China From the Bottom Up

Image by Getty Images via @daylifeOften in discussions of China’s economic progress the role of the private sector is forgotten. The economist article below quotes an official saying that more than 90% of businesses operating in China are private. Development of the entrepreneurial sector has never been more important than it is today. Innovation, creativity, and nimbleness are the strengths of small and emerging businesses. In a rapidly changing environment where the playing field and rules keep shifting, the ability to turn on a dime will be critical to survival and success.

Labor Flux

The global economy is moving, more rapidly than most of us could have imagined 10 or 20 years ago, towards a true competitive advantage model. But these falling barriers to labor flows create other dislocations. Even at first glance, it is clear that labor as an input to production has radically different characteristics than natural resources. We typically think of the issues of structural rigidity because of individuals attachment to their countries and families, as well as, language barriers. In this post EU environment, barriers to labor flows have been rapidly declining, but there have been significant social costs to these freedoms.

China Eyes Egypt

This week's Economist has an excellent article on China's response to the events in Egypt.  There is no doubt that China will have some critical choices to make in the next couple of years.  Given the changes in the country since Tiananmen Square, it is difficult to imagine that less social and political liberty will be a viable option.  The question remains whether or not the Politburo will manage to shift its priority from pure economic growth to a more balanced agenda.  There is no doubt that establishing a strong economic base is critical to having an orderly transition to social and political freedoms, but where is the tipping point? At what point will the marginal returns to economic growth no longer contain the rising impulse for freedom?

http://www.economist.com/node/18178177