China's Economic Ascendancy (Part 2) 34 comments
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Economic Growth
The 1800’s had the usual ups and downs economically. But, there were a few themes that dominated. GDP grew consistently, with a big spike in the 2nd half of the century. The 1800’s were also characterized by deflation. The U.S. was able to generate tremendous growth using virtually no government debt, except during the Civil War. The National Debt stood at $2.3 billion in 1872 and dropped to $1.7 billion by 1888. Lastly, the U.S. currency was rock steady because it was backed by gold. The National Currency Act of 1863 established the dollar as the national currency. The National Banking Acts of 1864 and 1865 created the infrastructure of our national banking system. In 1865 there were 1,643 banks in the U.S. By 1896 there were 11,500 banks operating in the U.S. Financial panics occurred when expansion and over-investment got out of hand in 1873 and 1893. They were violent and short.
The GDP per person grew moderately in the 1800’s as the population of the country exploded. As the Industrial Revolution progressed, GDP per Capita accelerated. The late 1800’s were a time of good deflation from excess supply, driven by new technology. The new inventions (light bulb, telephone), railroads and machines powered by oil created tremendous productivity and excess capacity. The economy grew an extraordinary 4% per year in real terms between 1870 and 1896, as wholesale prices fell 50%. Tremendous growth and progress were achieved while deflation reigned. The U.S. also learned that there can be economic benefits to war. The Spanish-American War began in 1898. The U.S. gained control of the former colonies of Spain in the Caribbean and Pacific. The war increased the business and earnings of American railroads, increased the output of American factories, and stimulated industry and commerce.
Data compiled by the Federal Reserve Bank of Minneapolis paints a fascinating picture about inflation. During the entire 100 years from 1800 to 1900, there was inflation in only 22 of those years. There was deflation during 39 of those years, and zero inflation in the other 39 years. Most of the inflation occurred during the War of 1812 and the Civil War. An item that cost you $100 in 1800 would have cost you $50 in 1900. It does appear that tremendous economic growth can be achieved without inflation. This has not been what has been preached since 1913. In the 98 years of the Federal Reserve’s existence, the United States has had 86 years of inflation and 12 years of deflation. The massive inflation has generated false growth in GDP, especially since Nixon closed the gold window in 1971.
The U.S. achieved phenomenal growth with no inflation and utilization of very little public debt. Except for the spike during the Civil War, political leaders kept a lid on government spending. All revenues were generated from excise taxes and tariffs. There was no personal or corporate income tax during the 1800’s except for a brief period during the Civil War. The U.S. entered the 19th Century with public debt at 10% of GDP and departed the 19th Century with public debt at 10% of GDP. Today, it stands at 80% of GDP and accelerating upwards. These low debt levels gave the U.S. a tremendous competitive advantage over the UK. With a vast global empire, the UK had public debt exceeding 250% of GDP in the early 1800’s and had to utilize considerable resources to paying that debt down throughout the 19th Century.
The U.S. dollar was stable during the entirety of the 1800’s, except during the brief inflationary period during the War of 1812 and the more dramatic inflationary period during the Civil War. The stability of the dollar was constant versus gold from 1870 until FDR seized all the gold in the country in the early 1930’s, when it collapsed by approximately 50%. Since Nixon closed the gold window in 1971, the dollar has collapsed another 47% versus gold. Stating that we have a strong dollar policy has been a bold faced lie.
China Rising
The United States began its long trek to becoming a worldwide economic powerhouse during the 19th Century, leading to domination of the 20th Century. The dominant power at the start of the 19th Century was the United Kingdom. Today, they have the 6th highest GDP, just ahead of Italy. In 1970, U.S. GDP was $1 trillion and has risen to $14 trillion today. China’s GDP in 1970 was $92 billion. Today, it is $4.2 trillion a 4,450% increase in 28 years. China has been growing their GDP at an 8% to 10% pace for over a decade. They now have the 3rd largest economy in the world, and will pass Japan as the 2nd largest economy on the planet within the next 5 years. Sometime between 2030 and 2050, China will overtake the United States as the largest economy in the world.
The tremendous growth is being driven by the migration of millions of people from farms to the cities. By 2007, 594 million Chinese lived in urban areas. The United Nations has forecast that China's population will have about an equal number of people staying in the rural and urban areas by 2015. In the long term, nearly 70% of the population will live in urban areas by 2035. According to Professor Lu Dadao, president of the Geographical Society of China (GSC), China’s urbanization took 22 years to increase to 39.1% from 17.9%. It took Britain 120 years, the U.S., 80 years, and Japan more than 30 years to accomplish this.
This rapid urbanization will create huge infrastructure growth as more roads, sewers, houses, manufacturing plants, power plants, public transportation, and office buildings will need to be built. This trend is identical to the U.S. trend in the 1800’s. The urbanization has caused pollution, illness and congestion problems. These issues also occurred in the U.S. during the 1800’s. The efforts to solve these problems will create even more growth. The manufacturing of goods for America will slowly be replaced by production for its own internal demand. Eventually, China will not be as dependent on the U.S. for its economic existence.
The population of China is currently 1.3 billion, more than 4 times the size of the U.S. population. China’s population is not expected to grow much, if at all, between now and 2050. This is a dramatic difference from the U.S. in the 1800’s, as immigration and high birthrates drove the population upward. The birthrate in China of 1.7 is not high enough to even maintain its current population level over the long-term.
Most of the arguments that I hear regarding why China will not pass the U.S. economically relate to their aging population. After examining the current age distribution and the projected distribution between now and 2050, there is very little difference between the U.S. and China on a percentage basis. It is clear that young populations lead to more vitality, growth, and invention. As the chart below details, 20.1% of the Chinese population is under the age of 15. In the U.S., 21.4% of the population is under the age of 15. Now here is where the rubber meets the road. Because China’s total population is 1.3 billion, 20.1% under 15 years old equals 267 million people. Their youth almost equals the United States’ entire population. The U.S. only has 60 million people under the age of 15.
| Age structure: | |
| 0-14 years: | 20.1% (male 142,085,665/female 125,300,391) (2008 est.) |
| 15-64 years: | 71.9% (male 491,513,378/female 465,020,030) (2008 est.) |
| 65-over: | 8% (male 50,652,480/female 55,472,661) (2008 est.) |
By 2050 the U.S. demographic picture will only be slightly better than China’s on a percentage basis. In addition to the fact that China starts with a population 4 times the size of the U.S., they will benefit greatly from the shift from a rural society to an urban society. The U.S. already has 80% of its population living in non-rural areas. By 2050, China will likely reach a similar percentage. This means that approximately 600 million people will move from rural areas to urban areas in the next 40 years. This figure is mind boggling. In addition, the people moving are likely to be young. The old people will stay on their farms and subsist as they always have. The youthful urban population will drive progress and advancement.
The piece of the pie that is missed by many is the rapid education of China’s youth. In 1978 there were virtually no Chinese students enrolled in Post-graduate programs or studying abroad. Today, there are close to 1 million Chinese students in Post-graduate programs and in excess of 100,000 students studying abroad. One third of all the graduate students in U.S. Science and Engineering programs are not U.S. citizens. With 267 million children under the age of 15 combined with rapid urbanization and desire for advanced education, China is an economic juggernaut. There will be no denying them the economic crown by the middle of this century. It is inevitable.
The ascendancy of China does not necessarily mean that the United States will descend. The United Kingdom entered the 1800’s with a tremendous amount of public debt. Through economic growth, fewer military conflicts, and control of spending, they were able to reduce their debt from 250% of GDP to 50% of GDP by 1900. The current U.S. economic position appears to be more dire than that of the UK in 1800. With total debt exceeding 350% of GDP, a global empire with troops stationed in 120 countries, two ongoing wars, a National Debt that will reach $14 trillion in the next two years, $56 trillion of unfunded future liabilities, and a rapidly aging populace, the ability for rapid economic growth is nil. We’ve lived above our means for decades and now we’re broke.
Americans have a lot of fight left in them. If we go straight and kick our spending and debt habit we can push off the day of reckoning. If we continue on the reckless current fiscal path, the Chinese, among others, will catch and pass us before the middle of the century. Our standard of living will enter permanent decline and we will become the Great Britain of the 21st Century. The choice is ours.
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This article has 34 comments:
theburningplatform.com...
I started learning chinese in 1996, and speak quite well know. What I still remeber is everybody asking me, why in the world should I learn this funny language what these rice eating COMMUNISTS, YES COMMUNISTS speak, that don't have a that major corrupt political system.
Just a few days someone has argued that CHina with its 2 billion people has almost the same purchasing power as the US.
China has 1.3 billion people, copied the US presentation method of statistics, and please don't forget that many statistics like to use PPP comparison. Nice, but this does not pay for US goods.
It has become very quite with the lecturing towards China, and telling them what is the best for them and how they should do this. We all know who was the lecturer.
smart ass has somehow completly vanished, I can somehow now identify some sort of admiration.
Indeed, the choice is ours. Do we want to return to the founding principles of our country, in which government exists to protect individuals' life, liberty, and property, but otherwise gets out of the way? Or do we want to continue the trend toward the stagnation and decline resulting from an Atlas Shrugged-like assault on the country's producers and a nanny state that interferes in every aspect of our lives?
"A creative entrepreneurial spirit was unleashed with all its fury during the 1800’s in America. No problem was too big to solve. Mountains, rivers, oceans, wilderness, and darkness were just obstacles to a better tomorrow. Capitalism and the possibility of wealth and success drove many to create and innovate."
The cultural mission of America back then is way different from that of China now. Both nations had/have a strong entrepreneurial spirit, but it is worth noting that the open culture in America must have had a large effect on our country's ability to innovate and succeed.
China's culture, political and social, is much different. I think it is still anyone's game to say if the combination of that system with the country's strong entrepreneurial drive will produce the same results that America had post-Civil War.
This is a cost which no one has ever quantified --- but its consequences could very well be fatal (qv State of California).
On Jun 05 11:39 AM Dana H. wrote:
> and a nanny state that interferes in every aspect
> of our lives?
The great period of US invention IMHO extended from the 1930s (R & D resulting in computing devices, nuclear research, etc centered in Princeton, etc) through the early 1980s. Post-Reagan, three things happened: (1) rise of fat cat large corporations and their execs [contributors to elective politics]; (2) shrinking of R & D nationally and abandonment of technology as a driver of business (except for military applications) -- look at all the stranded alternative energy technologies built up in the Carter era: the US is still last globally; (3) rise of financial sector, especially after dismantling of Glass-Steagall --- with inordinate rewards for bundling financial risk, speculation and trading.
It takes more than a willingness to change to capture prior glories to turn America around, and this article is a bit superficial to really posit a plausible pathway.
Deep down, I think maybe even the majority understand this. How can they be united?
On Jun 05 11:39 AM Dana H. wrote:
> Very nice to see a long-term historical perspective in an article
> for a change, and a debunking of the myth that economic growth requires
> money supply growth.
>
> Indeed, the choice is ours. Do we want to return to the founding
> principles of our country, in which government exists to protect
> individuals' life, liberty, and property, but otherwise gets out
> of the way? Or do we want to continue the trend toward the stagnation
> and decline resulting from an Atlas Shrugged-like assault on the
> country's producers and a nanny state that interferes in every aspect
> of our lives?
On Jun 05 12:40 PM Ben El-Baz wrote:
> I'm currently living in China, and I get to see the spirit of normal
> working people on a daily basis. This statement about 19th century
> America really seems to characterize the mood in China today:
>
> "A creative entrepreneurial spirit was unleashed with all its fury
> during the 1800’s in America. No problem was too big to solve. Mountains,
> rivers, oceans, wilderness, and darkness were just obstacles to a
> better tomorrow. Capitalism and the possibility of wealth and success
> drove many to create and innovate."
>
> The cultural mission of America back then is way different from that
> of China now. Both nations had/have a strong entrepreneurial spirit,
> but it is worth noting that the open culture in America must have
> had a large effect on our country's ability to innovate and succeed.
>
>
> China's culture, political and social, is much different. I think
> it is still anyone's game to say if the combination of that system
> with the country's strong entrepreneurial drive will produce the
> same results that America had post-Civil War.
Not only that Japan did not cause the US to fall flat on its face. That is currently happening to the US despite the rally on Wall Street. If China was to remove the currency peg, it would close at least half of the GDP gap with the US in a couple of years. Add to that the fact the US economy is going to be crushed by higher commodity prices and 2015 is realistic for China overtaking the US let alone 2020. Those who talk about 2050 have their head up their ass.
On Jun 05 02:08 PM user396040 wrote:
> A great deal depends on geopolitical factors. China is in dangerous
> neighborhood and may have to spend more and more on defense. Its
> demography is distorted by the one child policy which is creating
> an excess of men over women which tends to be destabilizing. China
> is as dependent as the US on oil imports. All of these things can
> create bumps in the road for China depending on how they play out.
> In the early 1990s, everyone thought Japan would take over the world(remember
> the movie,"Rising Sun"?); it did not play out that way. Having raised
> these issues, I tend to agree that China is the most plausible successor
> to the US as King of the Hill.
Belief systems are important. The enormous success of the US had everything to do with Protestant values. There was enough inclusiveness that despite the horror of slavery and bigotry that are found in human relations, that many could thrive even before affirmative action.
Now we have the richest leaders of all time who's only value is that America has been a good place to make a buck. However they get it. And a pervasive misallocation to give us gargantuan government that hobbles enterprise greatly. They have been on overdrive using their lies in their latest power grab and too few seem to notice or care.
sour grape - not: We need to get ourselves up to speed, not slow China down.
We also prospered economically because we created a new political system which freed us from feudalism which was still strong in Europe in 1776 and which had a strong, negative effect on the American economy up until 1776.
Also, people from all over the world came to American to seek freedom of opportunity which didn't exist in the old world and they found a vast, land with immense forests and untapped resources, inhabited only by native Americans. It was free for the taking and easy to hold against the feeble attempts of the Indians to get it back.
The Chinese revolution has attempted to strip the country of its feudal traditions but China itself still sits there, with thousands of years of tradition lurking underneath. Totalitarianism has a very long history in China, just as it had in Europe before the French and English Revolutions. But it has taken Europe a very long time, and two devastating world wars, to attain the level of social and political sophistication it has today.
Very few immigrants will migrate to China to seek opportunity there.
The Chinese social and political model is not adequate to do anything but copy the science of the West, just as Japan has done.
Following Russia, China will finally collapse into political and social chaos and civil wars, as its people struggle to cast off the last vestiges of feudalism. This process could take a very long time to unfold however, just as it has in other places in the world.
China might be a good financial bet for the relative short term but for the long term, it is not.
On Jun 05 06:32 PM Dave Wrixon wrote:
> Yes, but if China is as successful as Japan, it will be several times
> the size of the USA in terms of GDP.
>
> Not only that Japan did not cause the US to fall flat on its face.
> That is currently happening to the US despite the rally on Wall Street.
> If China was to remove the currency peg, it would close at least
> half of the GDP gap with the US in a couple of years. Add to that
> the fact the US economy is going to be crushed by higher commodity
> prices and 2015 is realistic for China overtaking the US let alone
> 2020. Those who talk about 2050 have their head up their ass.
On Jun 06 08:21 AM User 141917 wrote:
> George Friedman, author of "The Next 100 Years," has a different
> view of China's future. I highly recommend reading that book.
Another good and educational article, not as vitriolic.
Interesting comments.
I was thinking of The Terminator as well as Butch Cassisdy, but either works.
One point made that caught my attention:
"The manufacturing of goods for America will slowly be replaced by production for its own internal demand. Eventually, China will not be as dependent on the U.S. for its economic existence."
Not sure replaced is the right word, more like supplemented. If replaced is correct, then manufacturing may return to America and we may not be as dependent on China and vice-versa. If supplemented is right, then China won't be dependent on US, but we will still be on them.
"economic historians have established that much of the growth in the US after 1850 resulted from wholesale rip-offs of British inventions, with no royalties or license fees paid"
coreopsis
LOL. Pretty much what China is doing to us now.
If one would believe that great empires in human history would span only 400 years, based on the British (1700-present); the Roman (27BC - 426 AD); the Chinese Han (206 BC - 220 AD), the American Empire would probably have just passed its mid-point.
Jim Carey made some valid points. China has had no democratic traditions; they originated from the Greeks. The present course is a Dynasty (named Red?). From 1949 to another 350 more years? I don't really have the answers.
Jim perhaps missed some needed research on Chinese scientific achievements long exhibited in their ancient history, in astronomy, gun power, printing, mathematics, to name a few. True, their weakness lies in that it is all within the government's control and purview and the government had been the sole employer. But I think that is now slowly and surely changing.
Teutonic (the Arm Chair Teutonic that Jim called him)
Under America's system, the nationalization of companies is being debated publicly to varying degrees and is not intended for perpetuity. The pendulum will invariably swing back towards more free markets. This is not the case for China, a totalitarian regime. There is no public debate about the legitimacy of SOE's. Since the Tiananmen protests, the CCP has expanded and taken ever greater control of their command economy.
"State-controlled enterprises receive more than three-quarters of the country's entire capital each year, reversing the situation prior to 1989. The private sector is denied both formal capital (bank loans) and access to the most lucrative markets which are reserved for the state-controlled sector. Only about 50 of the 1400 listed companies on the Shanghai Stock Exchange are genuinely private. Fewer than 100 of the 1000 richest people in China are not linked to the party. This state-corporatist model favours a relatively small number of well-placed insiders. Meanwhile, a billion people are largely missing out on the fruits of GDP growth. In fact, 400 million people have seen their net incomes decline during the past decade. Absolute poverty has doubled since 2000.
This extensive role of the CCP has coincided with a rise in systemic corruption. Courts at all levels are still explicitly under the control of party organs. According to the Chinese Academy of Social Sciences studies, stealing from the public purse by officials amounts to about 2 per cent of GDP each year, and it is rising. According to a 2003 CASS report, more than 40 million households have had their lands illegally seized by corrupt and unaccountable officials.
Levels of dissatisfaction with especially local authorities are so bad that there were 87,000 instances of mass unrest in 2005, according to official figures, rising from a few thousand in the mid-1990s. To appease unhappy citizens, Beijing has instituted a system of "petitions" whereby aggrieved citizens can appeal to a higher authority against their local officials. A good idea, perhaps, except for the fact that of every 10,000 petitions lodged, only three are heard."
Great fundamentals do not necessarily translate into sustainable economic growth. The predictions of Zhao Ziyang, former Premier of the People's Republic of China, once said that if China fails to develope a parliamentary democracy as its political system, then its capitalist market will not be "healthy." He said China would " run
into the situations that have occurred in so many developing countries: commercialization of power, rampant corruption, a society polarized between rich and poor."
This is exactly what is happening.
Author George Zhibin Gu was recently asked what he thought was the biggest challenge for China today–both politically/economically and socially. He said the following:
"The government is no service provider. As such, there is no way to establish a law-based, fair modern society as well as modern organizations and businesses. In short, people’s power remains weak. What is more, all market deals are turned into bureaucratic dealings."
Another interesting read is this one:
Can China Save The World From Depression
www.fpif.org/fpiftxt/3650
Can China Save the World From Depression
www.fpif.org/fpiftxt/6127
China's complacency with North Korea is simply another ruse to re- direct attention from their internal problems. Why would they want another competitor like South Korea who could compete with them at a world-wide level?
China is buying gold at record levels and prohibiting external sales of gold bullion. Does that tell yousomething?
The key thing to watch is export/import data. I haven't seen May's data yet. China says they will try a thousand ways to increase demand for their export products. I'm doubtful their exports, which are their true economy for growth, will be revived enough to resemble anything of the past. Artificial stimuli will only carry them so far. They won't have a domestic market coming close to resembling western consumerism anytime soon, if ever. So the next 24 months will be interesting to see how everything settles.
Thank you for your perspective. I think you nailed it but you know there is always the chance that given a taste of capitalism/prosperity the masses may eventually get a better form of government but I would require a bloody revolt. If anything like the U.S.'s civil war, that would be the buy of a life time.
Ques: Does anyone know if Hong Kong's GDP is included in China's figure?
FYI: I think Taiwan may be a better and safer play on China's growth.
Yes, I hear the "Hey, we're The United States of America! We've had adversity before, we overcame it and we triumphed! We'll do it this time too!" I hope so. One thing bothers me though...I heard it from Senator Blutarsky.
North America though, and in particular the US has something that England never had. That is, access to enough domestic resources of all types that allowed them to independently weather the worst of economic storms.
The distinction is important, England with it's population density has never been in a good position to have materials independence. The US on the other hand (if necessary) has the depth of resources to stand alone from the rest of the worlds economies.
What I am saying really is that in the event of a theoretical or hypothetical worst-case scenario that there were absolutely no inbound shipments of goods, supplies and materials that the US economy could carry on and function without only minor inconvenience. We produce enough food, have access to tremendous reserves of coal and gas and are still the largest manufacturing country on earth despite commentary that would suggest otherwise.
England never had this sort of self sufficiency as most of it's resources were brought by ship from abroad. Their dependence on Africa, India, China and the Americas only proved they were shrewd resource managers. But resource ownership ultimately all shifted back to the countries of origin.
I think this is why the US is bargaining from a position of strength with the rest of the world and Asia specifically. In a real pickle we are beholden to no-one and will get by just fine. It also suggests where the conflicts in the future lay though. China is now directly challenging the US for control of strategic resources outside it's borders and properly functioning trade is crucial to their growth trajectory.
The relative size of their population in relation to their countries tremendous needs suggest that China is actually in much the same position as England was as it rose to prominence. It is similar to an island state with a great dependency on imports of all sorts. Especially commodities. The Chinese have expressed this vulnerability openly by making such large and disproportionate purchases of foreign commodities over the last few months.
Cam
North America though, and in particular the US has something that England never had. That is, access to enough domestic resources of all types that allowed them to independently weather the worst of economic storms.
The distinction is important, England with it's population density has never been in a good position to have materials independence. The US on the other hand (if necessary) has the depth of resources to stand alone from the rest of the worlds economies.
What I am saying really is that in the event of a theoretical or hypothetical worst-case scenario that there were absolutely no inbound shipments of goods, supplies and materials that the US economy could carry on and function without only minor inconvenience. We produce enough food, have access to tremendous reserves of coal and gas and are still the largest manufacturing country on earth despite commentary that would suggest otherwise.
England never had this sort of self sufficiency as most of it's resources were brought by ship from abroad. Their dependence on Africa, India, China and the Americas only proved they were shrewd resource managers. But resource ownership ultimately all shifted back to the countries of origin.
I think this is why the US is bargaining from a position of strength with the rest of the world and Asia specifically. In a real pickle we are beholden to no-one and will get by just fine. It also suggests where the conflicts in the future lay though. China is now directly challenging the US for control of strategic resources outside it's borders and properly functioning trade is crucial to their growth trajectory.
The relative size of their population in relation to their countries tremendous needs suggest that China is actually in much the same position as England was as it rose to prominence. It is similar to an island state with a great dependency on imports of all sorts. Especially commodities. The Chinese have expressed this vulnerability openly by making such large and disproportionate purchases of foreign commodities over the last few months.
Cam
"[if] there were absolutely no inbound shipments of goods, supplies and materials...the US economy could carry on and function with only minor inconvenience."
Really? When it operates an economy almost entirely based on car-dependent suburban sprawl but has only enough domestic oil production to meet a quarter of its daily needs?
Or are you looking ahead to some future time when the US has significantly reduced its oil dependence? In which case, the other countries in question would have plenty of time to make their own manoeuvres, probably rendering this point moot.
And, after saying the US is just fine on its own, you add: "It also suggests where the conflicts in the future lay though. China is now directly challenging the US for control of strategic resources."
But if the US is such a paragon of self-sufficiency, why would it need to fight China for strategic resources?
I happen to think that the US _is_ well-placed to prosper in a less energy-rich world where there will be lower levels of international trade and slower-growing, more diversified economies. But then, so is China.
2:07 PM cameroni wrote:
> carry on and function without only minor inconvenience. We produce
> enough food, have access to tremendous reserves of coal and gas and
> are still the largest manufacturing country on earth despite commentary
> that would suggest otherwise.
>
> England never had this sort of self sufficiency as most of it's resources
> were brought by ship from abroad. Their dependence on Africa, India,
> China and the Americas only proved they were shrewd resource managers.
> But resource ownership ultimately all shifted back to the countries
> of origin.
>
> I think this is why the US is bargaining from a position of strength
> with the rest of the world and Asia specifically. In a real pickle
> we are beholden to no-one and will get by just fine. It also suggests
> where the conflicts in the future lay though. China is now directly
> challenging the US for control of strategic resources outside it's
> borders and properly functioning trade is crucial to their growth
> trajectory.
>
> The relative size of their population in relation to their countries
> tremendous needs suggest that China is actually in much the same
> position as England was as it rose to prominence. It is similar to
> an island state with a great dependency on imports of all sorts.
> Especially commodities. The Chinese have expressed this vulnerability
> openly by making such large and disproportionate purchases of foreign
> commodities over the last few months.
>
> Cam
I started to teach myself Chinese in the early 1970's via Radio Peking's shortwave service.
My first trip to China was in 1985.
I moved to Beijing in 1992, married a Chinese and settled down.
I have seen lots of changes to say the least.
The American experience worked because (in my humble opinion) because of the laize- faire policies of the government. Coming from an environment of government oppression or at least heavy handiness, the European immigrants were ready for a change. Hard to have these kinds of policies in the modern era.
China has done well because they were able to create, after some initial failures like the Great Leap etc,. a Chinese version of socialism. I know most of you will find this hard to believe, but it is really true, this government enjoys lots of support. The people are very patriotic. They don't want a change. They also realize that they know much more about us than we do about them (and this is largely a fact sadly. How many dynasties can you name?)
There are not many similarities between the American political and economic system and the Chinese. But in a globalized world, one where everybody is chained together in one boat, either we will all float together or we will sink together. The Chinese talk about this all the time on their radio and TV programs, the need to be tolerant and to try to get along in spite of the differences. We had better begin this education process too. The longer we cling on to the notion that we are the kings of the world (very unlike 1800's Americans by the way), the harder will be our fall.
We need to understand (not agree necessarily with) our differences and work together on areas of common interests. We can't live with them, we can't live without them. That is just the way it is. We are not going away as a strong nation anytime soon. We are not the UK of former times. But neither are the Chinese. Peace and making money are the real secret to a happy life. This much I have learnt from the Chinese!