Eventually we will see the emergence of a Chinese George Orwell

Martin Sorrell, CEO of WPP, was interviewed on Sky News this morning about the economy.  WPP was one of the original "predatory" companies of the 1980s, using leveraged money in a hostile takeover of J Walter Thompson.  So Mr Sorrell's credentials as a respectable commentator are somewhat flawed - he represents part of the problem, not the solution.

Anyway, this morning he was complaining about the amount of "China bashing" in Europe, telling us (in that obnoxious I-know-everything way of his) that our only hope was growth in China (with India and Brazil mentioned as an aside).

Was he referring to the short term or the longer term?

In the short term the BRIC economies will continue to grow and globalisation-predators such as Martin Sorrell will no doubt make a personal killing.

Over the longer term the West would be unwise to become economically dependant on countries such as China until they have reformed their political systems. 

Each of the BRIC countries contains serious contradictions that must inevitably lead to social revolution (in which case stable economic growth and overseas investment will evaporate).

To take China as an example, this economy now contains millions of newly-enriched middle classes with relatively large disposable incomes (compared to the majority of the Chinese population who are still living in poverty).

Martin Sorrell is presumably hoping that this money is going to be spent on consumer goods (cars, refrigerators, televisions etc), the purchasing decisions of the Chinese consumers fuelled by advertising presumably provided by advertising agency subsidiaries owned by Mr Sorrell and using media channels owned by Mr Murdoch.

However we know that one of the first priorities of family expenditure is on education, with the aspiration of university education for their children.

How is it possible for millions of university-educated students to be co-opted into the totalitarian system that runs China?  A genuine university education will teach them to look at the world critically which will include looking critically at their own system of government.  Eventually, and soon one would expect, they must bring the system down, in which case economic growth is going to be a casualty (as it always is in times of social revolution).

It might be possible for the Chinese to develop a non-critical university system, but docile compliant graduates are not going to deliver economic innovation necessary for growth.

It might be possible for some of the graduates to be incorporated over the short term into the ruling elite, but even among these there will be rebels and eventually we will see the emergence of a Chinese George Orwell, challenging the system from within - perhaps thousands of Chinese Orwells.

Therefore China must either transform itself into a democracy or cease to grow as an economic power.  But it cannot transform itself into a democracy without a huge number of "losers" among the current ruling elite who are going to fight their impoverishment.  That is why we cannot say that China is a safe place for long-term investment.