The most astonishing quote from Rowan Callick the other day in his article on China which I discussed here – Draggin’ China down – was this:
The consumption share of China’s economy is low today — only 39 per cent of GDP — compared with 66 per cent in the US, and it is well below the 45 per cent reached in China itself at the start of the 2000s.
The natural number among developed economies is that around 66% of output heads into consumption with the last third of the economy used to maintain our capital base and then add to it. If we had the same proportion as China, the way you would be able to tell would be because every price you would find in the shops would be double what they are now but you would have the same money income to spend. You would be poorer than our ancestors who lived in Australia during the 1920s, although our technologies are better (everyone has a mobile phone today). There is not a single thing we can learn from the Chinese about managing an economy, but there is plenty they could learn from us.
And who knows how much of their productivity is wasted in developing its armed forces? The one certainty in the world is that no one is going to attack China, so what are all those armaments for?
When we were last in China, among the strongest memories I have are of the “ghost cities” that we would occasionally pass by on the train which we could tell because there were no clothes hanging out to dry on the balconies. They are the most absurd Keynesian/Marxists in the world.
They have a great potential future, but the road they need to take would be to follow the paths taken by Taiwan, Singapore, and until recently Hong Kong. Socialist centralised control is a dead end.