China's Hot Stock: Orwell Inc.

An industry U.S. hedge fund gurus see as almost limitless: the Chinese police state.

America must disenthrall itself from one of its most cherished myths: that capitalism and democracy go hand in hand, that the spread of markets inevitably means the coming of democracy. That was a key argument that proponents of extending permanent favored trade status to China made during the 1990s. In fact, the creation of the Chinese-American economic entity that followed -- in effect, moving our manufacturing belt from the Midwest to Shenzhen -- has demonstrated the opposite. Leading American companies such as Microsoft, Google and Yahoo have acquiesced in Chinese Internet censorship. China's nonexistent standards of product safety -- the direct consequence of its absence of democracy -- became our standards, too.

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