Exposure to modern China leaves you with an endlessly expanding list of specific questions*, plus one unchanging Big Question. That big question, in various forms, is where this whole high-speed juggernaut is headed.
Do the past 30 years of growth mean (as many credulous Westerners, and a few assertive Chinese, have assumed) that China is soon destined to dominate everything, everywhere? Or is the real worry whether growth and progress can be sustained at all? Is the Chinese system too strong? Or too weak? Or both?
Will the newest crop of leaders realize, as Deng Xiaoping did 30-plus years ago, that if China is to stay Communist-run, then Chinese Communists will have to relax controls as fast as they can? Or will they keep pumping out slogans about “reform” without doing anything serious to clean up the structural imbalances, the crony-capitalist/communist corruption, and the needless intrusions (like Internet censorship) that threaten the country's ability to move up to fully modern "rich country" status? My attempt to wrestle with all of these questions, especially the last, is in the form of my book China Airborne. [Below, Beijing on my latest visit a few months ago.** I feel unsporting posting pictures like this, but they're part of the reality.]
The more confident people sound in answering the big Whither China? question, the more skeptical I've become of them and their views. On a day when the news out of China includes the still-unexplained multi-fatality crash of a Jeep into a crowd in the governmental heart of Beijing at Tiananmen Square, here is a sample of the attempts to answer questions big and small:
1) “One Big North Korea?” John Craig is an analyst based in Queensland, Australia who produces an idiosyncratically formatted, and very long and detailed, set of reports on Asian and global affairs. He has put up a new one in response to an (overexcited, IMHO) U.K. article saying that the Chinese leadership is taking instruction from the Kim family of Pyongyang. Worth reading.
2) Will Creative Destruction be more creative, or destructive, for China? The latest online discussion from our friends at the ChineFile site of the Asia Society, involving a number of my real-world friends, considers whether China should be considered unusually supple in dealing with world economic surprises, or unusually brittle.
3) “Unhinged in China.” From the always elegant and insightful Ian Johnson, a NYRB piece that seems particularly suited to today's Tiananmen Square news. China has achieved an undoubted GDP miracle over the past generation; like previous pell-mell rushes to industrialization, it has come at considerable human cost. Check his article for more.
4) On the bearish front, What about those millions upon millions of empty apartments? A cautionary report in Forbes by Anne Stevenson-Yang. See this parallel report today in our China channel about the risk of a Chinese version of the Lehman collapse.
5) On the anti-bearish front, see this in Bloomberg on why the Chinese economy keeps heading for a fall, but keeps not falling.
6) Two of my best-informed economics-world friends in China—Michael Pettis, of the Guanghua School of Management at Peking University in Beijing; and Andy Rothman, the chief economist for the brokerage firm CLSA in Shanghai—keep turning out convincing, but differing, assessments of the strains on the Chinese economy. Pettis has been among the earliest, strongest voices warning about unsustainable distortions in the Chinese economy; Rothman has consistently pointed out the system's ability to make adjustments just in time and repeatedly work its way out of jams and corners.
You can find most of Pettis's dispatches on his site, for instance recently this about the rebalancing of China's economy from export/infrastructure- dependence to consumer-led growth: “I believe that 3-4 percent average annual growth rates is likely to be the upper limit for China during the adjustment period [of around ten years] ... If the adjustment period is much longer than ten years, perhaps ... because political opposition is fiercer than expected, growth rates might be a little higher on average in the first few years but the period of stagnant growth would last longer than ten years and there would be a much higher risk of an economic collapse.”