China must move towards market economy -- World Bank

[Ought Six]

http://www.reuters.com/article/2012/...8DR3F120120227

I doubt that China's rulers and their cronies will be letting go of their deathgrip on the Chinese business and financial sectors anytime soon.

[Ross]

IMO they could make a major step forward by simply
introducing greater availability and freedom of information .

# Corruption hides in the dark .

# Transparency empowers competition .


.

[Ought Six]

Since the Commie leaders, generals and their families and cronies own most of the industries in China, transparency and a lack of corruption is very, very unlikely.

[Ross]

Since the Commie leaders, generals and their families and cronies own
most of the industries in China, transparency and a lack of corruption
is very, very unlikely.

Well yeah but compared to some other ways to lift an economy it
is extraordinarily cheap and effective .

[Ought Six]

Originally Posted by Ross

Well yeah but compared to some other ways to lift an economy it is extraordinarily cheap and effective .

Precisely the opposite. Free markets are efficient. They remove the deadwood, lower prices and provide incentive for innovation through competition. State-controlled industries and markets preserve the deadwood state-controlled companies by protecting them and harassing smaller competitors. These companies then do not have to compete with innovative local startups. They do not have to lower prices to match more efficient competitors. The cost of the pervasive corruption in the system increases the cost of making the product, and lowers its quality. It is bad all around.

The only reason the Chinese have been able to do so well thus far is super-cheap labor and a robust industrial espionage effort (the equivalent of free R&D). The cheap labor is going away now. Automation is starting to take over, and that is an area where we can compete quite well. And we are slowly learning to identify and combat their industrial espionage efforts. China's advantages are disappearing, and the balance is beginning to shift in our favor. If we can mitigate our own regulatory, tax and labor handicaps; and that appears to be already starting to happen; then our competitive advantage will grow.

Of course, with our inability to wean ourselves off of massive deficit spending, the Great Recession will inevitably, sooner or later become the Second Great Depression, and then it will all be moot.

[Ross]

I apparently did not express myself clearly .

I meant that transparency is an effective method to lift an economy

[Ought Six]

Originally Posted by Ross

I apparently did not express myself clearly .

I meant that transparency is an effective method to lift an economy

Agreed. I just expect that there will be no transparency in China until the present leadership is removed from power.