Endogenous growth theory, for which Paul Romer won a 2018 Nobel prize in economics, implies that long-term economic prosperity depends on the spread of knowledge and technological innovation in the economy. [1]<p>If these are the primary factors, then the closest analogues to China would be other East Asian economies like Japan and South Korea. These nations greatly value education, with top-tiered performance in international tests, and invest heavily in R&D.<p>An oft-repeated criticism that authoritarianism constrains scientific and technological creativity is still unproven and will be tested in the coming decades by China. [2]<p>[1] From Wikipedia: “Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external forces.[1] Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economic growth.”<p><a href="https://www.nobelprize.org/prizes/economic-sciences/2018/press-release/" rel="nofollow">https://www.nobelprize.org/prizes/economic-sciences/2018/pre...</a>
<a href="https://en.m.wikipedia.org/wiki/Endogenous_growth_theory" rel="nofollow">https://en.m.wikipedia.org/wiki/Endogenous_growth_theory</a><p>[2] How China could dominate science. <a href="https://www.economist.com/leaders/2019/01/12/how-china-could-dominate-science" rel="nofollow">https://www.economist.com/leaders/2019/01/12/how-china-could...</a>
This is an perfect example of a news for the sake of news. The author twice points out that he could be wrong and that they can't really predict at all.<p>I guess if things do go south, he will be able to use this article to point out that he had predicted it and that he is a economic guru.
The best thing said in the article is "Many people have been predicting a China crisis for a long time, and it has kept on not happening". Since China has a planned economy with a strong grip from the government, they could keep things going for a while. No planned economy has ever gotten so big
>><i>The case for crisis seems compelling – but I said that in 2011, too.</i><p>Just a matter of time son, you will be proven right one day. Just keep repeating it.
I respect anyone who is willing to point out when they were wrong before.<p>In regard to China, I think that they (like the Soviet Union before them) were very good at playing catch-up, because command economies are very good at getting everybody on board to do the thing which everyone knows needs to be done. "Do this, or we will put you in prison or worse."<p>However, once you have (mostly) caught up, it becomes less obvious what the next thing to do is. Literal moonshot? Fiberoptic internet to every house in the nation? Particle accelerator that can hit energies never before reached? Every student gets a spot in a university?<p>Some of these might be good ideas, some might be boondoggles. It's hard to know, when you're nearing the front of the pack. The Soviet Union was great at playing catch-up until, sometime in the mid 60's, they were too close to the forefront to be able to clearly see what needed to be done next.<p>China's Communist Party is great at getting everyone to do what they have decided to do. I think it is going to be harder for them to figure out what an economy, of their size and relatively advanced state, should be doing next. If they guess wrong, it will be ugly.
Something very interesting about this comments section. For years now when HN had a link about problems with the Chinese economy, there would be number of comments from China defenders who would say no, things are fine and the government knows exactly what it is doing. I strongly suspected many of them were paid government trolls.<p>This time we are aren't getting any such comments. Instead we have gotten a number of attacks on Krugman, without saying anything specific about how his analysis is wrong.<p>I could be mistaken, but I am guessing that the troll minders see they can't make a real defense, so they are trying to just distract readers away from what Krugman had to say.
<a href="https://www.youtube.com/watch?v=cZ5dVBa3grw" rel="nofollow">https://www.youtube.com/watch?v=cZ5dVBa3grw</a>. I don't know why anyone still reads or listens to this clown.