U.S./China Business Dynamics

Marketplace is broadcasting from Shang-hi all next week.

Hearing their "pre-game" warmup pieces about the Chinese economy led me to some very high level thinking about the socio and political economic relationships betwen the two countries.

Admittedly, this is simplistic, but I have to start somewhere:

China is still a communist country, at least in name. However, there is a rising tide of business leaders and philosophers that are trying to steer China to a market based economy, so as to increase their own riches, and that of their country.

Now, I've been trained to believe that true free trade gives the greatest benenfit to the greatest number of people. However, I know that true free trade, without politics, is an ideal that is likely to never be achieved.

There is a rising business class in China. More and more people are getting rich. Suppose it is only a matter of time before these neo-millionaires begin to influence their government, and indeed become candidates themselves. I don't know much about the Chinese political system, but I do know that money finds power. Once in control of the government, these new market bred Chinense leaders would push and defend market reforms that, if successful, would probably lead to China becoming the world's largest economy.

An interesting question to the U.S. politicians and business leaders is: Are we to support and encourage this market based China? Personally, I am in the school of thought that says a rising tide carries all boat. So, I'd be happy to see China's economy explode. However, I know that there are the nervous foreign policy types out there that are afraid of China becoming more "powerful" than us. Furthermore, current U.S. business leaders would love to tap into the Chinese market of 6 billion people, but will they really be able to? My guess is that many U.S. businesses would eventually be shuttered due to cheaper production alternatives in China.

This all leads to an interesting potential conclusion:

U.S. politicians and business leaders praise the merits of capitalism and a free economy. The same groups lament the poor, outdated Chinese system of state rule. However, are the best interests of these business leaders really served by reforming China? Or, would the status quo be safer for them, and thus lead them to oppose market reform in China?

Just curious.

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