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International Investing / China Connection


Subject:  Re: Do you really trust China? Date:  5/24/2007  8:04 PM
Author:  CalimanChi Number:  3122 of 3437


I respect your strong feelings toward your beliefs. I would caution you, though, on claiming China is a communist country. I say this, not to discount that The People's Republic of China was founded by the winner's of the Chinese Civil War, who were declared Communists, but rather to point out what China is today.

China qualifies as a dictatorship, I will give you that. There are different political choices than we have in the U.S., and much censorship in the press (although that is becoming more free over time.)

What it is not, is Communist. China today is very similar economically to the United States of the 1880's-1920's, with Chinese characteristics. Its economic system is an amalgamation of the hardest, strongest, and most severe form of Capitalism with a declining state sector that, although still large, is not the driving force behind economic growth. The China with whom most are doing business is not the China of Chairman Mao, but that of Deng Xiaoping, whose famous words about his preferred economic system were: Who cares if the cat is black or white, as long as it catches mice. What he was saying is, it does not matter if we are capitalist or communist as long as we have economic prosperity.

The Chinese industrialist and business leaders of today are not communists. They chase the all mighty Dollar/Yuan as much as their brothers in the OECD countries. They are hard corp capitalists that would give J.P. Morgan, Andrew Carnegie, and Henry Ford a run for their money.

You may not agree with the political system that China has, but their economic system is anything but Communist, and has been increasingly less so since 1979.

I invite you to talk with me more about this topic if you are interested. I am a former intelligence analyst on China and feel that it is horribly misunderstood by most Americans. I also have no illusions that it is any better than it is. The country has tremendous political, social, economic and other problems that could dissuade investment based on fundamental analysis. The key thing to remember is that analysis is required, not jingoism.



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