A traffic jam near Beijing has entered its 11th day and extends well over 60 miles along a highway which has become a key route for the transportation of Mongolian coal to Chinese power plants.
The traffic was made much worse by construction near Beijing – construction which is not anticipated to be finished for another three weeks.
Although we might find the story a bit amusing, this sort of inability to transport goods (or people) has the potential, indeed the probability, to be a serious long-term problem for China…and a huge problem for China can easily turn into a problem for the world through the power of global commodities and financial markets. Until China builds adequate alternate transportation modes, such as rail, to bring products and/or people where they need to go, its economic growth will be hampered. Building those systems will take several years at a bare minimum. The major risk is not so much economic growth dropping from 12% to 10% but rather the potential civil unrest which can occur if economic growth drops far enough (to a level that the US would still love to have) that large numbers of city dwellers can’t find jobs and large numbers of rural farmers lose hope of moving somewhere with better economic opportunity. I doubt there is anything the Chinese government is more concerned about than that very possibility.
One thing you can say about that particular Communist country: its people (and government) understand the power of market forces. Almost all news stories about the traffic jam, such as this one, include a sentence like this: “Opportunistic merchants have sprung up from the local towns – pedaling down the highway on bicycles and offering stranded travelers food, water, cigarettes and other essentials at an extremely inflated cost.”
It’s that kind of story which shows why China is more likely to continue on a successful path than is a country like India whose people have for so long been buried in the License Raj, imposed by socialist Prime Minister Nehru, that some real part of the capitalist and entrepreneurial spirit has, at least temporarily, been squeezed out of them. It’s getting better, particularly with competition between India’s states allowing the growth of a high-tech hub city like Bangalore, but it’s going to take some time for India’s potential to be recognized. One big positive for India is that so many of their people speak English and therefore can learn from American and British teachers, either in India or overseas. With those two countries running neck and neck for the title of world’s most populous country, the next 25 to 50 years will give us a lot of interesting developments to watch. There are a lot of risks and a lot of potential reward for the world as these nations try – or don’t try – to harness the natural human spirit of capitalism to drag the better part of a billion people out of poverty.
I for one do not think of the growth of these countries as a negative. Yes, they, especially China, are and will grow more to be competitors. But I don’t see China as the likely true enemy that the Soviet Union was. Furthermore, Americans being unhappy about the growth of a competitor isn’t going to make any difference except possibly to make relations between the countries unnecessarily more difficult. Americans must get away from idiotic protectionist instincts and recognize that free trade is a net benefit for the planet, even if there are some individual losers who have to find a new line of work. An increased quality of life for our children, something becoming increasingly difficult to imagine under our current Marxist/fascist government, is utterly dependent on not making the single biggest economic mistake possible: restricting free trade. Just ask Mssrs. Smoot and Hawley how it worked out for them.
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