In This Review

The China Dream: The Quest for the Last Great Market on Earth
The China Dream: The Quest for the Last Great Market on Earth
By Joe Studwell
Atlantic Monthly Press, 2002, 358 pp.

Taking a more pessimistic stance than Lardy's, Studwell records the follies of Westerners who deluded themselves about the possibilities of the China market. Today, many still naively expect to get rich there. Studwell, who wrote about the Chinese economy for the Economist Intelligence Unit, systematically exposes the problems with Chinese economic statistics and the resulting errors in most projections about China's prospects. His account makes it almost embarrassing to read the hype projected today by American entrepreneurs expecting to cash in on the China market.

At the same time, Studwell's book complements Lardy's. Studwell also believes that China is destined to become a world center for manufacturing now that Hong Kong, Taiwan, and Japan have moved many manufacturing operations there, drawn to China's unlimited supply of cheap labor. His key caveat, however, is that low-grade manufacturing is not the road to riches it once was -- hence China will remain a poor country. The girls who slave in the Chinese shoe factories do not make enough to create a great China market, and those people who make the profits from the shoes operate in the world economy outside of China.