Get set for a totally new China

The Straits Times (Singapore) ^ | 2002-08-09 | By KENICHI OHMAE

[AIG]

Unlike Japan, China's GDP potential is not limited by population size.

[AIG]

Every great economic power in history has also had a big military, merely to protect its farflung economic interests.

[Quix]

BUMP FOR FILES LATER

[PoorMuttly]

Wow, that's a heck of a growth rate. Amazing. So is this good...or just more dangerous?

[AIG]

Capitalism is going to do whatever it wants to do.

[WRhine]

Time to take the chains off the Japanese military. Reviving the capabilities of the second largest economy on earth would create a perfect balance to the growth in China.

China does need a real military threat in their backyard to keep their aggressions in check. The only downside I see on this is if the two countries join forces against the West...that is something to think about.

[11B3]

As China modernizes, the rural worker is being displaced by the millions. Estimates are around 150 million of these workers in the next three to five years. Combine that with bad loans within their central banking structure where the state owned enterprises can borrow money without ever paying it back, and you have a set of "cooked books" that makes our corporate scandals seem pretty insignificant. In reality, not propaganda, their economy is far less stable than they want you China cheerleaders to know.

It's almost like taking a nation of extras from the cast of Deliverance and having them all win the lottery. They've got money for the first time ever, they've got no manners, they're racist as hell, and they figure that since they're Chinese whatever they do is OK. Not here. Even though their civilization has been around a long time, when it comes to the industrialized first world they are the new kids on the block. Rich, trailer trash new kids. To hear an American speak highly of them is nearly seditious - they are the greatest threat that this nation has ever faced, and it will come down to either them or us eventually. If you choose them, you know where to go.

[Mr. Mulliner]

You really see China as fitting a pattern here? I don't.

[AIG]

Today, Moody's gave authoritarian China's sovereign debt a "Aaa" (very high) rating, while the IMF had to bail out democratic Brazil with the biggest bailout in history. Not too long ago, the IMF had to bail out democratic Turkey as well. I don't deny that China's banks have problems, but the difference between China's authoritarian government and the dysfunctinal Third World republics is that China can use authoritarian power to effectively pass economic reforms to address its problems while legislative gridlock paralyzes Brazil and others from addressing theirs. Moody's cited China's continued "pragmatic" approach in implementing economic reforms.

The whole issue of China as a threat is something Americans should grow out of. China is here to stay regardless of what anyone thinks. In a few decades, most of the Fortune 500 will actually be getting most of their revenues from China rather than America itself. At that time, it's nonsensical for them to be fighting any war with each other.

[AIG]

What do u expect? China to voluntarily choose not to have any military? Even the smallest country on earth (Brunei) has a military.

[AIG]

Peasants moving off farms and into cities is an essential part of the process of industrialization and urbanization and the development of a middle-class. The US too was mostly rural about 100 years ago, but as machines replaced workers on farms, peasants moved to the cities, got jobs, and formed America's middle-class. Any First World country followed a similar pattern. China's doing that now. Peasants getting displaced is part of the process. And workers getting laid off from China's state-owned industries is part of the process of China's move toward a decentralized, capitalist economy. Labor unrest is a sign of how seriously China is trying to de-nationalize its economy.

[hove]

What a pile of crap! China is communist. As long as they are communist , they will a dangerous third rate power. As long as they are under a totalitarian government, they will command zero respect. Now if they embraced a US style Constitution and Bill of Rights.....watch out. They could become a very powerful and respected country.

[AIG]

Has India, Indonesia, or Russia become mirror images of the US yet?

[AIG]

Foreign investors are scared away by the political and economic chaos in today's Third World republics, by and large. No wonder China gets the bulk of foreign investment. Today, democratic Brazil needed to get a $30 bil. IMF bailout.

[Torie]

Unless and until China manages to find away to allocate capital efficiently (it doesn't now, and its banks are all insolvent big time), China's road to becoming a super power will be long one. Still, it will gradually become a more important player, as will India. That is inevitable.

[goldstategop]

The free market in China goes under the official euphemism "socialism with Chinese characteristics." The Chinese Communist Party's embrace of entrepreneurs and getting rich and building a society that can truly feed, clothe and house its people through private initiative sounds truly progressive compared to the Democratic Party's demonization of businesses and the free market here at home. We could learn from the Chinese that the free market has worked everywhere its tried. The more one thinks about what socialism is in China, the more one likes what one sees. Oh if only we could unleash the free market like this right here in the USA!!!

[antidisestablishment]

bump for later read

[Action-America]

Having run my own import/export business, dealing with businesses in Far Eastern countries, until only a couple of years ago, I can tell you something that the above article fails to mention.

Although, Communist China is actually allowing more and more private enterprise, they still have a long way to go, before they understand capitalism.  One thing that importers must do, when dealing with Communist China, is to work through an agent in one of the nearby Asian countries (Taiwan, Hong Kong, etc.), who insures that the importer gets what he ordered and takes a commission for his service.  This obviously adds to the cost of the imported product.

But, if you do not go through an agent, instead of getting the 100,000 sky blue widgets that you paid for, you may end up getting 80,000 sky blue widgets and 20,000 baby blue widgets, because they ran out of sky blue dye.  If you try to get the manufacturer to make good on your order, they will just blow you off, saying that all 100,000 widgets that you received were blue and that the difference in color is only slight and not worthy of a refund or replacement and the Communist Chinese government will support them, unless your company is large enough to cause them embarrassment, like Coca-Cola or McDonalds.  They just do not understand that contracts must be adhered to in every respect.

And that's just the beginning.  There are many places where the Communist Chinese fail to understand the most basic principles of capitalism and competition.  That's because they grew up in a country where competition and contracts between companies did not exist.  All companies were controlled by the government.  It will probably take at least another generation or two, before the younger business people in Communist China will be able to accept those basic principles as a requirement for doing successful business.

In the mean time, the low price of their products will be bumped up by the cost of having to go through agents, to check shipments, before any money changes hands.  They cannot become a major force, until a large number of their companies learn these basic principles and that will require that most of the older Chinese businessmen retire.