China

The prospect of China ruling the world is still far distant. At present it is a floundering behemoth and there is no clear narrative to challenge the Enlightenment values of West. I do not see the drive to experiment and innovate, the prevalence of free argument and exchange of ideas, which drive successful economic performance in the long term. I also do not see that other key competent: the rule of law. What I do see is a deeply corrupt society without the necessary checks and balances. In comparison to India, it is desperately short of innovators. Chinese citizens can no more hold their governments to account than can their shareholders exert meaningful influence on company managements. China cannot build its economy for ever on a savings rate of 40% of GDP, or exports growing at such a rate that they will soon constitute half of the world’s trading goods. The model is breaking down because the Chinese need to save less and consume more. The key weakness is that the Chinese do not trust the future and do not trust their Communist government. I do not think that presages world domination. I think it is more likely to result in political turmoil at home.

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