Why does China prevail in the toughest of all times?

Through my amateurish yet naive analysis and observation, I have wrote many articles on the changing China and the critical roles which it will play in the foreseeable future. Yet, what I haven't write is why China prevails in the toughest of all times. In this article, I will attempt to examine the various aspects of how China comes to dominate others in the global finance arena.

We first have to look at the economy turmoil and market crash of late 2008. Look at how the Western society tumbles to smithereens because of the credit crisis, and how many banks, institutions, and companies has to be rescued by the governments with a tantamount injection of cash flow so to keep the infrastructure afloat, despite how this would eventually inflate the currency to astronomical values. We are witnessing abundant examples from the most recent on the European Union's reluctance to support the nearly bankrupt government of Greece to the exemplary example of the already bankrupt Icelandic government almost a year ago. For those not lucky enough to be rescued, filing bankruptcy and ditching client responsibility was usually the next best option, except by doing so often meant leaving countless hardworking people in the dark. The victims were often laymen earning meager wages, who with a slim hope for financial success invested their lifelong savings to trusting institutions, but eventually succumb to greed and an unforgiving network of loopholes which often allowed the fund managers to exploit for their own personal gain at the cost of their clients. The consequence of above completes the vicious circle with consumers forfeit buying power fueled by their lack of earning and default on the investments which means more cash injection from the government is required to keep the various vendors afloat.

So how exactly does China do it? How can it not only merely survive but profit and proliferate in the toughest of all times when other cash tight nations are scrambling to find solution to safeguard their very own existence? In the following, I have attempted to list and categorize several aspects of the financial success of China. This list is by no means complete yet at least it gives you an insight as why is China exceedingly more financially comfortable than any other nations at this very moment.

1. Population: China has the largest population, 1.3 billion and growing to be exact, which gives it tremendous advantage over other nations. The largest population means the largest workforce, requiring the largest demand and supply to keep its economy in check, making China one of the most attractive investment destination for both foreign and domestic companies. Thus, even in the midst of this economic downturn, China is still able to thrive due to the rise of a dynamic consumer-oriented middle-class, bringing forth significant investments opportunities for anyone who is willing to invest.
   
2. Labour: With the largest population comes the largest labour force available. One which significantly brings down the production cost due to the extremely cheap labour, and with the command from high above anything humanly imaginable is possible. Especially in the current downturn, the cheapest labour cost is often the most favorable for producers when both foreign and domestic consumers are struggling to seek deals with the most bang on their cold hard cash.
   
3. Perseverance: Chinese are like the Japanese in the fiftieths right after World War 2, right after their liberation from the imperial nuisance. In that era, the Japanese were able to endure and adapt to the constant hardship and humiliation to eventually propel itself as a global economic power with innovative breakthroughs that benefit mankind. By being a net exporter, Japan's economy was also more responsive to any sudden unexpected fluctuations. Likewise, China is now able to shake off the amnesia since the Culture Revolution and reposition itself as the next major economic power almost twenty years after its economic reform. Due to its wide income gap, Chinese citizens are ever more frugal and thanks to consistent savings years ago they are better equipped to handle crisis like the downturn than any other global residents.
   
4. Renminbi: By pegging the Renminbi at a lower than expected value and together with a handful of workforce always available to produce anything, China has the advantage over other nations when it comes to flooding exports with competitively below-cost pricing. When the average consumers worldwide are looking for bargains on almost everything to adjust to the economic downturn, this is one of the foremost leverages China has when it comes to providing a better service for the millions of bargain hunters. By doing so, it also guarantees the economy of China will not falter but persevere and flourish in this downturn.
   
5. Competition: Due to an overwhelming demand from the ballooning population, sales in the domestic market often encounters significantly more competition than those in other countries. Competition in a dynamic, market-driven environment bring forth numerous benefits not only for the Chinese consumers but also possible innovations, cost savings and reforms benefiting the state, which can ultimately use it as a leverage to bargain with other foreign states.
   
6. One Party System: The one party system rules over others, squelching dissidence, suppress opposition, eradicate unrest, which is the necessary evil when it comes to the fulfillment of a harmonious and cohesive society. Especially during the downturn, when inflation starts to rise the one party system can often effectively stabilizes and fixes the market price to ensure consumer satisfaction and lessen those complaints which would otherwise surge when price is no longer affordable. A precise and efficient way to execute the party doctrine is also another virtue of the one party system which "western democracy" lacks, especially when the public consensus maybe detrimental to the overall outlook of the entire nation.
   
7. Education: Chinese tradition stresses on education from the extracurricular lessons in piano or violin when one is young, to extra night classes in high school, onto university and finally post-graduate education after twenty two or earlier. The massive nationwide university entrance exams written annually creates the greatest proportion of young talents ever imaginable that can gradually replace the core of the aging think tank in China as the twenty first century progresses. Whereas other countries may not have this luxury, scholarly contributions by Chinese authors in internationally renowned academic journals are already surging, foreshadowing the dominate role China will play in technological innovation in the near future.

As I said, the above list is by no means complete but at least these indicative factors which other "democratic countries" lack are how China will most likely to dwell in, persevere and flourish in the long run. These factors are also partly why China is able to amount to massive collection of US bonds and debts when even the US itself will be unable to shake off perhaps within this century.

That is exactly why the emerging China will be the most fearful and daunting topic in this very century!

speed_demon