Saturday, February 11, 2006

When people trumpet China's economic growth

Show them this.

The article has several interesting points. One of which is the development of the Chinese economy. According to the Chinese government, by 2050 China will be 'moderately' developed. This does not jive with the forecasts that China will be the economic powerhouse of the new millennium.

I think that the estimates of China's growth are overly-optimistic. The sole virtue China offers the world is a surplus of cheap labor. That is a commodity that is widely available in other parts of the world such as the Indian subcontinent, Eastern Europe, Africa, and Latin America. Plus China is sitting on a demographic timebomb much like Western Europe. By culling the younger generations they are going to face pressures on the industries that they are now developing. An 80 year old is not very useful in a steel mill.