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05/26/2013

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Thomas Rekdal

Judge Posner outlines, accurately enough, most of the negative factors affecting China's economic future. Most of them relate to imperfections in governmental structure and poor policy choices. Historically, this has always been China's dilemma: bad government (much of the time), magnificent culture (all of the time). It is no accident that all of the powers conquering China have eventually been absorbed into its culture. Nor that countries embracing a large overseas Chinese population find their economies enlivened.

There is something about Chinese culture that nourishes the entrepreneurial spirit, and something about the Chinese family that nourishes talent and saving. While family structures in the West continue to crumble, most Chinese families think of the next five generations, not the next five months.

No more than Judge Posner do I know what the future holds. But I would not bet against the Chinese culture. Ever.

Terry Bennett

Indeed, the Chinese are a breed apart - admirably so - but they are not infallible, and I do not think they are equal to their current challenges. If they haven't peaked already, they are near the top of their horizon.

The problem is the same one they've had for 50 years - overpopulation (although the dictatorship thing is also a big bummer). A middle class of a hundred million people sounds impressive, until it is put in the context of a total population pushing 2 billion. The enormous underclass will forever drag on the country as a whole, and I expect that even the impressive gains they've seen in the last few decades are somewhat illusory in that they probably won't ever translate onto the bulk of the population.

Under a more free and tolerant government, they might have a chance of exploiting their amazing work ethic and continuing their climb, but the combination of the repression and the outsized subsistence class is a knockout for them. If I had to bet, I'd say in 20 years China won't look much different than it does today.

Neilehat

The Chinese economic expansion slowing? Perhaps, we're witness to a classic example of the "Law of Diminishing Returns" at work. Only time will tell. The example and case study needs to play out further...

GluckRadio

I did a radio show with Martin Jacques and he talked abou this very issue - how American economic hegemony is on its way out to a global world of multiple leaders. The end of the Western world. Listen to it at GluckRadio[dot]com, episode 48. Let me know what you think.
This is a very passionate issue for me.

B Wilds

All booms start out legitimately but that does not prevent them from developing into bubbles that pop disastrously in the end. The bubble forming in China is no exception to this pattern. Fast growth can and does mask many ills.Central planning always sounds good, logically, it would seem reasonable and efficient, but it has an Achilles heal. Often companies intertwined with government run on razor thin margins, with creating jobs almost a priority over making a profit. This is an incubator for corruption. A fair number of articles were written on this subject in the middle of 2011, but concerns abated as central banks across the world unleashed massive quantitative easing. I suspect that the problems have not been corrected and the bursting merely delayed. I would also like to point out that China is an American product, by this I mean we developed the country as a counter weight to the Soviet Union, it looks like we may of done to good a job. More on this subject can be found on my blog site in the post below,

http://brucewilds.blogspot.com/2013/02/china-bubble-yes-it-is.html

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