boomtown wrote:Its the power of free markets - the US was the first to harness capitalism properly and it got a massive head start. Look at the economies around the world and the ones with the least restrictions are the strongest.
Don't think manufacturing is going to help China that much more - they are pretty close to their ecological limit as far as how many factories they can support and they are light years behind in the service industries (banking, finance, law, education) which is where the real money is made nowadays.
India if anything has a head start on China because of their use of English. But they are so terribly bureaucratic that there is no such thing as free markets in India which is what is holding them back.
Interesting perspective.
Capitalism is a double edged sword - and I tend to look through the fog of the banking system to where the real wealth is (not just the 'money' which under capitalism is also exposed to the vagaries of market sentiment - just ask George Soros).
If the dollar is allowed to settle to its real worth, China is the strongest economy in the world - and this has less to do with free markets but with production of goods and services that the world wants to buy.
For many decades Japan was the second largest economy in the world, but has paid the price capitalism requires after the boom. The US hasn't started paying yet for its excesses - its hard for me to see why the US economy won't fall harder than Japan's did. Japan, after all, still is a quality manufacturer and innovator, but increasingly China is manufacturing the Japanese goods and is also now competing at the higher levels - innovating etc.
China has developed faster than Japan did post the war - and it has so many more advantages than Japan, not least the population, land and resources.
India too is changing and will vie with China in its progress. Where call centres were common, there are now full service industries. Indian companies are well capitalised and growing fast.
Anyway - we are spectators in this game.. it will be most interesting to see how things develop. I mean, I didn't see the fall of the Soviet bloc, the wealth of Russians flooding London, New York etc - nor did I see that China would become the power it is now.
Cheers,
Shafique
