Time and time again I have heard that a good economy requires natural resources, or agriculture, or manufacturing, yada, yada, yada. If so, then how do we explain this?
Bashing China's currency policies is no doubt good sport in America. And it may help Bush pick up some crucial votes. But the U.S. might take a lesson from Hong Kong, which didn't complain or whine about the extraordinary manufacturing productivity gains that its giant neighbor racked up over the past quarter-century. The entire manufacturing base in Hong Kong was eviscerated, when factory jobs moved across the border.
In fact, Hong Kong now has the most service-oriented economy in the world, with that sector now accounting for 85% of GDP. Yet Hong Kong-based companies employ a staggering 12 million people in the neighboring Pearl River Delta region. That's twice the population of Hong Kong itself. The lesson: You don't necessarily need manufacturing jobs to make a successful economy.
I don't know much about Hong Kong's economy, except that it is consistently at the top of the list of the Index of Economic Freedom. But it seems to be successful doing the very things pundits here in the U.S. say we can't let happen here.