Will China Success Crush Their Economic Revolution?

Is China going to fail under the weight of its own success? I'm an ardent supporter of embracing Chinese economic revolution. I challenge clients without an Indian or Chinese outsourcing strategy. Intellectually, I truly believe in the economics of comparative advantage and that open trade raises overall standards of living--for both trading partners. (It doesn't necessarily raise the standard of living for each person, of course, but that's another topic.)

Lately, however, Chinese domination of the world economy is starting to smell a little like the Japanese domination of world economy forecast in the 80s and 90s. Sure, all the ducks are in a row for continuing wild growth: number of workers, number of super-skilled innovators, business-friendly economic policies (nearly free s/w and technical infrastructure anyone?), and lots more. Just pick up China, Inc. (audio, print) for a fascinating walk through the Chinese domination park. But there are those nagging issues: not enough food, environmental travesties, tainted export products, urban poor with barely enough to live...and rural poor with less.

It's a race: can China succeed so greatly that it can buy its way out of the crises? Or will the crises sink the country before success is sufficient?

You have to question some of the tainted pet food, human food, toothpaste, etc. stories as exaggerated by those with an agenda. But the issue is real. And in this case, international business is like local business: you can't be my favored vendor if I can't trust your products. Yes, you'll still get some of my business by being cheap (Doesn't everyone have some Wal-mart stuff around somewhere?), but you can't rise to the level of market domination without the trust of your customers. And if you repress and poison your staff, there's going to be some consequences. It's a race.