China's Advantages

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/26/AR2010022602601.html?referrer=emailarticle

There is all this talk about the G-20, the G-8 (or G-7) but really, aside from the textbooks, the world has a "G-2": China and the U.S. With the G-2, it starts with money and goes on to China's export products giving the U.S. a "Wal-Mart Effect" lifestyle: "For every dollar taken from U.S. drivers' pockets at the gas pump in the form of higher prices ... low cost exports from China and elsewhere have put $1.50 back in terms of cheaper retail goods." (WSJ - 9/29/07)

The Washington Post has given us one of the latest perspectives on how China seems to be doing so many things better than the U.S. while they complain about how much of our debt they hold. The Post quotes Thomas L. Friedman as seeing some virtue in the Chinese Communist Party's monopoly on political power: "One party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."

And, of course, China is putting out more engineers than we are, they're going green faster than we are, at least they can build a high-speed train, etc. The NY Times seems to lead the charge in stories of how the U.S. is lagging China in growth. Of course, the Post points out that China's per capita income of $6,546 puts it somewhere above the Ukraine and below Namibia (according to the IMF).

About those "engineers". In 2006, the NY Times reported that China graduates 600,000 per year compared with 70,000 in the United States. The Times report was quoted on the House floor. The only problem was that China's statisticians count car mechanics and refrigerator repairmen as "engineers."

Projections of China's economic growth seem to shortchange the country's looming demographic crisis: it is going to be the first nation in the world to grow old before it gets rich. John Pomfret, one of the co-authors of the article, has been quoted as saying that before and we agree with the statistics (a sad result of the one child policy). By the middle of this century, the percentage of China's population above age 60 will be higher than the United States, and more than 100 million Chinese will be older than 80.

The article concludes that China is no enemy, but inflating the challenge from China could be just as dangerous as underestimating it.

We agree.