“...1.4 billion Chinese and one billion Indians have decided to be capitalists...”
A good article except for this line.
The ChiComs are first and foremost totalitarians, and they stated as much to the Soviets who helped establish their central powers. When it came time to set up the economy, they told the Soviets, no thanks, we see what your country’s economy is. We’ll use Capitalist principles with wealthy nations to be wealthy.
But true Capitalism must entail freedom to choose (as Milton Friedman explains in “Free to Choose”), otherwise it won’t last.
I’ve heard stories (purely anecdotal, I know) of 50-story buildings in China that are completely empty save for the ex-farmers who came to the city for work and are now squatting in them. If this is true and China’s economy is propped up by stimulus, I don’t know how the major nations of the world can avoid world war to wipe their debts clean.
If they do not keep it up, they face massive uprisings. Not necessarily led by one group. Several will spring up in China. Peasant uprising have long tradition in history. It is usually massive and quite destructive. The current communist regime was one of them which succeeded in taking power.
The regime truly fears that any relenting of economic drive would lead to collapse of communist rule in China, followed by a civil war. So they have as much motivation or more to dump money into economy as D.C. and Wall St. do in U.S.. Their necks are literally on the line.
The question for Chinese regime is how long they can throw stimulus money, hoping for the best, and when they turn their totalitarian apparatus into action, if it fails.
For now, I suspect that they are wishing that somehow global economic climate would improve without U.S. recovery, and they can dodge a bullet. What else could they do? The alternative is just too unpleasant to them.