October 8, 2011

AND 300 MILLION ARABS NEED JOBS (via Bruno Behrend):

Are We Headed For China's Fat Years? (Joel Kotkin, October 04 2011, Forbes.com)

Like Japan, China faces many great, if often overlooked, challenges. There's a devastated environment, growing social unrest and rising competition from other countries, notably the Indian subcontinent. Labor force growth is slowing rapidly, and the country now has up to 30 million more marriage-age boys than girls, an all but certain spur to political unrest. Misallocation of resources by both central and local authorities threatens to create a major property bubble.

Throughout modern history authoritarian and more centrally controlled countries have proved very good at playing "catch up" and impressing journalists. China's Communist regime can order investment into everything from high-speed trains to green technology and massive dam construction. The results -- like those previously seen in Nazi Germany and Soviet Russia -- are often as physically and technologically impressive, although often cruel to both the environment and people stuck in the way.

But once a country reaches a certain plateau of development, as Japan did in the 1990s, the nature of the competition changes; it becomes harder to target industries that are themselves in constant flux. Workers who have already achieved considerable affluence tend to be harder to bully or motivate.

Take the battle for cyberspace. Japan's ballyhooed bureaucracy sought to conquer this frontier through traditional channels. This allowed the internet to become a competition largely among relative young U.S. companies such as Apple, Amazon, Google and Facebook. The much-feared Japanese takeover of the computer and cultural industries back in the 1980s now has petered out into a historical footnote.

And despite the recent, often spectacular gains of China , the primary English-speaking countries -- the U.S., U.K., Canada, Australia and New Zealand -- still control a quarter of the world's GDP, compared with 15% for the Sinosophere. Their combined per capita income is six times higher.

Critically the U.S. and its closest cultural allies -- New Zealand, Australia and Canada -- also have enormous physical advantages. These four countries all stand among the eight largest food exporters in the world. Recent discoveries on the energy front have made North America, particularly the Great Plains, a potentially dominant force in the global oil and gas industries. China lacks the water, and likely to resources, to match up.

But the real edge lies with culture, particularly the English language, which has decimated all its traditional competitors -- French, German and Russian -- over the past two decades. Difficult to learn, Chinese is not likely to replace English any time soon as the dominant language of culture, air travel, science and technology.

This cultural dominion can be seen in the media as well. The U.S. and its English-speaking allies account for roughly half of all the world's audio-visual exports. To an extent never seen before, Anglophones dominated how people think, dress and recreate.

Arguably our biggest advantage lies in the very thing our upper echelons increasingly disdain -- our messy multicultural democracy and our addiction to the rule of law. "The secret of U.S. success is neither Wall Street or Silicon Valley but its long-surviving rule of law and the system behind it," Liu Yazhou, a Chinese two-star general, recently said. "The American system...is designed by genius and for the operation of the stupid."

Posted by at October 8, 2011 6:06 PM

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