Will China’s future economic success hinge on its willingness to democratize? Or will U.S. debt make the country a superpower sooner than we think?

Question: Will China need to adopt rnWestern-style democracyrnin order to keep its economy growing?

EdwardrnTse:  It is hard to predictrnprecisely how the evolution is going to sort of evolve, but if you look rnat thernsteps of today and look at you know how the Chinese people are looking rnat therngovernment I say you know while obviously you know just like you know rnpeople inrnany other country, many of the Chinese people will have criticism rntowards thernChinese government, but by and large you know with respect to the rndevelopment,rnin particular economic development, that you know Chinese… that China rnhas gonernthrough in the last couple of decades I would say you know the Chinese rnpeoplernhave been very supportive of the Chinese government’s policies and you rnknowrnwhat they have been able to achieve in terms of lifting the living rnstandards ofrnthe Chinese.  Over time you knowrnone will expect that as the Chinese people become wealthier and many of rnthemrnwill you know go outside of China to become more worldly you know you rnwill expectrnthat there is going to be some more feedback from the Chinese people on rnhow thernChinese government ought to be conducted and in fact, within the Chineserngovernment they also do recognize that in fact things cannot be sort ofrnstagnant or it cannot be just you know stay where it is today and there rnisrnalways a lot of discussions within the Chinese government as to how therngovernment ought to be changed over time, but unlikely we’re going to rnsee arndrastic change overnight.  We’rernprobably going to see a gradual evolution and in fact, right now within rntherncommunist party there is quite a bit discussion about a so called rninternalrndemocracy.  In other words,rncreating some competition within internally within the party on certain rnkeyrnposts of the assignments and we expect this evolution will continue to rnhappen.

Question: Will debt to China pose a rnserious problem for thernU.S.?

EdwardrnTse:  Yeah, certainly.  Anytimern you owe money to other peoplernis always […].  I think it goesrnwithout saying at the country level as well.  Fromrn the Chinese standpoint Chinese obviously see that, yournknow, as a way to invest their money. rnAt the same time China is also a bit concerned whether or not, rnyou know,rnwe’re putting too much within you know one basket, but at the same time rnyournknow are there are other sort of better alternatives one also needs to rnargue,rnso it’s a bit of a tenuous situation, but China is also sort of rnrevealing orrnmonitoring, you know, how we should be making our investments. 

Question: Will China rival the U.S. as anrn economicrnsuperpower in the 21st century?

EdwardrnTse: I think most of thernChinese will expect that, you know, China will continue to rise in the rnnextrncouple of decades overall speaking, economically and perhaps rngeopolitically.  For the Chinese, you know, we rnbelievernthat, you know, for centuries in the past we’ve been in the center of rnthernworld.  In fact, you know, China inrnChinese means the middle kingdom that we are in the middle of the world.  Rightly or wrongly that is the beliefrnand so this is a… you know, this current or recent rise of China is for rnmanyrnChinese it is just the way that we get back to where we ought to be, butrn thernrelationship between China and the U.S. will in particular U.S., need torn bernkept within a context of what I talk about in my book, which is openrnChina.  China actually is arnrelatively open society.  China hasrntremendous motives of wanting to integrate into the rest of the world rnand thernrelationship with the U.S. for example I think, you know, is a very rndifferentrntype of relationship compared to let’s say the U.S. and the Soviet Unionrnrelationship in the Cold War era or even you know when Japan was also rnrising inrnthe ‘80s the relationship in the U.S. and Japan.  Irn think today if you look at China and the U.S. a lot ofrninterests are quite intertwined. rnThere is a lot of mutual interests.  Of rncourse there are differences as well and that a reason…rnthat is to be expected, but at the same time there is a tremendous rnamount ofrnintertwined interests between the two countries, in particular, in termsrn ofrnbusinesses that in fact as China continues to rise China will have to rnlearnrnabout, you know, how to play more effectively in the global geopoliticalrn world,rnbut at the same time it’s not like China will have to sort of threaten rnor sortrnof rival itself with the U.S.  Irndon’t think that is the motive.