Third, there is a deeper reason for not worrying about China. China is inherently unstable. Whenever it opens its borders to the outside world, the coastal region becomes prosperous, but the vast majority of Chinese in the interior remain impoverished. This leads to tension, conflict, and instability. It also leads to economic decisions made for political reasons, resulting in inefficiency and corruption. This is not the first time that China has opened itself to foreign trade, and it will not be the last time that it becomes unstable as a result. Nor will it be the last time that a figure like Mao emerges to close the country off from the outside, equalize the wealth – or poverty – and begin the cycle anew. There are some who believe that the trends of the last thirty years will contine indefinitely. I believe the Chinese cycle will move to its next and inevitable phase in the coming decade. Far from being a challenger, China is a country the United States will be trying to bolster and hold together as a counterweight to the Russians. Current Chinese economic dynamism does not translate into long-term success.
– George Friedman of STRATFOR, getting it far righter than one of his namesakes.
Though I don’t think we can be complacent about CFhina, India is actually a greater threat economically.
From in the Chinese interior observors I have listened to over the past several years, it seems logical to conclude that the Pareto Effect applies.
The trend (and political push) is for accelerated urbanization, even if on a more modest scale in the “hinterlands.”
Urbanization trends presage declines in population expansions – relieving some pressures, but bringing in new ones, plus requiring changes in methods of resolving them.
As for the emergence of some type of central authority figure capable a directing an economic or social re-alignment, the observable trends are for continuing fragmentation of “power centers” (PRA, e.g.) as production modernizations and declining labor supply take effect.
China faces what may turn out to be severe demographic problems (aging for one, family formations another).
RRS: Yes, my personal interpretation of the situation is that demographic issues are very important, too: aging, principally, although sex imbalance (which is what I would say rather than “family formation” is a real problem, too). The one child policy means that these are going to be more extreme in China than anywhere else in history, and the consequences of this will be profound, although what exactly they will be is not entirely certain at this point. (In defence of Friedman, he does discuss this elsewhere in his book).
This is a pretty rubbish quote. Lots of assertions without any evidence to back it up. It happened before therefore it will happen again is not good reasoning. It may well be that the current dynamism does not translate into long term success, but there is no more reason to suppose that it won’t than to suppose that it will.
And ‘economic threat’?! I suppose the Indians might start copying the evil Chinese policy of selling American’s too cheaply and buying their debt at inflated prices.
I meant of course ‘selling Americans goods at too cheap prices’. Americans are never for sale.
Totally wrong.
China has made a gigantic leap forward, it’s not going back to the catastrophic Mao regime. Friedman’s speculations (I haven’t read the book) are nonsense.
Even the interior has advanced economically (though less than the coastal areas). The advance is so huge and so massive, comprising such a big proportion of the population, that it can’t be reversed.
There will be ups and downs, but no implosion, and no new Mao in the foreseeable decades.
Besides, forecasting 100 years is in itself a big idiocy.
And, China is no threat to the US. It is dumb to see the economic advance of one nation as a threat to another. Economic advance is beneficial for all. America, and the whole world benefited hugely fro commerce with China. China is not going to attack the US with bombs or missiles.
The more the “coastal region” prospers, the greater the number of people who will want to be part of it. But the more it prospers, the greater the cost of operating an office or factory there, and the greater the incentive to move inland where land and labour are cheaper. So there is a natural tendency for the coastal economic and social culture to expand into the rest of China, drawing in more and more people.
But until very recently this wasn’t possible. It wasn’t possible for many peasants to travel hundreds or thousands of miles to the coast to join the urban working class. Nor was it possible for manufacturers to move far inland before it became too difficult to get raw materials in and finished goods out. The wealth that could be made at the coast could not spread inland, leading to escalating tensions between the coast and the interior.
Modern transport and communication technologies solve these problems and make a different outcome possible. China could become like Australia, with the vast majority of the population living in coastal cities that encircle a huge but largely uninhabited interior.
The biggest threat to China’s stability is not the natural tensions between the coast and the interior, because technology has finally taken care of that. The biggest threat is the gender imbalance mentioned by Michael Jennings above. Tens of millions of frustrated young men who can’t even find a date let alone a bride could cause an awful lot of trouble.
Counterweight to the Russians!?
Oh good grief.
Exactly who is India ‘threatening’ economically? This is just another version of the preposterous fixed wealth fallacy: if India gets richer, the ‘West’ somehow get poorer? No, what the rest of the world gets is an increasingly wealthy producer and consumer of goods and services that makes the global economy BIGGER.
We could only hope. Selling to Americans at too cheap prices hurts Chinese, not Americans. The Americans (and Europeans) benefit.
Russia is going precisely nowhere fast. This is a country where they sell eggs in polythene bags.
What happened to the eggs’ shells?
Russia is a joke. The population is falling dramatically.
I find this attitude disturbing, in best phrased by the first comment “India is a bigger threat economically.”
Why is the success of another nation something to be feared? It is not a zero sum game. China’s rise has been spectacularly good for America, it has greatly raised our standard of living. Of course there were a few loosers, but there always are, and unfortunately they are usually louder than then winners.
The Anglosphere has always been the primary source of innovation in the world, and that innovation comes from a libertarian culture and the core cultural values. If we want to save America and Britain the last thing we need is trade barriers. The last thing we need is “becoming more like the rest of the world”. We need to celebrate who we are, free people of the burdens of government and let the anglosphere do what it has always done: lead the world in innovation.
(Oh, and we need to stop screwing up the schools, but that is another topic.)
“It happened before therefore it will happen again is not good reasoning.”
Maybe not; but historically speaking, it’s the safer bet.
Perry is correct – India is not a “threat” (“they are taking our jobs….” how come that is so now the wage gap is SMALLER than it has been in centuries? it is not low wages that are the issue – it is high taxes and regulations in the West).
However, I believe that Indian economic development is threatened.
Not only is India involved in two wars (people die every day in fighting both with the Islamists and with the Maoists) – which are very real even though the West ignores them, there are also other factors.
The “Permit Raj” (the regulations that crippled the Indian economy) were torn up a couple of decades ago – but the job was never fully done.
Manufacturing industry in India is still subject to many regualations – especially in the labour market.
People know about illegal operations with child labour and so on – but they do not know the reason for them.
Let us say you try and play it straight in India – and hire adult men with legal contracts.
You are in terrible trouble – for if the man has a legal contract (in the form that the law code insists upon) it is almost impossible to get rid of him (if there is a downturn in business – or someone better comes along), and he is entitled to………
So many manufacturing operations (not all by any means) stay corrupt hole in the wall operations – employing people who will not be too much trouble (even if their work is actually not good at all) and getting by via paying endless bribes to inspectors, local politicians and so on.
But this is not even the main problem.
The main problem is that the Congress party has introduced welfare schemes over the last few years.
“Quite right to – good for the poor”.
The economic collapse will not be – and sooner or later these schemes (free this and that, and a basic income for hundreds of millions of people) must bankrupt India.
China:
I know nothing of China – and the more I try and find out the more convinced of my own ignorance I am.