An interesting essay - partly due to what the author feels he cannot say openly. For example:

"...move decisively towards a law-based market economy, free from the deadly meddling of an unlimited bureaucratic power."

I assume the author means move toward a FREE market economic - free from the largely centralised economic control of the Communist Party.

"Turning the political body into a truly modern service body must be carried out - the sooner the better. Unfortunately, these basic issues have yet to be resolved."

Translation: Reforming or moving from Communist control to a democratic? free market economy.

This language reads like Russian commentary from the early 1980s - so this is encouraging.

A mixed Western style economy can co-exist with a powerful central government as Putin's Russia has demonstrated.

Hence I don't think Beijing nationalists need fear that China will get out of control. It doesn't MHO take old fashioned Communist ideology to control the PLA, MSS and vital industries (eg. coal mining, nuclear reactors) just shrewd operators who enjoy public support.

Pete
http://gentleseas.blogspot.com/

"The most fundamental issue related to sustained economic development inside China is to move decisively towards a law-based market economy, free from the deadly meddling of an unlimited bureaucratic power."

This is precisely the same fundamental issue that is facing the USA, as it slides from a crisis caused by disastrous central planning of the money supply, towards greater national socialism a.k.a fascism.

The socialist states like China make it easy to see the nature of governments is to enrich their own members by forcibly taking from the population at large, using force and threats for themselves to do what they declare illegal for everyone else, all the while having the gall to claim it is for 'the public interest', 'the greater good', ‘the community’, and so on.

However exactly the same tendency operates in other governments. The addition of democracy adds nothing but majority rule, which even their own ‘checks and balances’ proves they do not trust. The democratic machinery leaves wide open the possibility of abuses - just as the US government has claimed the bailouts for billionaires are necessary and desirable. Yet the worse it gets, the more people believe the government’s lies and call for more central planning to fix the problem!

“…resolving the deep-seated problems within China will serve as a significant contribution to the world.”

The solution is the spontaneous order and mutual social benefit that comes from the defense of private property and individual liberty. If China can do that, and fight off the attack of the re-distributionists, it will be entering a golden age. The people of the world are disgusted at the arrogance and corruption of the US, and socialism is truly a dead end

George Gu

A timely view into China's pains mid 2009 but overlooking the key issue for China's economy in the short and medium term - debt.

The official 18% against a global alarm level of 61%. Other estimates suggest a 400% increase to 81% is more realistic. Refer to World Bank concerns.

State secrecy provisions conceal key data in China's presentation of GDP growth, but one can still identify flaws by using available data such as energy consumption. Tracing the up and downstream impact on related coal dependent industries from steel, aluminium and cement production reveals a domino effect on unemployment, overcapacity, continual inventory growth, closures, restructuring and growing losses.

Real debt requires an understanding of China's official and unofficial lending practices to reveal substantial parallel shadow economies.

Provincial government debt that has considerable off balance sheet financing, much secured through local government financial corporations and asset valuation manipulation, and the effect of plummeting land sales.

Then there is China's major borrower, AVIC.

This aviation giant has created its own shadow economic network and appears to be acting as a pseudo bank, asset manager, and share warehouse. It both lends funds, and "buys" non-performing assets and shares to keep failing operations afloat especially airlines. In other cases, it acts as a warehouse for shares in failing operations.

You will find the investigative journey most enlightening.

Secondly, in respect to the 40M Chinese that went abroad in 2008.

Were you able to determine -

1. How many were genuine tourists?

2. How many were work related in China's vast offshore operations as well as guest workers and "migrant entrepreneurs" in the Africas, Middle East, Central Asia, Russian FE, Myanmar, Vietnam, the Pacific, Australia, and South Americas?

Arthur Thomas

Hi George,

talking of China's Governance and Economic development and it's future impact on not only China but the world palls into insignifince when you sit back and consider the likely social implications of a generation of spoilt brat 'only child' offspring who have four, mind you four, Grand-parents with only one grandchild between them. God I wish I could have been so lucky! Now add to that the loss of the concepts and attitude forming influences of Uncles, Aunties and siblings and God God what is being produced will be remarkably insular from outside influence and utterly and totally self-centered with a vast desire for instant gratification.

That doesn't augur well for intergration into anything democratic, even remotely democratic.

Regards Keith