Not withstanding the achievement, that’s still a lot of very poor people. The question most often asked by colleagues and friends is whether China is in a bubble. I don’t know. Certainly there are some bubbles in the economy, such as Beijing and Shanghai real estate. Growth is undoubtedly slowing in most sectors. But the fundamentals driving further growth, probably in single digits rather than double digits over the longer term, seem sound. More interesting is the massive adjustment China seems to be making from a manufacturing to a service-driven economy and the sometimes-painful urbanisation which is accompanying this. For the past couple of years, the smart money in the market has been on sectors such as health care and tourism.

As HSBC pointed out in its newsletter, China’s trade within the Asian region, as well as other emerging markets in Latin America, the Middle East and Africa, will overtake that with Europe and the US fairly soon. It’s called ‘The New Silk Road’. The original Silk Road is a mix of fact and fiction. Marco Polo’s father actually ‘discovered’ it before his more-famous son. But he was not the first. Persian (Iran) traders had been riding the route on their camels for centuries beforehand. The new Silk Road is more about oil and other resources than consumer goods. About 40 per cent of China’s oil imports are from the Middle East. Then, as now, the Silk Road consisted of several different routes for bilateral trade. The problem for Europeans, though, was the Chinese didn’t want much of what they produced, so they had to pay for the silk and spices with silver.

To get around this, the East India Company engineered a demand for opium, which it produced in India, and which eventually led to the series of Opium Wars and a trade shut-down. China has had many trade shut-downs throughout history. During Mao Zedong’s era, trade was minimal, until his forwardthinking successor, the much-loved Deng Xiaoping, introduced the open-door policy in 1978. And the rest, as they say, is history. More delicately, the cost of getting things done in China is too high for most Australians to contemplate. It’s the cost of freedom. There’s no index to measure progress in this regard, but anecdotal evidence points to liberalisation across a whole political spectrum. There is a committee, for instance, looking at reducing the number of capital crimes from 68 to 55 by commuting the “economic” crimes – mostly fraud against the State – to long prison terms. But occasionally, still, the policemen’s sub-machine guns get used.

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