A very dear friend of mine wrote about his feelings on our business dealing with China recently. I thought many of you would find this interesting:
http://www.chinahush.com/2009/10/21/...tion-in-china/
(snip) Next time a liberal far left environmentalist touts collectivism remember these pictures. China avoids international climate change treaties for good reason---to sustain it's dirty, oppressive authoritarian mutated Communist regime that is underwritten by American consumer's desires for cheap goods. Even if the United States met the treaties' goals, it would make little to no difference in the climate at exorbitant damage to the U.S economy.
While China is an interesting country (a unique capitalist/communist hybrid), its state directed capitalism which has proven to be very successful throughout the world. The problem is that it only works when moving people from subsistance incomes (like $500 a year) to middle class ($5,000-$8,000)
Even the Soviet Union in the 50's and 60's was able to create some wealth in a centrally planned economy.
Early stage economies dont have to innovate much to create wealth. All they have to do is add more capital to increase labor productivity (and copy wealthy nations innovations.) Its later when they have to become innovative themselves that the state led system breaks down. This is exactly what happened to Japan and the Soviet Union. Other than a few international companies (toyota, sony, etc..) it has not been able to innovate enough to continues to create wealth as it became richer.
China will suffer the same fate in 10-20 years if it does not lessen the power of the state. The problem with the United States funding the Communist-Capitalist regime of China is that you don't trade communist regimes into democracies. Our trade deficit with China has made it rich and funds its ever stronger and more technically capable military. Meanwhile, its human rights record and record of cooperating with the United States to advance freedom around the world is dismal.
Why is this important? Well our funding of the China regime has created a competitor for the United States for the world's crude oil that it has never had before. Indirectly America's desires for China's cheap goods made by its oppressed cheap labor work force could very well cause a high level of inflation in the USA as the current Chinese model to create these cheap goods with cheap labor does not work without cheap energy.
It is going to be a worldwide auction with China bidding up prices all over the globe while the U.S continues to not go after domestic reserves that are some of the largest in the world.
BRILLIANT HUH?




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