Tuesday, September 01, 2009

Crossing the river by feeling for stones

On 8 June, 2005 I wrote,

As we all know, China has been the leading world market mover in recent past. Obviously, more than a billion people, mostly living under poverty line till recently, would have a great appetite for natural resources/commodities depending on their buying power.

Then, what has been holding these billion people from going all out for their needs?

Socialism—defined as a centrally planned economy in which the government controls all means of production. Since 1978, along with the dismantling of the planned economy system and the deepening of the reform of the economic system, commodity, capital, labor service and technology markets have appeared one after the other in China. Now China has transformed its planned economy system into an INITIAL SOCIALIST MARKET economy system. As a result the regulatory function of the market has been strengthened tremendously. Also, the Chinese leadership remains fairly conservative in their "liberalization" or "reform" efforts. They continue to follow the approach embodied in Deng Xiaoping's phrase "Mozhe shitou guo he" or "Crossing the river by feeling for stones."

While they feel for stones, markets would sweat and once they find one, say cheers!!!//

Four years along, the world shipping is witness to "Mozhe shitou guo he", and has danced to the rhythm of Chinese cha-cha-cha. It's strange that the world which always rubbished the socialist regime, is now a humble servant of the cult. If the claims of recovery from the current recessions are based on "Crossing the river by feeling for stones", I am afraid, the river is going to run out of stones. We gotta swim it across, Dr Ben.