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12a: Preconditions for economic growth and China as an example

  1. The political stability, rule of law, and property rights environment of a country also influence economic growth. Countries that have not developed a system of property rights for both physical and intellectual property will have difficulty attracting capital. Similarly, economic uncertainty caused by wars, corruption, and other disruptions poses unacceptable risk to many investors, reducing potential economic growth.

I think about my trips to China. Not that the U.S. is perfect, but consider the following:

A) I don’t believe China (both as a government and collection of individual citizens) gives a **** about intellectual property rights. In some areas, it’s harder to find legit copies of media than it is to find pirated copies. Alibaba sells tons of fake stuff. They have fake Apple stores for God’s sake.

B) The Chinese government is corrupt as ****, and I do not believe they have anything close to the Rule of Law there.

Yet despite all this, money and companies are flowing into China. I’d like to hear everyone’s thoughts on whether the above holds truth, and if so, reasons why China is growing despite these problems.

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China’s growth is endogenous. It means it is growing by internal demand and developments. For example, they don’t buy tech, they copy it. More and more unattended population is participating in business markets. It is like discovering virgin markets to exploit, this attract investors.

Las almas de todos los hombres son inmortales, pero las almas de los justos son inmortales y divinas.