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'China Syndrome' at Davos

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Stephanie Flanders | 10:59 UK time, Thursday, 28 January 2010

Davos: It's "decoupling" day in Davos. Or that's how it feels. Everyone's talking about the Eastward shift in the balance of global economic power - and China, especially, as the key engine of global growth in 2010.

January 27, 2010 in Davos, SwitzerlandEven the World Economic Forum is moving its centre of gravity Eastwards. The WEF is holding a special Davos-style event in Tianjin later this year. "At least it might be a bit warmer," one Central Bank President muttered to me while brushing the snow off his coat. We're expecting 12cm of snow here today, and not everyone came well-equipped.

But "decoupling" doesn't seem the right word for what's happened to the relationship between the emerging and advanced economies. A better word would be "deconstructed".

How so? Well, it's certainly true that the emerging market economies have brushed off the troubles of the major developed economies in fine style. A year ago, one of the things that was making participants extra-gloomy about the crisis was the perception that the developing economies were being sucked into it as well. News was coming in of mass lay-offs in Brazil, as domestic car production fell off a cliff. Exports across Asia were falling at double-digit rates.

But for many of those economies, all that now seems like just a bad dream. Most of the Asian tigers have come back roaring, their long-term development story intact, and their position relative to the US and Europe rather stronger than before.

HSBC hosted an interesting breakfast on the subject this morning with the FT. A new report by HSBC's chief economist has the key headlines for the story:

"No longer is it possible to argue convincingly that the US or European nations determine the agenda for the world economy as a whole. 2009 will surely go down as the year when we both uncovered the scale of the crisis in the developed world and celebrated the resilience of much of the emerging world in the face of what appeared to be a perfect economic storm. We found, in particular, that China was able to stand on its own two feet, capable of delivering rapid economic growth even while its export engine was badly misfiring."

It's all true. It's also true that China has some important challenges to address in managing its economy - short-term and long-term, which will have important consequences for all of us.

But I wonder whether we've gone from expecting too little of China to expecting far too much. That's what I mean when I say the relationship has been deconstructed.

China does indeed need to rebalance its economy in favour of domestic demand. I've written a lot about that in the past, and there was much talk about it this morning. Reducing its chronic over-saving will help deliver more efficient, and more sustainable economic growth in China. And it will help the rest of the world as well.

But it won't magically provide a new engine for US and European demand. Nor will it make the problem of global imbalances go away.

This might sound obvious. But listening to the rhetoric of US politicians in Washington - not to mention many economists and officials here in Davos - you could easily come away with a different view.

6 January 2010: A bank clerk counts dollars and yuan notes for a customer at a bank in Hefei, in central China's Anhui provinceThe way US congressman tell it, all that's needed to transform the outlook for US exports (and jobs) is a stronger renminbi. And even the likes of Martin Wolf, the FT's distinguished economic commentator, can sometimes give the impression that a balanced China will balance the world.

It won't. For the simple reason that China, for all its new ascendancy, is still just one economy - about one-fifth of the size of the US.

As the UBS economist Larry Hathaway points out, even if the Chinese current account surplus (in effect, the "excess" that it lends to the rest of the world in return for buying so many Chinese goods) fell to 2% of GDP over the next few years, instead of the 6% of GDP now forecast, at most that could only add about 0.2-0.3 percentage points to US and European annual growth. And that's if those countries were able to take full advantage of the shift in demand. It's far from clear that they would.

True, in their current state, the US and Europe will take every scrap of growth they can get. But it's not the solution to global growth or global imbalances. Nor are you going to make it happen by simply pushing up the Chinese currency.

If there's one thing that the average Davos participant and the average US congressman has in common it would be a fervent belief that the Chinese need to revalue. They do - and the signs are that they will, probably in the second half of this year.

But remember, we've had enormous swings in the value of the dollar and of the yen in the past 30 years. It hasn't made a big difference to the rate of growth of imports or exports in the US - or the Japanese desire to save.

China's going to play an increasingly pivotal role in the global economy in the next few years. But it's one piece of the global economic puzzle coming out of this crisis. It can't solve the whole thing.


  • Comment number 1.

    I prefer bifurcation, what's in a word?
    What is clear for the UK economy is that we can't solely rely on hitching our wagon to the US or even Europe to squeeze a scintilla of their growth.
    We need to act decisively ourselves to get our economy producing what the world wants, whether services or manufactures - a resilient, balanced, responsive economy. Can the market provide that (and can we afford to wait?) or do we need to nudge the economy in the right direction through leadership and a little government facilitation (or whisper it quietly intervention?).We need to take responsibility ourselves.

  • Comment number 2.


    The policies of the not so nice have led us to catapult a totalitarian regime into the worlds economic hot seat.

    I hope it was worth it. Thanks Nixon.

  • Comment number 3.

    There is a deafening din of chickens coming home to roost. We have deliberately destroyed most of our manufacuring base; we have refused to make our education system deliver technically and scientifically competent workers; we have deliberately focused on low-skill, low-paid jobs in retailing and services; we have faffed around while other countries build up a technological advantage in "green" industries; we have over-rewarded socially-useless parasites in banking and finance; . If we are to develop a compatitive advantage in anything, where on earth is it going to come from?

    I see long, slow decline.

  • Comment number 4.


    A crowd of economists and financial wizards milling around five star accommodation, predicting the financial future. As though they did such a great job in the last ten years! Why didn't they invite Gordon Brown to give the keynote address? That would have set the scene brilliantly.

    Let's see how great BRIC looks in ten years time - after a decade of belt-tightening in the bankrupt West. They've had to lend us the money to buy their stuff in recent years. We'll now be paying them so much interest we won't have any left to buy more stuff. They will have to create their own internal markets. Meanwhile, WE will have to start becoming more self-sufficient.

    At least this might begin to help the environment.

  • Comment number 5.

    "China's going to play an increasingly pivotal role in the global economy in the next few years. But it's one piece of the global economic puzzle coming out of this crisis. It can't solve the whole thing."

    Or. More accurately put. It won't solve the West's economic problems. Asia doesn't need the West to solve its problems. The reverse is not so for the Bilderbergers. They have set themselves up as our saviours. Now they need to prove that they are capable of undoing Friedman's knot - with which they have throttled the Western peoples!

  • Comment number 6.

    Nice little report, but I thought your statement on savings was very telling:

    "Reducing its chronic over-saving will help deliver more efficient, and more sustainable economic growth in China. And it will help the rest of the world as well."

    I actually think we need a lot more "chronic over-saving" here in the West. Of course that doesn't sit well with those, like GB, that want us to spend, spend, spend - and are prepared to fund various scrappage schemes, with tax payers money of course, to keep the bubble inflated. A strategy that resulted in the financial tremors of 2008, 2009, and which GB denied responsibility for, blaming some abstract "global recession". Of course the public at large doesn't need that much encouragement to spend, and their love of credit cards has been a sight to behold these last few years, but still...

    When politicians, and economists, talk about "economic growth" they are really talking about consumption, and that means spending by you and me, the more we buy, the happier they are (as long as their supply of tax revenue doesn't dry up of course). But people are consigning themselves to a lifetime of debt, and endless work, by following these politicians advice to spend, rather than save. So please, don't talk about saving as if it is an illness to be eradicated.

    I also think the USA, though its situation is dire, is a lot stronger than we give it credit for. Do the Chinese have companies such as Microsoft, Oracle, Hewlett-Packard, IBM? The USA still has what Warren Buffet referred to as a "moat of competitive advantage". Their problems are not so much business as social, a complex nightmare of politicians own making. But that entrepreneurial and business culture, like silicon valley, is very hard for the Chinese to replicate, especially since they are fundamentally a communist dictatorship. Why else their massive investment in industrial espionage, and plain old stealing of software (witness the hacking of Google China recently). Yes they can churn out the toys and other goodies, using low cost, low skilled workers, for the debt-ravaged consumers in the West, but then so could the Japanese...

    As China becomes wealthier, it will become a more expensive place to manufacture - enter stage left the next low cost manufacturing centre - Africa. Why do you think the Chinese have such a fascination with Africa? It's not just the natural resources - they see it as a massive low-cost manufacturing farm of the future. They will find there all the slave labour they could dream of - and given the Chinese record on human rights, and health and safety, I use the "S word" advisedly.

    Interesting times, it's going to be interesting to see how things pan out...

  • Comment number 7.

    #4 Bertram Bird

    "Let's see how great BRIC looks in ten years time - after a decade of belt-tightening in the bankrupt West. They've had to lend us the money to buy their stuff in recent years. We'll now be paying them so much interest we won't have any left to buy more stuff."

    Simplistic, but basically true.

    This captures the fact that it's not simply a question of the US passing the baton to China & the world carries on.

    The fundamentals show that the capitalist system has to continually accumulate (growth, growth, growth) & that to do so it needs to loot (bringing peasant labour into the world market & plundering the earth's resources).
    The trouble is the looting can't go on forever (perhaps few of you have read Rosa Luxemburg's The Accumulation of Capital).
    The ecological crisis (not just climate warming, but habitat destruction, desertification, etc) testifies to this.

    This is why the system is becoming cannabalistic - that is, attacking the worker's share of the cake to maintain/recover profit rates, which only affects consumer demand & hence profits in the longer run.
    What suits individual capitalists isn't necessary good for the capitalist class.

    China is heading for its own crisis & the western world will have a secondary, more far-reaching, crisis.

    The baton is not being passed on, it is falling to the ground.

  • Comment number 8.

    I had an interesting note from a supplier in China this morning.

    Apparently a lot of workers resigned at the end of 2009 to go to their home towns inside China as the minimum wage for the countryside has been increased to a similar level as in the coatal region. This appears to be due to new infrastructure projects being built in the interior which are `waving their hands' for workers. Nice turn of phrase there.

    I expect with the Spring Holiday in China likely to be on us in the next fortnight that more workers will be happy to wave back and take a job closer to home. This sounds very much like things are improving for the working people in China which can only be a good thing.

    This suggests that the rebalancing of the Chinese economy for domestic demand is work in progress.

    This does create opportunities for UK factories in that costs in China will inevitably increase, freight costs from China have returned to a high level and are likely to stay there, and the prevailing rate of exchange between the US dollar and sterling remains as it is. Given also that some China factories now want to quote prices in Euro the rationale to move production to China as it is cheaper is becoming less advantageous. I appreciate that a couple of swallows don't make a summer but the rebalancing of the global and Uk economy may have just started.

    Now if the UK had a government as committed to the UK as the Chinese government is committed to China then who knows what could be possible? Perhaps we could have some waving of hands over here.

  • Comment number 9.

    Afternoon Stephanie,
    an excellent, well balanced article that exposes the myth that China sitting on all those Dollars will rescue the West--it can't and it won't.
    China has its own mountain of problems, its government recognises them and it is addressing them systematically in its own measured way.
    What a difference to our Government in England who are playing for time and hoping like Mr McCawber that "something will turn up".

    In your previous pieces on QE, if it doesn't work and banks don't lend more, can we have all the money given to them (for nothing) back then?
    That would focus a few bankers' minds!

  • Comment number 10.

    "I also think the USA, though its situation is dire, is a lot stronger than we give it credit for. Do the Chinese have companies such as Microsoft, Oracle, Hewlett-Packard, IBM? The USA still has what Warren Buffet referred to as a "moat of competitive advantage". Their problems are not so much business as social, a complex nightmare of politicians own making. But that entrepreneurial and business culture, like silicon valley, is very hard for the Chinese to replicate, especially since they are fundamentally a communist dictatorship."

    Anyone recall the opening ceremony of the 2008 Olympics? Which delegation got the largest cheer? It wasn't the People's Republic, but Taiwan - the technologically most advanced nation on Earth. One only has to look at international B2B websites to see the vast symergies between the P.R.C. and Taiwan.
    I repeat. China does not need the West. Neither does Taiwan. Which has inexorably moved away from its post-1949 best friend and, toward its cultural ally.

  • Comment number 11.

    So if China needs to rebalance its economy in favour of domestic demand and we need to rebalance our economy to reduce domestic demand, reduce debt and increase manufacturing exports then surely there's a deal to be had here?

    No? Well I thought not so the only alternative is stop making things in China and repatriate all that manufacturing we "offshored" to keep shareholders and bankers happy.

    All that said how does Steph's analysis fit with this piece of intelligence?

  • Comment number 12.

    At Christmas I was researching a present for my goddaughter.
    She is at an age when Hello Kitty means an awful lot.
    However I was amazed that therewere in excess of 150 products on Amazon alone, all made in China, from the Hello Kitty range.
    Now I like cats, but surely there is something wrong that people are allowed to waste so much money on so much tat.

  • Comment number 13.

    China isn't going to take the leadership role in the 'New Economy'. It neither wants the role nor has the capacity to do so.

    In some ways that causes us Western economies something of a dilema. We all need impetus (we've all tried stimulous and that hasn't worked!). Impetus would surely come in bucketfulls if it appeared that China were to take on the dominant role that the US has enjoyed.

    As it is we now face the harder task of trying to re-build our economies on far firmer foundations than the 'money' orientated ones of the past. This will be more difficult as it appears that the US and UK are still clinging to their debt finance addiction. Until both of these nations turn their backs on the philosophies of Goldman Sachs, Sorros, Buffett and JP Morgan we wiill continue to wallow in the pit of this depresion.

  • Comment number 14.

    "...... so the only alternative is stop making things in China and repatriate all that manufacturing we "offshored" to keep shareholders and bankers happy."

    Which won't work. Certainly for Europe. The raw materials aren't available. That's what WW2 was all about. Germany didn't have the overseas colonies to provide these. So. They simply expanded eastward.
    We in Europe, in particular, need to move away from a consumption/credit-based economy and, toward a needs-based materialistic society. The European workforces also needs to be far more geographically and linguistically mobile in future.
    European nations are no longer imperial. Previously non-viable resources in Europe will become more viable over the next few decades. Coal has already ceased to be the non-viable resource that Margaret Thatcher considered it to be. In the end, nations will cease to be relevant to this discussion. The World is now composed of various trading blocs. Of which the E.U. is just one. Even members of this bloc have already joined a newer Mediterranean bloc - hoping to benefit from solar energy generated in the Saharan nations.

  • Comment number 15.

    not bothered about china I'm bothered about council tax.

  • Comment number 16.

    #14 Harry Webb,

    Now I've often been accused of promoting what I would like to see and not what is but your analysis is far more like Pink Sky Thinking.

  • Comment number 17.

    Having read my Deng Xiaoping Three Represents Theory, the Twelfth Five Year Plan and the latest Chinese import and export restrictions I'll realise they know they are not decoupled.

    What an advantage to have a Five-year plan with no election at the end to spoil the next one!

  • Comment number 18.

    Yaddah yaddah Stephanie

    The Biggets non-event of the year with plenty of completely useless hypothesis about this and that - talk about collective fiddling whilst economies burn.

    At least your observation that China is actually still quite economically a small player is correct and it faces plenty of obstacles both domestically and globally before getting anywhere near 'big economic status'

    I guess the latest ruse for those clutching at straws is to think China will somehow come riding to the world's rescue which is pretty pathetic.

    Concentrate on the real stuff. Can we get a new blog entry (since this is your 3rd in 3 days....)?

    Focus back on the storm clouds gathering closer to home - enough of this misdirection.

    If you can't then let somebody else takeover the economic comment reins.........

  • Comment number 19.

    Not sure I get your point Foredeckdave. My analysis has no holes in it. The coming century is going to be very painful for resource-strapped Europe.

  • Comment number 20.

    There seems to be a scarcity of 'banks really are good chaps', and the 'green shoots are sprouting', or 'I'm wearing rose tints' types today. Could that be because of the announcement of more job losses of the four figure strength in the pipeline.

    BTW Foredeckdave I see in Cornwall the public sector is looking like a 20 percent shrink. Nothing to do with me and my limited way of thinking, just they seem to have realised the money has run out. The problem is the longer it is left the worse it will be. It could get a lot worse. Unfortunately Mr Browns way of thinking is simply to spend until denied funds, asking him to stop spending is like asking a morbidly obese patient not to eat to excess. I see there is horror reported that 10,000 may lose their jobs in the councils of Wales. Little mention is made of the fact that pro rata that is pretty much the number taken on in the last year in the public sector in Wales based on the UK total figure.

    Stanilic - Ikea in the US moved to restarting some US based production about 6+ months ago. If a properly structured green tax was applied imports would slow. Much of what has happened is simply very basic manufacturing pollution has moved around the planet, unfortunately it is still the same planet. I thought that the China stitch up at the Copenhagen bash was significant, they want to slow any pollution steps or penalties IMHO. The western consumer will catch on in time.

  • Comment number 21.

    Nice article, makes some very valid points about china and overall growth. So basically we have to make our own growth. However we would make better growth if we hadn't allowed our own econmy to be hoolowed out and shipped to china, we would have more reasonably well paid workers to buy goods for starters.

    Even the economists who supported this hollowing out on the basis it reduced our costs could not figure out where the replacement jobs would come from. Basically we were left with people writing articles in the media and people marketing and selling goods and services to each other. No exports.

  • Comment number 22.

    Keynes. Bancor. SDR.

  • Comment number 23.

  • Comment number 24.

    "Yes they can churn out the toys and other goodies, using low cost, low skilled workers, for the debt-ravaged consumers in the West"
    Yes this is true , However these " low skilled low cost " manufacturing techniques were used in the industrial revolution which has elevated this country to becoming what was once , a world superpower . However Chinas potential goes beyond producing toys and electronics. Chinas markets have great appeal and potential for western companies to trade in . With over 1/6th of the worlds population living in china, demand for basic commodities has been shifted towards the east .
    However, with the difficulties with piracy ,exchange rates and the constant threat of regulations from the chinese goverment , how can western companies begin to trade in such a hostile business enviroment?
    emphasis is strictly on china and how it will conduct itself in the coming years which could either have a positive or negative effect on the world.

  • Comment number 25.

    Good article and some interesting comments there.

    But how negative to read “ByeByeBritain”’s point of view.. Africa has been struggling to pay the interests on the debts, which was supposed to be helping Africa!?? whereas China is there to help building Africa’s infrastructures so that they can develop and come out from poverty! Of course China is looking to benefit for helping them, but at least it didn’t invade other countries for their natural resources!

    The advantage of lack of democracy in China is that Chinese government is more committed to its economy, as it doest need to worry about how to create bubbles in the economy in order to win the next election.

  • Comment number 26.

    There are a number of points here that could be developed but we need to understand the nature of Chinese industry and aspirations.

    The fact that China has been used to manufacture cheap tat for the western consumer should not be a reason to disparage the industrial skills of the Chinese. For example, I know of a number of factories in China which spin very high quality carbon fibre: a technology they have been more than willing to learn from the west.

    The consumer tat will eventually go to some other poor country anxious for cash to invest in industrial development.

    Two hundred years ago China manufactured a significant portion of the world's goods much to a very high quality. In recent years China has merely recovered the historical position it was forced to abandon by foreign invasion, colonisation and internal political collapse.

    Lastly we in Britain need to understand that the days of empire are long gone. Now we worry about the import of `mud' destroying our towns and cities. The sun has truly set on our former aspirations as a world power.

    We need to redefine ourselves but first we must learn, like the Chinese have learned, that before there can be politics you must first put a roof over your head, clothes on your back, boots on your feet and food on the table. I hope we don't have to go through the terrors and famines that the people of China endured for over a century but we need to look closely at our economy and ask ourselves how are we going to pay our way in the world in the future?

    China has learned technology from us, we can learn something from them. We just need to work out which bits we want and bolt them onto our own institutions: much as they have done.

  • Comment number 27.

    #26 stanilic,

    At first glance that all sounds very reasonable. However, I think there are a few flaws in the argument:

    If you were thinking about the UK in either the 60s or early 70s then you may have had some justification for saying that we must forget our history of empire. I really don't think that same public, or even private, miscomprehension still exists. If the UK considers itself a world power then it does so on the basis of financial services and military power.

    I think that you will find that 200 years ago China did not manufacture "a significant proportion of the world's goods". They did have a competitive advantage in certain product types for a relatively short period (especially ceramics). There is a strong argument that their centuries of decline as an economic power was not just caused by external threat but also by internal stagnation.

    I do agree that we must re-learn how to, "put a roof over your head, clothes on your back, boots on your feet and food on the table." In order to do so, we have to demand that China actualy grows up and stops playing at being a poor developing nation ie artificially manipulating its currency, closing or limiting inward investment, breaking copyright and coprright fraud, etc. etc. We must claim the right to re-develop our manufacturing in critical industrial areas even by employing protectionist policies.

  • Comment number 28.

    There are 3 major elephant's in China's corner that NOBODY ever seems to discuss...

    1). The bad loans on every major domestic lenders books are hugely under-estimated. Independent estimates put this figure at between 35-40% and that was prior to the banks issuing in excess of 1 Trillion in new loans in 2009. When I lived in Chine between 2006-2008 E&Y (China) released a report to this affect, which was promptly retracted the very next day after Beijing's interference.

    2). The return on Investment is China is miserable. The increase in investment required to increase GDP is vast, Investment made up approximately 50% of GDP in 2009, even at the height of Japan's bubble this figure was c.35%.

    3) China has a rapidly ageing population that everyone knows about but never seems to consider! This is also a major problem for the West, but we in the West became wealthy before we aged - China will not have this luxury.

    My humble prediction (5-10 yrs away)... Banks will eventually have to realise their non-performing loans, Beijing will step in to bail them out (as they did in 2004, I think), this time it will not be the $350Bn they got away with last time but more like $1Trn. This will put a halt on lending and investment as Beijing cannot afford a 3rd bail-out. GDP will be severely constricted. Also, the Party will eventually have to provide a social safety net to avoid civil unrest and deal with their ageing population (they do have measures in place now but they are negligible for the size of the population). $2.4 Trillion dollars in reserves sounds like a lot but doesn't go that far when you have 1.35 Billion mouths to feed.

    Forgive my bearish attitude but I am bored of reading 1 sided articles and for the pedantic amongst you, please forgive any minor inaccuracies on the figures provided above, I have not had time to check specifics.

  • Comment number 29.

    27 foredeckdave

    I agree there are probably gaps in the analysis. Not so long ago I read an economic history paper based around Chinese manufacturing in the late eighteenth century and the figure which sticks in my mind was 13% of world trade. Now I can't find that reference and so find myself struggling on that point, but the historical position of China is a valid point to make.

    With regard to the `empire' argument the outward expression of superiority has I agree disappeared but the inward feelings associated with that still persist. I work in international trade at the practical level but keep encountering what are best described as Euro-centric values from relatively young people who think they are doing the Chinese, the Indians and the like a favour by bestowing their purchase orders upon them. I endeavour to discourage these attitudes and with a bit more experience they are dissipated but the arrogance is in the culture much like the British class system. Some humility would not go amiss.

    I have watched China grow over the past twenty years and it is impressive. Sure, as with everything there are the downsides largely related to the same deep seated cultural sentiments which exist on our side. The Chinese have a great fear of chaos, a distrust of foreigners and the Party has a very ruthless aspect to it when challenged. In my view these are the product of historical experiences which will take time to resolve always assuming the tide of history allows it.

    The important thing is to learn from the example and experience of others. It saves you a lot of time and trouble.

  • Comment number 30.

    "China's going to play an increasingly pivotal role in the global economy in the next few years. But it's one piece of the global economic puzzle coming out of this crisis. It can't solve the whole thing."

    No really? I'm a mere engineer, and I worked that out ages ago. Maybe I should offer a few more thoughts about the current centuary to kick around.

    Gun boat diplomacy is no longer viable. Money is the on going power. UK has none, never will have, so forget the world stage, and be happy as a bit player. Tony Blair (currently performing at----) is the last of the UK's Global Prime Ministers real or imaginery. The current incumbant is becoming embarrassing on Afghanistan, and heaven help us if we had to offer funds elsewhere at the same time.

    If you want to tell us something interesting Stephanie, how about an in depth economic study of Switzerland, or Luxembourg, it could have more relevance to UK in the future than China.

    UK has few natural resources. Irrespective of global warming, fossil fuels will cease to be a viable proposition for energy generation, world wide. The sun in UK is unreliable, as is the wind, but we have loads of sea, so logically we should give it our best shot. Other continents will look to other energies, and where it is hot, logically they will use the sun. Maybe if we were quick enough, we get steal a march, and earn a few bob.

    As UK becomes less prosperous, and areas with a better climate become more rich, the economic migrants will move on, thus reducing the load on self sufficiency. It amazes me why anyone would move to UK by choice weatherwise.

    OK not the solution of the immediate problem, but if we are looking for a new leader, I would prefer someone who demonstrates an understanding of the current and future problems of this country, to some glory seeker who sees his future as a star player on the world stage.

    A bit off the subject, but still linked to economics, if we are not fighting the terrorists in Afghanistan alone, who are we fighting with?, because if All the world was represented proportionately there would be so many troops, the terrorists would be snuffed out in days. Surely a better economic solution than GB Inc.

  • Comment number 31.

    I find some of the commentary myopic. True, China and Asia won't solve the problems the West has this year or next - their economies simply aren't big enough...yet. But it will come to dominate. The shift of economic power from west to east has accelerated following the largely western financial crisis. This transformation will be the biggest economic, political and social event of our and our children's generation. The West, in particular the UK, will de-emerge. I have travelled to Asia regularly over the last twenty five years. The dichotomy between West and East couldn't be more acute. Asians are more conservative, have a much much higher work ethic, are passionate about education, defer their consumption in favour of future generations and have an ingrained sense of collective responsibility and civic consciousness. So Stephanie, more articles of this ilk please - we in the West have much to learn from Asia.


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