My Thoughts on This: From time to time, I find nothing I want to share with readers of this blog. Some of what I run across is so technical that I suspect most of you would simply read three lines and say to hell with it. Can’t blame you much.

One topic that keeps coming up that has relevance for those of you who trust me to invest their money is the role that China will play, economically, politically and socially in the coming years. It matters because there are just so many of them. And the fact that they hold a disproportionate share of US debt.

As usual, Tom Barnett has some creative thoughts on the subject. And did you know, there are over 5,000 students from China here in Gainesville? Many if not most will take home lessons learned here that will influence how the US and China interact over the next decades.

By Thomas P. M. Barnett

NYT story on the 8m college grads that China cranks each year at the cost of about $250B a year.

The comparison that comes to mind is the US post-WWII and the remaking of society and politics that ensued (think of all that change across the 1960s and 1970s).

Yet another reason why I stick with my prediction that China is democratized by 2030. This article speaks more of economic strengths than challenges, but the real danger (which appears only when you get to the jump page) are the social expectations and – if they are met – the resulting political confidence that will be hard to manage on a mass basis.

When people make the effort and sacrifice for that degree, the same-old, same-old factory job won’t do. This forces China into a race up the production ladder alright, and that fits the nation’s desire to base more future growth on domestic consumption. But that desire forces a progressive agenda to fix their healthcare and pension problems, which are not all that different from the US in their ability to mess up economic growth. In China’s case, the two issues combine to depress consumption by forcing individuals to save mightily against fate’s whims. So if the government wants all that domestic consumption-led growth to make all those white-collar jobs happen so all those college grads can be happy (and not too disruptive politically), then major government efforts along the “great society” trajectory will be forced by all these dynamics.

Even if China pulls all that off, and then suffers the natural slow-down in growth that occurs when you start better covering the needs of the left fortunate (Freudian slip, as I meant less unfortunate) in society (a costly proposition), then you move into the next tier of problems: all those college grads now making it and living complex lives will bristle at being spoken down to regarding political debates and government transparency. We saw this big time in South Korea roughly a generation ago. China is now 10-15 years (at best) from confronting that fabulous problem.

All of this is to say that, if you imagine that China somehow becomes truly powerful down the road but will still look like today’s single-party state, you’d be wrong by every experience of history that we know. Once you embrace the markets and all the other great aspects of modern society, the politics must change in reponse – eventually. Yes, the Chinese are adept at postponing that reality.

But it will not be postponed forever.

A truly strategic thinker worries about handling a democratizing China down the road more than some single-party state. A single-party state is inherently cautious; it cannot suffer a genuine overseas debacle because there is no throw-the-bums-out dynamic to stabilize the system. But a democratizing China looks more like the rising US of the late 19th century. I personally don’t foresee that being an unmanageable problem, given all the domestic issues that China will still be finessing throughout that transition, but it will definitely be a new and different China “challenge.”

Referenced from: http://thomaspmbarnett.com/globlogization/2013/1/21/chinas-rising-pool-of-college-grads-and-expectations.html#ixzz2IibJpEs9