$123,000,000,000,000*

I'll speak as a 1.5 generation Chinese-American. Do I feel a sense of pride that the country of my heritage is moving up from a country of starving Maoist farmers? Of course, it's only natural. But realisticially speaking, I think China could reach a GDP per capita of around $20000 and taper off, reaching an equilibrium of a rich developed coast and a low-middle-income developing interior. As someone who's had multiple trips to China and family that lives there, I can personally attest that the "hidden markets" the author talks about is real and HUGELY underestimated. Even in the rural township where my mother's family lives, there's more businesses opening up (private, not state-owned) than ever, from street-car vendors to IT firms.
I think that most China-watchers here in the West tend to either believe that China is going to be a superpower or collapse in 50 years. The truth, as most of us ethnic Chinese believe, is probably somewhere in the middle, probably leaning towards the former rather than the latter. There's a general feeling, among the Mainland Chinese and us in the Diaspora, of happiness and pride in our development as a people. While it is far from perfect, it goes a long ways to healing the scars of our recent history (i.e. post-imperial anarchy, Japanese invasion, civil war, famines from disasterous Maoist policies, Cultural Revolution, etc.). That's not hubris, that's just being human.

Bob, your underlying compassion is appreciated. But for reasons we refrain from speculating on, your idea of what's "natural" seems to unduly stress your ethnicity and facile emotional ties, rather than reflecting upon whether the increasing wealth of the upper 20% of Chinese society (many of whom have entrenched interests in maintaining the political/educational status-quo) will benefit the remaining mass of Chinese or the world. I suspect it is this consideration that Allan alluded to accurately stating that China will increasingly demand recognition even if (and especially if) its economic drive suffers setbacks.

Whilst I would agree that hidden markets do tend to be generally underestimated in China, I believe it's the result of fact that many if not most of the businesses in such markets are unprofitable holding points for the unemployed (think xiao mai bu), as well as the fact that a significant number of them appear to be started on the basis of local dumping. Vendors lay hold of a stock of inventory at a low price (often through dubious means) and proceed to open a distribution point with little or no awareness as to how business should be operated. Look around at the number of business foreclosures in major cities. Surely one the main reasons President Hu emphasized the necessity of entrepreneurialism is tactical and not strategic: entrepreneurialism keeps people busy, consumed with their own endeavors, even if they fail. That, at the very least, ameliorates pressure on the employment market.

"Bob, your underlying compassion is appreciated. But for reasons we refrain from speculating on, your idea of what's "natural" seems to unduly stress your ethnicity and facile emotional ties"

Hitomi, I'm just being honest here. As honest as I can be. We can talk anthropology, psychology, and sociology, about the tribal behavior of hominids, but that would be digressing. However, I'm not going to pretend that I or any other human being on this planet base all their beliefs and views purely on logic and reason. These "facile emotional ties," however irrational, play a huge part in who we are. We're not Vulcans.

"rather than reflecting upon whether the increasing wealth of the upper 20% of Chinese society (many of whom have entrenched interests in maintaining the political/educational status-quo) will benefit the remaining mass of Chinese or the world. I suspect it is this consideration that Allan alluded to accurately stating that China will increasingly demand recognition even if (and especially if) its economic drive suffers setbacks."

A generation ago those same upper 20% were just as poor as the rest of them. Economic development is incremental, you can't expect 1.3 billion people to go middle class overnight. China's development is already exceeding expectations. So China has lots of poor people. China always had lots of poor people, but now it has a sizable but growing middle class, not so different from a lot of countries at this stage of development. If poverty and economic disparity is a crime, then you might as well condemn the entire developing world.

Sure there are setbacks, there always are. But the overall trajectory looks good. If China was meant to stay poor or implode, it hasn't happened. We can predict China's downfall until we are blue in the face, just as people have done in the past 30 years. If (and that is a stretch) China does collapse, I'll buy you a drink.

"Whilst I would agree that hidden markets do tend to be generally underestimated in China, I believe it's the result of fact that many if not most of the businesses in such markets are unprofitable holding points for the unemployed (think xiao mai bu), as well as the fact that a significant number of them appear to be started on the basis of local dumping. Vendors lay hold of a stock of inventory at a low price (often through dubious means) and proceed to open a distribution point with little or no awareness as to how business should be operated. Look around at the number of business foreclosures in major cities. Surely one the main reasons President Hu emphasized the necessity of entrepreneurialism is tactical and not strategic: entrepreneurialism keeps people busy, consumed with their own endeavors, even if they fail. That, at the very least, ameliorates pressure on the employment market."
----
There is zero truth in your statement. Zero.
China's private sector is the fastest growing sector in China, somewhere between 30-50%, faster than any other sector in China. The government, both central and local, actively discriminates against private companies in favor of their pet state-owned companies, which despite the fact doesn't do as well. In fact, private industry has always outpaced China's GDP growth, and it's common knowledge that China's economic growth wouldn't be half of what it is without the private sector. The free market, though sometimes unseen, works in China. To say that Chinese entrepreneurs don't know what they are doing and is destined for failure, is not only blatantly false, but insulting as well.

Bob, I admire honesty, but honesty by itself doesn't justify anything. Yes, you could talk about tribes or you could talk about state inculcation, reaching down to the level of familial structuring. The JunJunChenChenFuFuZiZi works both ways. Still, one doesn't need to be "purely" logical to recognize that emotive ties may occlude an earnest assessment of China's situation.

"A generation ago those same upper 20% were just as poor as the rest of them."

Yes, and as you noted above, those people were also made poor through the machinations of Maoist policy and a political body that still holds power and defends Mao's legacy (and frequently his tactics) today.

"Economic development is incremental, you can't expect 1.3 billion people to go middle class overnight."

I don't. But judging from the income disparity we are seeing, at least 1 billion of them never will. Many privileged Chinese know this and fall back on your next statement to succor themselves (and in a far more insidious way than you do, I think).

"So China has lots of poor people. China always had lots of poor people"

Yes, but try not to let the narrative of perpetual suffering, emotive though it may be, obfuscate real differences in relative poverty. China's GDP per capita prior to the Opium Wars ranked 23rd in the world, and even in 1950 its position was 45th among nations. The disastrous decades that followed drove China precipitously from a state of relative poverty to absolute poverty, all under the direction of the CCP. To a point where even after 2 decades of blistering growth, it still ranks below 120th today. I think it's important not to gloss over that account.

"If poverty and economic disparity is a crime, then you might as well condemn the entire developing world."

That depends on how much of it is planned.

If anything hits the fan in China, I'll be in the thick of it. So save your nickel. I'll gladly buy you a drink if we all make it safely through.

"China's private sector is the fastest growing sector in China, somewhere between 30-50%, faster than any other sector in China. "

Well, with a GNI ratio of $16 per $100 (as of what, 2006?) of GDP--it would have to be, wouldn't it?

And why isn't anyone talking about this statistic? Is Nationmaster so wrong?

"To say that Chinese entrepreneurs don't know what they are doing and is destined for failure, is not only blatantly false, but insulting as well."

You may choose to be insulted, but there are clearly many of them who do not, in fact, know what they are doing. Even when they get a cart-load of extra-prints from a garment factory. Frankly, Bob, it really shouldn't be that surprising. The Chinese aren't a mystical people destined for perfection. I know a lot of entrepreneurs who do just fine, though it might also be said that many of them are concerned about government pressure to takeover their businesses.

"The free market, though sometimes unseen, works in China."

And markets that cannot be seen prove the free market isn't free.

Additionally, the market in China cannot be realistically be called free until the State stops using its power over the media to threaten or pressure foreign companies with interests on the mainland. See Dell, 2005; Japanese companies, 2005; Google, perpetually.

"Bob, I admire honesty, but honesty by itself doesn't justify anything. Yes, you could talk about tribes or you could talk about state inculcation, reaching down to the level of familial structuring. "

Okay, where do I begin. The whole deal with the "getting emotional" ethnicity and tribes was a direct response to AllanGreen's comments about the "hubris" and "inflated ego" of the Chinese on their country's future. I was explaining to him why Chinese people feel the way they do about their country. It's not an endorsement of the Chinese government, it was a simple response meant for Allan that you took and added a whole bunch of subtext that isn't there.

"Yes, and as you noted above, those people were also made poor through the machinations of Maoist policy and a political body that still holds power and defends Mao's legacy (and frequently his tactics) today. "

Don't lecture me on Maoist policies. I have family members, loved one, who lived through it, some who have died. Just don't.
I want to make something clear. I have never, EVER in my previous posts defended or endorsed the Chinese government. I'm not a fan of the CCP, and I think there needs to be some serious political reforms and I would be the first in line to throw my self in front of a tank if I knew it made a difference. However, I'm also not a fan of people weasling in arguments that I have never made nor intended to make.

"I don't. But judging from the income disparity we are seeing, at least 1 billion of them never will. Many privileged Chinese know this and fall back on your next statement to succor themselves (and in a far more insidious way than you do, I think)."

I think you missed out completely on the point of my argument. Re-read my original response to AllanGreen, when I said: "realisticially speaking, I think China could reach a GDP per capita of around $20000 and taper off, reaching an equilibrium of a rich developed coast and a low-middle-income developing interior." That was just my practical guess (before you start chastizing on how wrong I am), maybe what you heard was: "I am Chinese everyone is going to be rich in China forever!" THE POINT OF MY ARGUEMENT (so you don't miss it this time) was that there was everyone seems to miss this HUGE grey area between "oligarchy smash proletariat, China will never amount to anything" and "China rises, everyone else falls." You're right, there is a lot of stuff wrong about China and more, but you make it sound like there's no hope for China, no more room for improvement, that the past 30 years is just been a fluke. Your blind fatalism is just as annoying as the author's blind optimism, and just as likely to be wrong.

"The disastrous decades that followed drove China precipitously from a state of relative poverty to absolute poverty, all under the direction of the CCP. To a point where even after 2 decades of blistering growth, it still ranks below 120th today. I think it's important not to gloss over that account."

Who glossed over that point? Did you not see my post mentioning "famines" and "Cultural Revolution"? If you are that itching to debate how utterly craptastic the Mao years were, we can. But it'll be a short debate because all I'll repond with is "I agree."

"You may choose to be insulted, but there are clearly many of them who do not, in fact, know what they are doing. Even when they get a cart-load of extra-prints from a garment factory. Frankly, Bob, it really shouldn't be that surprising. The Chinese aren't a mystical people destined for perfection. I know a lot of entrepreneurs who do just fine, though it might also be said that many of them are concerned about government pressure to takeover their businesses. "

I know Chinese people aren't perfect, but it's not a stretch to say that there are many Chinese that are compentent enough to run a business, right? You contradict yourself by saying that many Chinese "do not know what they are doing", followed by "I know a lot of entrepreneurs who do just fine." Yes, in the Chinese population there are people who know how to run a business and people who don't, just like any other population. If Chinese people can't tell a cart-load of textiles from a hole in the ground, then why bother? Why bother with China at all. They are clearly beyond our help. Let fatalism prevail.

"And markets that cannot be seen prove the free market isn't free."

China needs more economic freedom. I agree.

Now don't get angry, Bob. You've already descended to the level of claiming a purposeful concession is a contradiction, dalliance with the caps lock device and deliberate misunderstanding.

The reason I referred to CCP rule is simply that the CCP is the most arrogant group in China (XianJinXing "advanced natures" and all that) and, not conincidentally, the group which foments Chinese "pride" most aggressively. This despite the fact that they've catastrophically lowered China's living standards and are only now finally beginning to get them back to previous levels for a small segment of the populace. Pride in this is tantamount to pride in heroically putting out a fire which you also started. However you may feel about this pride (whether "natural" or not), it must be said that it frequently comes across--in the instances of the Anti-Japanese riots, of the on-line "Masturbatory" novellas dedicated to the PLA obliterating the US army, or in the hair-stylist who told me two weeks ago that "times have changed and China will punish the US for selling weapons to Taiwan" (thank you, I'm just here for the hair-cut)--as a people and nation with an outsized idea of themselves.

I fear you've taken all of this a little too personally. Sadly, and perhaps dangerously, this often occurs with those who wish to lay claim to ethnic loyalty toward China and the Chinese.

"you make it sound like there's no hope for China"

It's not my job to determine that. Now let's step aside for others, shall we?

Have your ingroup contact my outgroup.

I know of the dangers of excess pride, Hitomi, ethnic or otherwise. Even if it's ugly I embrace it. My personally philosophy is the acceptance of all the flaws and virtues of a human being. Pride being one of them.

But you are wrong. My pride isn't on what China built for the past 30 years or 3000 years. My pride is with our propensity to endure hardship and triumph. I've alluded to some of the hardships that my own family endured and I know where I am now (a spoiled Americanized brat that have the luxury of arguing with strangers on the internet), and I'm grateful. I really am. I know I wouldn't be where I am today if not for my parents, and my parents' and so on. That's where my pride comes from. It's the act of rebuilding, to roll up our sleeves to rebuild from the ashes of history. You know how many times China was destroyed and rebuilt? Countless, history is cyclical like that. But the important fact is that we endured, like those in my family, and we will endure until the end of history. If China was filled with fatalists like you, it wouldn't have lasted a year.

I think everyone should feel pride about their nation, their beliefs, their heritage. That includes you, Hitomi. You should be proud of your heritage (Japanese, based on your namesake), be proud of the strong Japanese spirit! Sure pride has an ugly and beautiful side, but I encourage all to be intimate with both. I am proud of my heritage, my family, my beliefs, my adoptive country of America. I am proud of the human race.

God bless pride.

"You know how many times China was destroyed and rebuilt? Countless, history is cyclical like that. But the important fact is that we endured, like those in my family, and we will endure until the end of history."

I hope you are merely reflecting for that last point upon your familial lineage, because you're starting to sound a wee bit religious (and hubristic)--which wouldn't necessarily surprise me, as the ongoing existence and welfare of the Chinese State/Empire is often conflated with Chinese culture (though it shouldn't be), declared to be monotheistic (only "one" China, despite evidence to the contrary, dating back to myriad states attempting to inherit the comprehensive legitimacy and power of the Zhou), and spoken about in reverential terms (as an ersatz religion). Gratefulness for your family's sacrifice is one thing, pride in rebuilding an empire that almost eradicated them (and attempted to do the same to the traditional culture) is quite another. A more persistent and real fatalism lies in the idea of one China itself.

Wow, this is a great discussion - that's why I like Asians damn-it. Honest, and to the point, and polite, and determined.

Look, as a practicing Jew, I am rather proud of being a Jew, and I see little problem in ethnic pride. In fact, I see a problem of not having it. And most Asians would agree with me, that Whites need more of it, and Blacks, a lot less. (Another reason I like Asians).

But Hubris, is not Pride. Hubris is when you are consumed with your ego and have false expectations. Let's call it Black Pride. SUnwarranted. Psychopathic. You make demands without end, and scapegoat everyone left and right.

What I am saying is that if we keep on telling the Chinese, oh you are so good good good, and we let it get to their heads, before we know it, they'll be making nonsensical demands, unjustified by any economic analysis, or foreign policy.

We have to be tough on China for the sake of China itself, and for Global Institutions. China will have a tendency to free-ride. We need to break this trend.

Internally the Middle Kingdom needs to change institutionally, if its people are to benefit from capitalism. Anyone who is sitting there telling me that China is a miracle, either has very low expectations of the Chinese, or should stick to reading comic books.

China has no functional capitalist institutions. Sheer Chinese drive to survive and do business, is not the same thing as having a pension system, a banking system, and a regulated free market. China has NONE OF THESE.

Historically, the size of its economy is entirely meaningless. The per-capita income in China, has NEVER been higher than in Western economies. This goes for Roman times, till present. Anyone who knows the CHinese, and knows China, knows that there is still a long way to go from buying live chickens on a dirt road market and slaughtering it on the 30th floor of your concrete flat, to Singapore's Orchard Road!!

Of course China has many many things going for it. But historically, China has very poor political institution. It is in this sense, that China might consider certain "Western" models. It cannot look in its own past, so it should open up to something akin to a Swedish model. It should overcome its fear of foreigners.

I entirely understand its weariness. We all know what happened after the Yuan dynasty fell. And the Tangs basically did the same thing 500 years earlier. Point being, this time around it might be worth doing it - regardless if its foreign or not. It may be an issue of efficiency.

When these institutional changes take place - changes for which I think the Chinese are ripe, then I think we will see a better income distribution throughout the Chinese economy. But in as much as such openness will require granting foreigners access to its internal market - it is likely that a lot of the profit will logically go to Western firms, who in most sectors, will dominate the Chinese market.

And therein lies the bone. That's where China does the kicking everyone out bit.

It worked for post-War Japan. Can work for China.

To Hitomi:

Your statements would've made more sense if it not for the fact that I was grew up and went to school in the States. I'm not a product of the Chinese education system nor propaganda. My own ethnic pride is not the core of my beliefs, but an appendage to my philosophy of egoism, somewhat modified to reconcile with the tribal nature of man. These are my beliefs, based upon my life experiences and a lot of self-reflection, and they are not going to change. If they seem wrong to you, then we just have to agree to disagree. There is nothing more to say.

To AllanGreen:

I do not know if you are addressing the author or me. I know that there is a line between pride and hubris, and I have crossed it before. If I showed hubris, then it is my flaw as a human being.
However, I never expected a Chinese miracle, never thought everything was all good and fine. In fact I didn't shy away from talking about the effects of Communism and Maoism and its effects on my family and loved ones. But my objections wasn't to Hitomi's criticism of the CCP (I welcome it), but to her assertions that the Chinese LACK the potential to succeed, as if there was something genetic hold us back. The Politburo couldn't have done a better job at stifling the Chinese spirit. The economic success of the Chinese Diaspora, such as in Southeast Asia (we are called the "Jews of SE Asia" for a reason), Singapore, Taiwan, and those of us in the US show otherwise. Our success vindicates us.
So the unfortunate circumstances of the mainland Chinese is like you said, a matter of institutions. Which is why, if you saw my previous posts, I support major economic and political reforms in China, not oppose it. I acknowledge the superiority of the Western institution of Capitalism, Adam Smith is my personal hero. And I believe that these institutions would help the Chinese mainlanders achieve their full potential, which is currently being suppressed. The only thing I don't agree with you on is the degree to which foreigners have access to the Chinese market, it's one thing to encourage Chinese entrepreneurship and innovation, and another to treat them exclusively as another consumer market. Japan in the post-WII development era had an economy that was closed to the outside world.
I hope that clears things up for you.

I'm hoping China will never become a superpower because it will be a nightmare for the whole world. I'm sure, if it becomes number country, China will make the world a worse place because it will go to wars and engulf many many countries like they did in the past; the most recent one is Tibet. The next victim will be Vietnam (China is already invading Vietnamese east sea, or South China Sea), then other Southeast asian countries; I'm sure they will have confrontation with Japan and India, their traditional rivals.

"Historically, the size of its economy is entirely meaningless. The per-capita income in China, has NEVER been higher than in Western economies."

When I did my Master program a few years ago, I did a research paper comparing the historical economic performance between China and Europe. Among economic historians, Angus Maddison and Paul Bairoch have done the most work on trying to quantify this topic. However, estimating historical GDP per capita is extremely difficult before the modern era and Maddison clearly indicated this on his research that comparing per capital income is problematic in the ancient world. In the post 19th century, industrial revolution became the backbone of a modern economy, but in the ancient world, it was agricultural revolution that was generally the determining factor. This is where China enjoyed a big advantage over Europe until the 17th to 18th century. Basically because China had better agricultural technology/technique, less people were required to produce the same among of food, leading to greater overall economic productivity and resulting in larger population overtime. Of course, relative wealth difference in the ancient world was nowhere what it is in the modern world as most of the population survived on basic goods. However, it was clear that major cities in ancient China had greater access to "discretionary goods" and relatively a higher living standard than major cities in Europe.

the claim that CCP lowered china's standard of living is just western propaganda, China's economy grew at an average rate of 10% per year during the Maoist era, comparable to the growth of Meiji Japan. For more, see Maurice Meisner's "Significance of the chinese revolution in world history".

http://eprints.lse.ac.uk/21309/1/Significance_of_the_Chinese_Revolution_in_world_history.pdf

On Mangus and historic GDP data.

Sorry. You seem to have read one paper out of many. The conclusions of the Lord, since he's received a Peerage for his work, are indisputable. At no point in history did China have higher gdp per capita than Europe.

As for agricultural technology, that is debatable. If you really want to measure agricultural productivity, work hours are the driving factor. In that sense, you'll have a hard time proving to anyone that rice is not the most labor intensive grain out there.

But thanks for pointing this out. Because if there is one clear advantage that Europe traditionally enjoyed over the rest of the world, its the comparatively low investments in agriculture required to sustain its population.

The fundamental difference between China and Rome, after all, was none other that the latter was entirely agricultural, while the latter significantly urban.

Sure, Rome came and went, but compare the table of a European peasant in 1500 with a Chinese. Then talk agricultural technology.

reply to allangreen:I am afraid you will be disappointed ,because we chinese mainlander do believe that china will be the number one economy in the world in the future. The youngs in chinese mainland are full of confidence about the future of CHINA ,just like me(I am 25 yeas old) . CHINA will continue growing and developing in the future ,and guys like you will be deeply disappointed about that .
CHINA is not dangerous as what you have said, but guy like you is dangerous .Beware of AMERICAN hubris , and donot feed it .

David Deng, with exactly what the previous posters were talking about: the same Chinese hubris we inflate by even covering their economy.

glad i saw a ray of sanity here. yeah, i do hope the era of these narrow-minded economists, that worship the of "growth of GDP" so devoutly that they forgot that GDP is supposed to serve the people, and not vice versa. Quality of life and that elusive concept of "personal happiness" is the key issue. Not much of that here in China.

...he failed to not explain how China will avoid the same demographic problems, he described Europe haves, I mean one child policy and deficits of women, must show its negative effects sometime, the pre one child generation cant work forever.

Besides if sex for fun and strolls along the seaside or riverside are bad, then Chicago must be a boring place to live

The real issue, at least for the USA, will not be the state of China's economy but will our economy be able to provide meaningful economic opportunity for 500 million? We are already having trouble finding meaningful employment for 1/2 that number. Retail is hugely overbuilt, we could close 1/2 our malls tomorrow and we'd still have more than enough retail capacity. The so called service industry is due for a sustained period of employment reduction like manufacturing was in previous decades. Office cubicles are easier to off shore than factory production lines and many so called "knowledge" jobs are going to be automated even faster than production work. It's simpler to write software code than to build an robotic production line. Lets face it the "Office" is a model of efficiency compared to many real life offices and how many people in either are actually doing something productive? I am hoping that we never will reach 500 million as there are indications that immigration into the US has slowed down in pace with our economy. The real winners in 2050 are going to be countries like Canada and Australia not overpopulated giants.

The reason the US might get to 500 million is because it will continue to offer both economic and social opportunity to people from all around the world, while maintaining a slightly above-average birthrate. I would not agree with your statement that the US can't find 'meaningful' (whatever that means) employment for its current population of around 311 million. The US currently has a high unemployment rate, but if the past is any guide, it will soon provide new opportunities for its citizens, as it always has. I wouldn't use a TV sitcom to serve as a guide to how the American economy actually functions -- if you want to see corporate white collar inefficiency, try spending some time in Japan, or these days, China.

That is not to say that the US doesn't have massive problems and that there isn't at least the possibility of it all going badly wrong. In fact, the biggest danger the US faces is the passivity created by a sense of 'no matter what we do, a glorious future is inevitable'. On the other hand, that is exactly the same risk that China faces, and they have many more problems than the US. On a larger canvas, while the US has massive problems, they look manageable compared to the problems facing the both the other already-developed countries (Europe, anyone?) as well as the emerging nations such as China. So, it is probably not a good idea to bet against the US.

Meaningful employment is employment that provides a "living wage" which we usually think of in this country as that which supports a Middle Class lifestyle, not luxurious but comfortable. In other words not your typical Walmart employee. Median family income has been stagnant in this country for a long time and the only reason it hasn't gone into decline is because now most families have 2 people working instead of 1. We are slowly sliding back toward the "good old days" where a few people controlled the majority of the wealth. Call it freemarket or whatever but it also means a lot of poor insecure people.

Well, I don't even know what that means. I do know that the poorest Walmart employee has more material, 'middle-class' goods than most people in other countries. The use of fuzzy terms such as 'meaningful' and 'middle-class lifestyle' are essentially meaningless and useless.

So it doesn't concern you that the largest US employer is now Walmart instead of GM? GM employees are full time, have medical coverage, have retirement plans and in most cases can afford decent housing and to educate their children. I doubt if we can say the same about the majority of Walmart employees. It is also a meaningless statement to say that someone making minimum wage in the US is better off than a rural peasants in other parts of the world. So what?

a lot more if GM still had more employees than Walmart. The largest retailer in the world is vastly more important to the economy than a second rate auto builder. GM managed to bankrupt itself by agreeing to an unsustainable amount of benefits for its underproductive workforce, while asking the US government to force the Japanese to 'voluntarily' restrict the imports of their (much better) autos instead of competing fairly. This idea that many people buy into about employees getting a free lunch -- health, medical, dental, and retirement benefits while not having to compete in the free market, is illusory. GM is bankrupt partly because of the unsustainable benefits they provide their workforce. And good riddance.

Wal-mart is a great company, and by all accounts treats its employees well, but it also treats its employees like adults -- people are all responsible for funding their own retirement benefits, one way or another, and the idea that some Daddy Warbucks, in the form of GM or the US Government, is going to defy the laws of economics by ensuring that each of us has a confortable retirement that we don't have to save for, is just an illusion. So forget about GM -- that world is dead, and its union contracts were the problem, not the solution.

Agree with everything you have written. If China plays its cards right, it is destined for semi-prosperous middle-income territory. Unfotunately, it is possible that it won't even get there -- the risk of overreaching is high, and a government that doesn't trust its own people isn't likely to liberalize enough to allow the consumers to drive the economy -- as they eventually must. A large, relatively poor, unhappy and aggressive China is the real concern 20-30 years from now.

I am sure that some people will read this and conclude that the FP comments are populated by a bunch of China-bashers. Nothing could be further from the truth. I currently live in China and wish the Chinese nothing but the best. But, repeating mindless dreams about China's eventual world economic dominance, while perhaps pleasing to the ears of some Chinese, is no subsstitute for a consideration of hard economic realisties.

It is not suprising for someone without intimate knowledge about China to say in that country "There is no social safety net, not even in healthcare. There is no consumer culture. There is no higher education. There is no sustainable niche in the world economy. In short, basically every structure that china would need to exist as a first world economy does not exist". The funny thing is, when someone who claims to be a resident in that country, he "can't agree more" to every word in that statement. Basher or not is not a problem. It could be totally justified if the situation there deserves to be bashed. But is the situation there really like that? We may skip the issue of social safety nework and all because you hate any vagueness in defination, but as a concurrent resident in China, have you ever seen any sign of exisitense of higher education at all? Where do you live in China?

I am having a difficult time understanding your question, or determining if you are really asking a question at all. Are you taking issue with the poster's statements about the Chinese social safety net (nonexistent) or universities (poor), both of which statements I agreed with -- and both of which are pretty objectivly verifiable? Are you doubting whether I really live in China (yes, and spend a lot of time in the major cities)? Are you accusing me of 'China bashing' just because I don't buy into Robert Fogel's (pretty easy to identify) nonsense? I don't understand what you mean when you ask whether I see any 'existence' of Chinese higher education at all (obviously, there are millions of Chinese in universities, and China has a great academic tradition -- but you can't be asking that question seriously)? What is YOUR point?

Andrew, are you kidding?

I believe that Acer PCs are actually manufactured in Taiwan, which, contrary to the claims of Beijing, is not part of the PRC.

Maybe.....

.....they will capture a resource rich astroid, because they sure won't be getting the resources necessary from the planet Earth.

Even in junior school we teach children the foolishness of extrapolating from a small base. This idiotic puff piece ignores all the negative factors and simply fails to mention any limiting factors or approaching discontinuities. I am staggered that this passed even a low level sub-editorial, let alone editorial review.

Perhaps this is really some sort of intellectual 'internet Trolling', designed to make us angry and say silly things?

Anyway, if I was the editor, I would send the writer back to re-write this after they have properly considered these factors:

1 - food growth v population growth
2 - natural resources (specifically bearing in mind China's August 2009 actions in respect of rare earth metals and lithium)
3 - water limitations
4 - environmental degradation (and the positive feedback of that on 1, 2 and 3 above)
5 - international competition
6 - market factors
7 - access to capital (and capitalist institutions to support growth)
8 - the huge regional political tensions building up under the surface, one's that may well tear China into pieces
9 - international political backlash (for instance over Chinese land and resource grabs in Africa)
10- simple civil discontent

This article would be rated 2 / 10, and only gets 2 for starting the discussion of an important area.

1. China is short of many natural resources, and must import vast quantities of iron ore, oil, etc.
2. Chinese population growth is essentially flat, due in large part to the one child policy.

It isn't "China bashing" to attempt to look at facts objectively. In addition to having access to the statistics and available facts, I work in China and have a lot of experience dealing with the graduates of Chinese universities -- even the fairly elite ones. Their general levels of education and ability to problem solve are pretty poor by Western standards. Unfortunately, the society is still so crony-ridden and based on 'guanxi' that one's actual education rarely seems to matter in getting a job -- it seems to be more about who you know than what you know. China has a great academic tradition and will certainly make progress in this area, but it will take generations to raise the general standard of university education to a 'Western' level. More importantly, there is always the danger of China slipping back since -- as Google is finding out -- China's leaders view knowledge as a dangerous thing that needs to be managed. So, China's rise to world dominance is hardly pre-ordained, any more than it was in say, 1919.

More broadly, Fogel is simply a fool...any undergraduate would know better than to engage in the simple minded extrapolation he indulges in. Probably, he is either senile, or, as a former communist functionary, truly believes that a totalitarian/authoritarian dictatorship has some inevitable advantage over a more open society. If the latter is true, there is, to put it mildly, not a lot of evidence to support the thesis.