China’s Future, Take 2

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After writing my post this morning about China’s economic future, I got an email response from an American who lived there for nearly two decades and had a different perspective on what China’s biggest problem might be going forward. Obviously this is just one person’s opinion, and I can’t independently vouch for it, but I thought it was interesting enough to share. Here it is:

I read with interest your musings on the future of China. As it happens, I lived for 17 years in Beijing, married, and started a family there.

I believe the macro-level statistics and phenomena you discuss are all trailing indicators. I left China with my family almost five years ago as a large number of interrelated quality-of-life issues became increasingly unbearable. Those factors have continued to worsen since then at an accelerating rate, to the point where the economy is now largely driven by people trying to earn or steal enough money to leave.

The once-thriving expat community in Beijing has shriveled to nearly nothing. The cost of living is approaching world-capital (NY, London, Tokyo, etc.) levels for a miserable existence. The local culture has become increasingly desperate and cutthroat. And Beijing is one of the more attractive places in China to live, work, and raise a family.

People, generally, and Chinese especially, will tolerate all sorts of deprivation in service of a better future for their children. And that is largely what has driven the rapid pace of Chinese development since the end of the Cultural Revolution and the beginning of Deng Xiaoping’s opening and reform policies. My feeling is that biggest challenge ahead for China is when the population at large concludes that a better future for their children is no longer in the cards.

When it happens, it will happen gradually, then suddenly. And what happens after that, no one can say, but a continuation of the policies driving hyper-accelerated GDP growth over all else probably isn’t it.

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