Comments: Will this nation swamp us all?

The key question that China poses for many of us is this; is a plural democratic system that which best guarantees economic success? If China can become an economic behemoth without political liberalisation it will be quite a blow for those of us who argue that democracy offers advantages beyond personal liberty.

One model one might look to is Singapore; described by a senior regional correspondent as 'The world's most successful fascist state.' Singapore has thrived without having a democratic system worthy of the name. But look again and Singapore points to China's future problems.

Already the Lees have worried aloud that the island needs to become more 'creative'. Indeed 'Creative' the electronics company is a great case in point - it makes sound cards and mp3 players. It's mp3 players are very good, they work pretty much as well as the iPod, but the bottom line is they're like an iPod designed by a Communist committee. Bricks are sexier. The result - Apple ships millions more iPods than Creative does Zens.

Singapore's government, like China's, hopes that its people can become innovators in business and design without any of that blue sky thinking creeping into the realm of politics. So for them the question is whether one can compartmentalise liberalisation and innovation. The Hutton camp, myself included, would have serious doubts about whether that's possible - and if you subscribe to the notion set out by the author of 'The J Curve' totalitarian systems hit an economic ceiling far quicker than free societies.

That said those who hope for the collapse of communism in China might think carefully about what they wish for. Evolution rather than revolution will serve the world better in the long term. Not only would it be a massive brake n the world economy it would also add to all the ills such as global warming, nuclear proliferation and the possibly outbreak of a killer virus that so many of us fret about at the moment.

China will be a fascinating watch over the next 15 years. But my hot tip is that by the end of the century India will have outstripped China economically.

Why? Because IP is the oil of the 21st century - it's where the wealth is, and ultimately India is a much better candidate to challenge the US ad Europe as an IP powerhouse than China. The reasons - cultural. Cultures are like oil tankers - they take eons to shift. East Asia and China in particular is still crippled by a cultural fear of failure and by a Confucian intellectual framework that discourages challenging the wisdom of elders and teachers.

Indian culture on the other hand is in love with ideas. Put two Indians together and you have a debate, three and you have the beginnings of a political party. Watch this space

Posted by Jonathan at January 22, 2007 03:44 AM

The review should have mentioned that all 20 companies that feature in the FOrbes 500 are SOEs. While their revenues are considerable, they are protected monopolies in key sectors. Most are inward-looking and barely competitive by international standards. Look no further than no. 14, the Agricultural Bank of China, the basketcase of a pretty looney financial system.

Posted by p schneider at February 10, 2007 12:37 AM