[davidboyd] David: China strategy

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Posted by David:
China strategy
http://davidboyd.org/posts/1145667118.shtml


   [1]Buchanan:

     China's performance tells us that, contrary to the teachings of
     free-trade liberals, dictatorship and protectionism do not
     necessarily ensure stagnation. For China is a one-party state and
     the most protectionist great nation on earth. Yet, her growth has
     been unequaled by any free-market rival nation for 15 years.
     How does China achieve her success? By keeping her currency cheap
     -- refusing to let it float against the dollar -- China is able to
     offer Chinese goods at fire-sale prices to U.S. consumers, while
     the cheapness of her currency keeps U.S. goods priced out of
     China's market. 

   There's something wrong with this analysis. He goes on:

     In China the consumer does not come first. Nor do the voters decide
     policy, for there are no voters. The regime, state and nation come
     first. China's leaders want to make her first in manufacturing and
     high-technology, to become the primary producers for the world, and
     to displace the United States as the dominant power in Asia and the
     world. 

   There it is. Can productivity gains withstand oppression? Pat's
   bemoaning China's 10% annual growth, but so what? Bear with me, it's
   easy for growth stocks to grow 10% a year. They start small. It's a
   lot easier to go from $50 mil in sales to $100 mil in sales than it is
   to go from $500 mil in sales to a billion in sales.
   I can't see how China keeps its thumb on its people the more they
   invest in capitalism and the more the Chinese interact with the rest
   of the world. At some point, enough people are going to start asking
   enough questions and then things are going to get uncomfortable for
   somebody.
   Read the China papers once in a while. There are a few listed to the
   right. This isn't the monolithic beast intent on destroying the US
   that we hear about. They've got their own problems and they're major.
   From a serious lack of health care for those without means to no heat
   if you live in certain parts of the country to an incredible income
   gap, China faces a difficult path getting its people to perform while
   continuing to not reward them fairly.

References

   1. http://www.townhall.com/opinion/columns/patbuchanan/2006/04/21/194568.html