Quote from TGM:
There are flaws in China to be sure. The largest flaw is the ratio of women to men. There is a HUGE number of men compared to women as a result of the one child policy. This will cause friction. In fact, this is the largest imbalance in known history (sorry I do not have the actual numbers handy). Of course Chinese boys prefer Chinese girls (everyone likes their own kind) and the women there will get anything they want.
We see this in other parts of Asia as well but not quite the ratio in China. Societies with such an imbalance tend to go to war historically. Who knows what will happen with this much of an extreme. To top it off if you are a Chinese parent or grandparent are you going to send your only son ---your legacy to war.....well that is another problem. Chinese one child policy may yet cause a revolution.
Another challenge is the new Chinese strategy of trying to guilt trip others when in disagreement. They learned this from the Political Class in the West. Western textbook are full of propaganda aimed at guilt tripping children into submission later on in life. I wont go into now. But I was raised around alot of far left ideas (way to left of most democrats---like marxist--ironic that trade futures for a living --eh!).
Anyway, China is now copying this strategy against Japan. Of course, it has yet to succeed. It is very flawed and will self destruct--because China cannot control Japans textbooks nor can they control the interpretation of Japanese history in Japan. This worked in the west simply because the political class hates the West ---and it was done "in house".
On the financial front, one must have a developed govt bond market to be a reserve status currency. China will develop this ----and it is currently in the process. This type of thing is not an overnight affair. They also need a debt futures market. To my knowledge, they know all this and are working on it. They think long term ---which is their strength.