Thoughts on China’s economy
Jonah Goldberg, editor and columnist for National Review Online, raises some interesting questions about the Chinese economy. He is skeptical of all the claims that China will surpass the United States economically in 2027 (or whatever year people are now predicting) on account of some serious structural problems with China’s institutions.
Ask yourself this: Why are we in this financial crisis?
Any short list of reasons would include a lack of transparency in markets and regulatory rule-making; collusion between business and government; the politicization of lending practices (including the socialization of risk and the privatization of profit through giant governmental entities like Fannie Mae); and, of course, simple greed.
Does anyone honestly think China doesn’t have these problems ten times over? It has no free press, no democratic accountability, and no truly independent regulators.
After every Chinese earthquake, we discover that safety inspectors couldn’t be trusted to oversee the construction of schools and hospitals. And we’re supposed to believe that China’s corrupt model produces toxic baby formula but spic-and-span finances?
Goldberg calls China’s entire economy “one big Fannie Mae” and suspects it won’t be anytime soon that the People’s Republic surpasses the United States as the world’s leading economy, just as predictions in the 1980s that Japan would do so proved incorrect.