Invest in What China Needs to Buy: Don Coxe

The Energy Report: You are famous for taking the long view of the political economy, Don. What does the machinery of history tell us about the likely future of the Western world as measured against the newly industrializing economies, including China, India and Brazil?

Don Coxe: For the first 17 centuries of the so-called Christian Era, China and India together generated about 40–50% of global gross domestic product (GDP), due to the sheer size of their populations. But when they did not participate in the Industrial Revolution, the relatively small number of people living in Europe and North America were able to take over 70% of global GDP. The East stagnated.

Then, in 1978, a momentous event changed the world—Deng Xiaoping was invited by the British Labor Party to visit Great Britain. Labor was facing an election against Margaret Thatcher, whom they regarded as the devil incarnate. The party wanted to show Deng how awful things were for the British working class. However, he was astounded at how well the working class lived. When he returned to China, Deng changed the slogan on the Mao posters from "to work is glorious" to "to be rich is glorious." It was the most important editorial alteration in the history of the world. Then, he put politics to work liberating the entrepreneurial spirit of the Chinese people. (more)