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URL:  https://boards.fool.com/quotonly-a-decade-that-is-an-incredibly-30307670.aspx

Subject:  Re: Chinese control of U.S. telecom? Date:  10/8/2012  8:07 PM
Author:  FastMike Number:  405588 of 546048

"...Only a decade ?? That is an incredibly short time in which to go from an economy only just off the bottom to one which you say will become a 'complete' economy..."

Dear harmy :

China's per capita purchasing power parity is like really low. So what is categorized as middle class is kept in check by high housing and food prices:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...

It's in the 90th - 98th ranking.

Further, "outsourcing" is trickling away from China. Some of it is even returning to the South Americas. I've a feeling that we'll see outsourcing towards some of the hard hit Eurozone economies, too.

The demand for labor around the world is declining and the supply is still growing. A bad mix for global growth.

I wouldn't doubt China's potential, I'm definitely with you on that! But I think that, as the 60 Minutes interview brought out, is that China has a "military-industrial complex".

I'm of the opinion that China is going to have to go through a 'restructuring' to borrow a business term. It needs to raise it's middle class PPP, and differentiate government, judicial, military and industrial sectors much more before it become a real economic superpower.

Industry can't be led from behind, which is what a good portion of China's industries, like Huawei, do. I think that companies like Huawei eventually 'deflate' and the next cycle of Chinese business growth will replace it, for the better I hope.

Your bifurcating Fool,
FM
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