[quote]If you see that skyward trend continuing even after the average Chinese PPP per capita reach beyond $20-25k, then yes, you got a bubble forming.[/quote]
The $64,000 question is, can Chinese PPP even get to 20k in the first place? The growth in the other two (Taiwan and South Korea) was driven by exports. As you’ve correctly observed, Taiwan and South Korea taken together have something like 30 million people. They could grow their GDP’s to developed country level via exports without making a big dent in global markets. China has already saturated the world with its exports and it’s still at something like $6k per capita. Now it has to start focusing on developing its domestic consumer, and that’s fairly unprecedented at that level of GDP.
[quote]Beyond that, I’d offer that China’s educational system is nowhere the task necessary to bring a country of that size, populated with largely subsistence farmers, forward to a point where the average person is earning $20K – $25K per year. Where does China rank in terms of Top 100 International Universities?[/quote]
China’s educational system is actually quite good. And for that China has Mao and Soviet Union to thank. When Mao came to power, China was an extremely backward country, industry was nonexistent, adult literacy rate was something like 20%. By 1980, literacy was up to 80%, and conditions were in place for capitalist industrialization.
I recall reading recently that the most likely undergraduate alma mater of U.S. Ph.D.’s is currently Tsinghua University, followed by Peking University.
[quote]I wouldn’t define China as a bubble, per se, but, rather, another Soviet Union. There was justifiable fear when the Soviets put Sputnik up in 1957, but it was the US that put a man on the moon 12 years later after Kennedy’s call to action.[/quote]
That is a poor analogy. Chinese growth is driven by private enterprise that is only lightly constrained by the communist government. There was essentially no private enterprise in the Soviet Union (except briefly during the 20’s and then just before the collapse in the late 80’s). They found a system that keeps corrupt officials and incompetent bureaucrats out of private entrepreneurs’ way as much as possible. Why do you think everyone goes to China to build new factories, and not, say, to Cambodia or Indonesia, even though Cambodian and Indonesian workers are clearly cheaper than Chinese?
