wholesomely set out to transfer wealth and power from itself to its largest adversary as has the US done with regard China. China is not postwar Japan or Germany, two solid democracies. China is Japan and Germany in the late 1930s. It is politically and systematically an antithesis to democracy and the mutually beneficial trading system. It has absolutely no empathy with the Free World or rule of law. It uses free markets as a means to an evil end, which is territorial conquest worldwide by hook or by crook. If you are not seeing it by now you are deliberately delusional. Enjoying some discount pricing in consumer goods as a reason for not preparing for war with China is like buying 1938 German and Japanese war bonds because they were a little cheaper than American treasury notes. You will end up sending your young by the million to fight China when you could no longer tolerate their military aggression. That line is fast approaching. The Free World defeated the Soviet Empire by rejecting economic relations with it. The neo-Communists in Beijing have been smarter than the old Commintern members, in using the free markets to enrich themselves with budgets that now support their military ambitions. Free citizens worldwide must stop buying China made goods if their own governments are so weak as to allow Beijjng to use their Mafia profits to buy their countries’ farms. China’s massive foreign reserves are Mob money collected from Beijing’s thieving policies in forcing Western companies to reveal IP to Beijjng for redistribution to Chinese state linked enterprises, which proceeded to replicate and then kick out Western suppliers from China’s market. The 1.4 billion China consumer market is a hoax. Even if the West could score some wins at the WTO against China that will amount to nothing as long as Communists rule in Beijing. Boycotting China goods and services is the only salvation. The economic welfare effect of this campaign will be vastly positive for the world in the long term. Especially if the West restructures the world supply chain to source consumer goods from non-China countries. Do this now for your children’s sake.
Rubbish....pure speculation with a personal slant so steep that one wonders if there is a personal grudge against China for some specific reason. All the comment left me with was the definition of paranoid delusion.
Of course it's personal. We are fighting for our children's future. But no grudge against China. We need to free China's people as stated from the start, by defeating the Communist dynasty there. Otherwise, the world is on course to WW3. The Evil Empire is not dead. Its emperor has moved from Moscow to Beijing. It has learnt new tricks, played the mercantilist game well to survive and prosper, and is now returning to hegemony. It has shed its pretence, rewritten China's Constitution, making a single-party state even more absolutist and permanently so. Thankfully, the Free World is waking up, but not too soon. We must economically disengage Beijing now before its treacherous tentacles reach further afield. The debt-for-political control deals that are grabbing corrupt rulers by the throat will enslave the peoples of those countries. Yes, in our fight against this Evil Empire we will have to give up some short term material wealth. But the alternative is to watch Beijing continue its binge of stealing your manufacture and services IP, setting up import replacing state directed enterprises using such IP, preventing you access to its market, hoarding foreign reserves, buying off your politicians, annexing international waters, colonising financially strapped societies. Its notion of 'territorial integrity' includes subjugation of Tibet and biting at Nepal, India, Vietnam, Mongolia, Taiwan, Japan, the South China Sea and East China Sea. We must stop it now by cutting it off from our markets. This is the only way to weaken the parasitic Chinese Communist Party and lead to its collapse. We play with the Devil at our peril.
Ineteresting point of view but in your commentary, “China” could easily be replaced by “America” or the “West” and nobody would think it was out of place. The developing world of which China and India are the leaders now account for 60% of global GDP. The rules of international commerce were developed by post-war America and its allies but that does not obligate the developing nations from adopting them completely. China is highly pragmatic, more so than any other culture and America and its allies are too dogmatic. Instead of rejecting China, I’m teaching my children Mandarin and having them embrace Chinese culture because that’s where opportunity will flourish and the future lies. It is too late to turn back and you only do your children a disservice if you don’t prepare them for their inevitable future where China supplants America and the West.
“China” and “West” are not interchangeable. The post-War rules of international commerce were developed due to lessons learnt from the World Wars. The world became a better place for billions of people, through US underwriting of third world exports. Asian Tiger economies took advantage of that early. China’s Communist dictatorship instead preferred murdering millions of its intellectuals with the Cultural Revolution. China was saved by Deng, who allowed people to engage in private enterprise. China joined the supply chain servicing the US market, grew wealthy. But unlike East Europe, which turned democratic following the collapse of the USSR, China has retained its Communist polity. This amoral governance led to its unchecked looting of the free market system worldwide. Xi is reconsolidating authoritarian power and whipping up “nationalist shame”. He is taking China down a self-destructive path. You assume wrong that the 60% global GDP developing world wants to change the global system. South and SE Asia, 2 billion people in all, are clamouring for more US involvement in Indo-Pacific. Only Beijing’s forked tongue wants other nations to open markets while maintaining fortress China. If you want to send your children to China to look for all those “opportunities” be my guest. But they have missed the boat. China has already chewed Western businesses and spat them out. It is gunning for Made in China 2025. No foreigners needed. If you want to sell to China raw material or entertainment and small business produce, you are welcome to do so. It’s the stuff China cannot or doesn’t bother reverse-engineering to steal. Beijing cuts tariffs on fluffs as a PR exercise against new US tariffs on its exports. Be China’s small-time servicers online while it’s working to lord over you through control of your manufacturing lifelines, using its Mob foreign reserves to buy your infrastructure networks, complete with spywares buried in them once they have bought. The West is building a freedom rim around China for those reasons. The US is going in the right direction for the first time in decades. It is building up defence capabilities for South Korea, Japan, Taiwan, ASEAN, India, East Europe. Taiwan had been shamefully abandoned by Western politicians in their courtship of China. The US might make Taiwan a special ally like Israel. It might support Tibet’s government in exile. Those who have and are willing to shed blood for freedom must be treated equal as members of the Free World. The US is restructuring the UN. It should establish the United Free Nations. Any country without free elections and free press need not apply. Corruption in global diplomacy will be cut. As democracies have never warred with each other, such UFN grouping will bring peace within. Those outside may want war but if they cannot access the wealth and technologies of the UFN they don’t have capacity to wage war. The world will become one when China is qualified to join.
More rubbish and personal opinion. America is a flawed democracy trying to hold onto the ideal of individualism. China is not so much a nation as it is a civilization or culture where individual freedoms are not nearly as important as the well-being and stability of the culture. America and the West do not understand this yet because of their insular thinking. Liberal democracy is overrated and we are seeing a shift on the world stage to more authoritarian governments. America and the West will be the last holdouts as countries like Turkey, The Philippines and others move away from democracy. America’s foothold in Asia is gradually diminishing as China asserts more local influence. The only long term option America has in Asia will be military intervention. War will not be started by China as historically China has not sought imperial ambitions and has has engaged in very few external wars in their history. American and Western decline is an inevitability and the rules of global business can be rewritten for times just as America and the West did after WW2. Simply put, their is nothing exceptional about America and allowing 4% of the world’s population to control some 20% of global GDP is unfair to China and the rest of the developing world. Individual greed in America will prevent any boycott of Chinese goods as the ingrained mindset of Americans and their corporations is to save money at all costs which translates into buying Chinese goods. Furthermore American corporations are multinationals with huge financial ties to China. You’re a fool if you think companies like Boeing and Apple mind sharing intellectual property with Chinese companies if it means access to the Chinese market. Individuals like yourself can complain about Chinese-style communism and the way that they do business but who really cares, I don’t see many foreign companies abandoning their business plans in China.
Now I can see you are a reality denier or peddler of Chinese Communist Party propaganda and not just a shallow soul who can’t see facts. How else could you double-talk with such ease and ignore the Police State that is China. Stability of “culture” my foot. It’s retention of CCP privileges. This debate hasn’t touched on American exceptionalism – other than that America has had to build walls to keep people from flooding in. China’s “civilization” is so great it has had to kill, threaten and imprison people to prevent them from fleeing. America is reliable because it is so flawed and open and ready to self-recriminate. China is treacherous because its rulers are forever mouthing piety yet forever shackling their citizens in imperial and totalitarian style that persecutes and kidnaps and murders its critics. Individual freedom is dismissed by the likes of you who babble about moral relativity between such regime and the West while being protected by liberal democracy’s free speech. American corporates, like all businesses, are greedy and many have lost their pants in their naïve pursuit of the illusory China market. That’s their capitalist nature. The US government has now imposed sanctions and measures to prevent further theft from China. That’s its governance job. Every time the Free World encountered some major crisis, the simple minded would pop up to call it the end of liberal democracy. The Great Depression lent rise to Fascism, Nazism and Communism. But the will of the free eventually won. We continue to see the pendulum swing right-left left-right and each turn produces pronouncement of the death of liberal democracy. It is so banal. Social policy in the West may swing but the basic tenets of free elections, free speech and free press do not. Individual freedom is the only sacred thing people will die for. The rest is noises. Changes on the world map testify to the collapse of totalitarian polities in the last century. Remnants like China have re-emerged thanks to liberal democracies’ markets. Cut them off and force them to play by the rules and they shall. As to Beijing's military adventurism, maybe the US might have to fire the first shots.
You talk in generalizations and generalizations mean nothing. You obviously know nothing about Chinese culture except to argue from the perspective of the 20th century. China is a 5000 year old culture. America is 250 years old and only exceptional because they survived WW2 intact. There is nothing inherent in the American individual and culture that makes them exceptional. It is just patriotic bravado. If America had been decimated by war, we wouldn’t even be talking about American exceptionalism. I live in North America and democracy is overrated. I am Caucasian with a Chinese wife and unless your life experiences include more than biased Western views then it is obvious that you are the reality denier. I agree that China is a police state, it has been for their entire existence and it serves their culture and civilization. The Chinese are proud of their history and culture as much as America and any Western nation. If you talk to the average Chinese man on the streets of Beijing or a village in Sichuan province, their view is that their leader is a benevolent dictator. The majority of Chinese would not change their cultural and political structure. You might argue they would but you view this through an American point of view. The pursuit of happiness supersedes democracy. Most of the important aspects of life in the West are available to the Chinese citizen. This is where your glaring ignorance is most apparent. You have obviously never lived in China and I doubt you even have good friends who are born in China. The middle class in China pursue happiness in the same way people do in the West. Chinese citizens are free to travel to other countries and do so regularly. In fact, Chinese citizens are more likely to travel abroad than Americans. They return to China because they have satisfying lives there. Maybe you are not aware but China’s purchasing power parity exceeds America’s level. With the decreasing middle class in America and more people falling into lower socioeconomic levels or poverty, the average middle class individual is better off in China. I know you will argue that you can’t criticize the Chinese government but the vast majority of Chinese just don’t care because they are pursuing their view of happiness. This is where democracy is so overrated because most Americans also don’t care about what their government is doing to cause them to take any form of political activism. Your view of individual freedom is what the government sells you but it is a suckers’ argument. The pursuit of happiness is what is of paramount importance and what people will die for. The seven hundred million and counting Chinese citizens who have been lifted into the middle classs and beyond thank the Chinese government for their wellbeing. You don’t know what you’re talking about when you say they all want to leave and talking in silly generalizations like that just underscores your lack of understanding about China and its citizens. Your comments are from an American and Western slant and make sense in an effort to try and preserve American and Western hegemony. Economic sanctions and tariffs against China will make little difference and suggesting a boycott of Chinese goods is now impossible. Imagine a Walmart, Target or any other retailer without Chinese goods in it. It has come to the point where it is virtually impossible to not buy something made in China on a regular basis. Furthermore you dismally fail to understand the growing lower socioeconomic class and poor in America who could not survive without purchasing Chinese goods. Asking them to boycott China is essentially asking them to further suffer. Democracy means little to these classes of people when adding the burden of additional financial hardship. My “babble” about the morality of individual freedom is determined by what is best for that society and culture. Who puts forth the concept of individual freedoms as if it applies to everyone. And please don’t say it is in the Constitution or somehow endowed by what is written in the Bible or espoused by Christianity. Blind dogmatic arguments hold little relevance to me and I suspect the Chinese government. Critical thinking, looking at issues from another person’s or culture’s point of view and pragmatism supersede any talk about individual freedom. The pragmatic argument is that individual freedoms are not an all or nothing ideal. The Chinese government gives its citizens individual freedoms to pursue capitalism and raise their standard of living, travel within China and to other nations, seek education, use state-sponsored healthcare, drive, etc. Free elections, freedom of the press and unfettered free speech only matter to a few but the pursuit of happiness (and materialism) is available to all. Ironically the ability of government to say slap 200% tariffs for say a period of 10 years is more likely to be sustained by a government like China than America. The possibility in a democracy with free elections producing such a mandate against China particularly now, given the state of polarized political parties in America is not even remotely based in reality. Furthermore it is so far fetched that the American consumer could even consider a politically chosen self-inflicted economic suffering for ten years defies any semblance of logic. Capitalism and greed rule the American electorate irrespective of the type of governance. The Chinese have a quiet joke about how America and the West would tolerate suffering. While hundreds of millions of Chinese still vividly remember famine and going to bed hungry, Americans will complain if they only have one TV and have to take public transit. My point is that the West and especially Americans will give in long before China capitulates to any economic threats. You are a fool’s fool if you think otherwise.
You keep going around in circles and try to avoid the facts I lay out squarely on the table. All your regurgitated points can be rebutted by re-reading my previous comments. I don’t favour any particular culture, West or East or North or South. I favour individual liberty and this comes directly from liberal democracy. I don’t care about how old certain cultures are. Thousand years of Chinese or Egyptian or Latin or Greek or fifty thousand years of Austro-mongoloid history means zip. A great culture would never countenance breaking little girls’ feet as part of social norms. This is not to single out China’s perverse history but to highlight the fact that all cultures have had their periods of absolute barbarity. Hence, traditions and cultures must be feared and checked in remembrance. Human liberty is the only thing that counts. It prevents repeat of barbarianism that humans are prone to sink to. The way to keep barbarity at bay is to ensure checks and balances in governance. Freedom of speech, of the press and of association. The US model is not perfect but it’s among the least dishonest as it’s based on individual liberty. It’s designed with human moral frailties in mind, not framed in mind-numbing nationalistic culturalist superiority that the CCP is trying to whip up and you seem to be grovelling to blindly. It’s people like you who live in liberal democracy apologising for “benevolent” dictators that pose risk to humanity returning to inhumanities of the past. They are benevolent only for as long as there is a liberal democracy with sufficient military power to oversee them. As you admitted, China has had a good run in the last 40 years because it scuttled Maoism and adopted capitalism. Nations that have managed to make ends meet for their citizens have all converged to the free market system. Their happiness has gone hand in hand with this switch. The issue is how long before some of them, now wealthier and more capable militarily, could go down the mistaken path of believing the bulldust that their prosperity has come from anything but, and risk war against liberal democracies. They underestimate the latter’s strengths at their peril, just as we underestimate their capacity to harm us at our peril.
It is clear that we will agree to disagree. Pointing out flaws in Chinese conduct can be equally countered by American societal injustices....I don’t see school children being murdered weekly in China, I don’t see people dying because they have no healthcare in China, I don’t see China invading other countries for financial gain, I don’t see China using ridiculous religious ideology to shape political policy, I don’t see China ignoring the warnings of the scientific community and the list goes on. Cultural issues can be argued equally on both sides but I am preparing my family and two half-Chinese sons to flourish in a world where China dominates, already economically and eventually in all other aspects. There is a reason why the reading and writing Mandarin classes my sons take are full of Westerners. China will return to its place of dominance and the only way America can delay this will be using military force. Aside from possibly Britain, I highly doubt that other Western nations would support and be involved in such an endeavour. Western countries are already preparing for a world where America is no longer the dominant force. From an economic point of view this has already happened. With what has occurred recently, the EU countries can hardly be called upon to be reliable allies to America. China will cut their own deals with the EU leaving America to fend for itself. Divide and conquer has always worked in global diplomacy and China has the financial clout to weather any singular American efforts. You can hope for the best but the real question is what are you doing to prepare yourself and your family for your worst outcome? Like I said before, learning Mandarin would serve your children well in the future global economy. Don’t let narrow mindedness cloud your judgement as you age. The benevolence of the Chinese government has nothing to do with American and Western views. The greatest fear of any nation is civil rebellion and in this regard, increasing the wealth of the average Chinese citizen is the best way to prevent this from happening. All your comments stem from a narcissistic, racist and selective way of thinking to justify your arguments. Hoping that things work out for the best may make you feel better but I ask you, other than words, what are you really doing to back your argument and protect your children’s future.
By the way, I couldn’t stop laughing when you said that the American system is among the least dishonest because of individual freedoms and liberal democracy. This very ideal propagates dishonesty because there is no accountability to an over-arching cultural structure. The culture being of paramount importance above the individual is the very structure that has guaranteed the survival of an intact China over the millennia. The survival of the group is far more important than preserving individual freedoms.
Again, you are avoiding facts. You can sing the praise of China but I don’t see you living in China, only preparing for a “world dominated by China” – you mean staying where you have local liberty but hoping to receive financial crumb from a distant China? You list the social problems that occur in America and dodge the deaths and persecutions under the Great Leap Forward and Cultural Revolution and Tiananmen Square and what’s going on since including in Hong Kong. That’s Mob rule for you when you ignore individual liberty and get sucked into the “higher purpose” dogma. It’s the rubbish that not that long ago brainwashed children into denouncing and prosecuting their own parents en masse for bourgeois sins in the streets of China. China’s economic power depends on the US market. Same, though to a lesser extent, applies to the EU, which is also a net seller to the US. You cannot have two big net sellers ganging up on the buyer. If the buyer doesn’t want to buy, are the net sellers going to outsell each other, to one another? In this instance, the buyer can choose to strategically split the sellers, not the other way around. The US can cultivate the supply chains from the emerging economies for low priced mass consumer products. China knows this and has been setting up manufactures in those countries to go through the back door, causing the US to target “effective” China made supplies. One way or another, America’s poor will continue to get their products, just less of them China made. The CCP, with its narcissistic, mercantilist and mercenary approach, has been rushing out to buy and steal and annex everything it considered useful to it. This is very different from the notion of peaceful interdependency from trade. The West had been hoping that the CCP would loosen up China politically along the line of Singapore and the Chinese Diaspora. But the CCP has gone full circle. It is now returning to its roots, the Mao era, lodging CCP commissars inside business units, state owned or private, the way Mao did its ground level army units. Be prepared for the implications.
Where I disagree is that it's not China (meaning PRC) or the USA-NATO West. It's actually the non-Soviet regions of Asia, including India, Korea, Japan, Malaysia/Singapore, Thailand, Philippines, etc, and the West where you have similar business/economic practices in terms of how modern post-war societies work. And yes, even in that world, knowing Mandarin is helpful, as it's still an important language in terms of international relations with Chinese diaporas within and outside of PRC. And there are Chinese diaporas everywhere. PRC, as it's moving forward, is becoming more and more autocratic (moving away from Deng) where in effect, those who've accumulated resources, would rather move their capital through Singapore and other more western leaning locales to prevent capital confiscation via random acts of nationalization, which occur rather frequently in mainstay totalitarian communist (or ex-Soviet) countries. You can even say that Singapore, with its 75+% Chinese ethnic population, as an independent English speaking "China" within Southeast Asia as a lot of Asian ex-pats have used the island nation for their private banking services. So instead of thinking of China as some solo isle of inhabitants on a continent, think of Asia as a continent of many ppls, all trying to come up in the information age, as global competitors as well as loose allies with the USA. Remember, even after the Vietnam War (with the USA in the 60s/70s), the Vietnamese fought PRC to keep them out of Southeast Asia. They were not about to accept unbridled PRC rule over their territories. Those sentiments still echo throughout the Asian continent among its other peoples and countries.
This kind of article is laughable. The author presents a fairytail of an exceptional economy "first" of it's kind (emerging economy) that is different from all others and where all the indicators of malayse are dismissable... or don't apply. So nice... No 2500 characters would sufice in destroying this intellectualy dishonest article. It should be enough to say that where China stands today other asian countries ( from other geographical locations) have been, simply because many other countries one day were emerging economies... China is not the first emerging nation to become a great power. Japan was the first of the previous countries to do so and ROK the second. If he means of China's size, it's a true but meaningless statement. Second, corruption spured growth not staled it. The author is so cynical as to say something like this. And worst still this is an half-truth at best wich is worst than an outright lie. The reason is that the growth spurt from corruption is the same as to naming tax evasion as economic activity. Like corruption, tax evasion and other cheating promotes misallocation of resources wich ARE contrary to sound economic management and policy and healthy investing environment. This hurts investment and therefor growth more than the short term increase in "activity" that corruption/cheating promotes. But keep in mind that apart from corruption, China engages in ALL other cheating economic and trading practices... So, the bad effects are wide and mounting. Debt of the kind and magnitude that plague China today is not a measure of the investment made but rather a measure of the waste of scarce resources (that were not for the anti moneyfligh measures imposed by the government would have left the country) that should be invested in a rational and market oriented way. The point is that the debt is rising AND acumulating much faster than economic growth wich means the returns are being squeezed by the costs of servicing that debt. So much could be said, but it would be a waste, for it is evident that such an well known and prestigious entity like Carnegie allows for such rubbish article to be published.
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