Newsweek editor Fareed Zakaria, always someone I enjoy reading, has a thoughtful and thought-provoking op-ed on China in the March 12 issue, inspired by the so-called "Black Tuesday" stock plummet, examining why China continues to confuse many Western observers and defy expectations. He offers a succinct and, to my mind, correct assessment of that:
When a market has gone up 150 percent since 2006, as Shanghai's had, one doesn't need to search for grand explanations to recognize that it's bound to retreat at some point. More important, there is little linking the Shanghai stock market with the overall Chinese economy. It simply doesn't play the role that the stock market does in the United States or Britain. Most Chinese companies raise money through banks, not equities. Indeed, for the past 10 years, Chinese stocks have gone down while the economy has boomed. And yet the day after the market fell, we saw yet again all the same warnings about the hollowness of the Chinese system, the perils it faces and the imminent possibilities of its collapse.
But the good part is what follows--how China doesn't fit into Western (mainly American) models of how countries grow, prosper, and hang together as a polity. Worth a read. He concludes:
Is it so difficult to understand why the Chinese people might be satisfied with their current situation? Over the past century the country has gone through chaotic turmoil almost every decade—the collapse of the monarchy, warring states, the Japanese invasion, civil war, the communist takeover, the Great Leap Forward, the Cultural Revolution. But in the past 30 years, China has enjoyed stability, as well as the fastest growth rate of any country ever. Some 350 million people have been lifted out of extreme poverty. The country has a new, sparkling image across the world. If you were Chinese, you might take some pride in that too.