China’s Economy - A Warning & A Promise

The relationship between China and the US has been something of a roller coaster, from frosty to cordial, and everything in between. My time as an economic hit man gave me a unique opportunity to see China’s economy ebb and flow as it has developed into what it is today.The Chinese economy has vied with the US for first place among the largest economies in the world. It spent most of the past decades growing and thriving, but in the last few weeks has showed signs of slowing down. The situation facing China holds a warning for the US and much of the rest of the world.The news has been full of talk about China’s stock market and the economic “implosion” witnessed in its numbers lately. While China is likely to weather this implosion, and move forward, the expansion that I saw on my 2009 speaking tour there has slowed. Some analysts suggest this “slump” is temporary and a natural part of the economic cycle. Some have also suggested the sudden plummet is due more to falsely inflated highs than to unnatural lows.For decades, the Chinese tried to abolish capitalism in favor of communism, with catastrophic results. Following that, they again embraced capitalism. The successes that they experienced in the decades after Mao offer insights into the entire development process.I’ve just returned from one of my many trips to Latin America. It is obvious from talking to government officials there and elsewhere that many nations would rather accept loans from the Chinese than from the US and the institutions that serve the US such as the World Bank and IMF. Beijing does not suffer from a reputation for bullying with force and for interfering with the sovereignty of other countries; Washington does.Will that change in the future? Perhaps. But, as one Ecuadorian official told me, “the US has proven that it will overthrow and assassinate our leaders. The Pentagon has military bases in more than 100 countries. China so far has not done anything like that.”I’ve written about China in blogs and books such as Hoodwinked, and my new book coming out in February 2016 will include many more insights about this fascinating country.China’s economy has flourished, growing at incredible rates for more than 30 years. When I toured China and lectured at a conference of Chinese MBA students, I marveled at the commitment of China’s future leaders to creating a healthier China. The MBA students understood that their country had performed an economic miracle – at terrible social and environmental costs – and now they said they are determined to perform a social and environmental miracle. I heard them repeat over and over the idea that their generation would make China the greenest nation in the world.Will they do it? That of course remains to be seen. My hope is that the future leaders of the US and every other nation will challenge the Chinese. Let’s have a race to the top – a World Cup of Green!What matters to you and me about China’s economy are the lessons I learned long ago as an EHM: if we follow the old patterns, the very few at the top will reap the rewards while the people who actually do the work and support the whole system will pay the price. That is a formula to global collapse.The US, China, and other nations need to learn that we are not living in an economic vacuum – we can either all prosper together by focusing on global needs and opportunities, or we can shrink apart by following policies that serve only ourselves. Is there really a choice?Let’s learn that growth to maximize profits at all costs, to idolize materialism and greed, are not goals that can be sustained by corporations or nations. The promise of China’s young people, with their determination to see a better future is what we must foster in our own schools, businesses, and government.