Also, they used to say that World War II was a major force to push US out of the depression. I bet they are thinking about the Taiwan war, which I think China may not be able to win, as an alternative mean to pool them out of the recession.
While I fully believe it was an accident on our part, the way Bejing blew up the whole issue of the embassy bombing in Belgrade, in order to distract national attention from the anniversary of Tianamen Square just smelled of the kind of blatant nationalistic propaganda that a desperate govt would use to consolidate their domestic power.
And now we see the crack-down on Falun Gong adherents and the spouting of stale Marxist ideology as the state "religion" which just makes anyone who understand the psychological implications very nervous.
The next tactic should be a propaganda campaign blaming foreigners for their internal problems or ramping up the rhetoric about US meddling in China's internal affairs with Taiwan. Blaming everyone but your own domestic leadership failures has proven to be the path to aggression in innumerable cases, the most notable in my mind being the Falklands war.
Personally, the real problem is that foreign companies have no guarantees for the safety of their investments. And I don't believe non-chinese have the ability to purchase property in China so there is little impetus on westerners to risk capital on privatization efforts. And besides, you have the cronyism that has been evident in Russia, where state industries that have gone private are headed by former management with little understanding or motivation to respect shareholder rights or economic competition.
I suggest everyone read Mark Mobius' book, "Passport to Profits" where he discusses many of his experiences investing in Russia, China, Thailand, and other nations around the world. He heads the Templeton Emerging Growth funds. I found it to be an excellent book on the business/investment diligence process.
Regards,
Ron
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