“Just as England led the world in the 19th century, and America in the 20th century, so China will dominate the world in the 21st century.” — Jim Rogers
For the past two weeks, I have been touring the great Asian countries of Thailand, Singapore, Hong Kong, China, Taiwan and Japan as part of the FreedomFest Asian “Cruise to Profits.” At the Raffles Hotel in Singapore, Jim Rogers predicted that China would lead the world in the new century and surpass America as the world’s greatest superpower.
While in Hong Kong, I visited the Swinson English Bookstore, which was filled with books about the future of China. A few titles exposed the evils of Mao Tse-Tung and the post-Mao era of capitalism under the new communist rulers. I gradually have witnessed how this giant country has grown from an agrarian poverty-stricken society to the new economic tiger, with economic growth rates exceeding 8% a year since 1980. (I’ve been to China about a half-dozen times.)
In 1997, China took back Hong Kong from the British. Many analysts wondered what would happen to Hong Kong under Chinese communism. The answer is clear: Hong Kong took over China, not the other way around.
Last year at the Milken conference, one speaker suggested that the State Capitalism model of China was superior to the Market Capitalism of the West. Niall Fergeson had a shocking response: During the past 30 years, China has boomed because it reduced government control of the economy from 80% to 20%, while the West has suffered because it has increased control of the economy from 20% to 40% or higher. Good answer!
During lunch at Victoria Peak, overlooking Hong Kong Island, Richard Wong, professor of economics at the University of Hong Kong, told me that he doubted that China would be the dominant power of the 21st century for one simple reason: An all-powerful state has been the tradition in China since way before Mao came along. For at least 2,000 years, the Chinese people have depended on a centrally planned economy, while the West has a tradition of decentralized power in private markets. The entrepreneurial Chinese will move to the West, he predicted, rather than try to survive under Beijing. In short, China will be a great imitator but not a great creator. The West still wins, according to Wong.
Professor Wong had many great things to say about China. I’ve invited him to speak at FreedomFest.
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By Mark Skousen
Editor, Forecasts & Strategies
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