Economist and former MIT biz school dean Lester Thurow has been wrong about a bunch of things per my assessment. Nonetheless, he is smart and undoubtedly worth reading. And in yesterday’s New York Times Week in Review section he offered a fascinating hypothesis in “A Chinese Century? Maybe It’s the Next One.” Thurow argues clearly, without resort to economist double-speak, that Chinese productivity figures are probably wildly overstated. The point is not to dismiss China’s amazing progress, but to suggest that we not base micro- or macro-economic policy or security policy, especially in the short term, on the idea that China will eat our (American, European, Japanese) lunch economically, and thence geopolitically, in the next couple of decades. Thurow does not offer the “China will make mistakes” scenario, but instead says that even if China does not make mistakes, it’ll probably be 100 years, or even more, before they “catch up” with the likes of us Americans.
Dismissing China’s progress would be a disaster. Wildly overstating China’s “inevitable march to Global Hegemony” would also be a disaster. Thurow may be wrong, but his argument is worth absorbing in some detail.