Implications of a Realistic View of China's Poverty

China's political stability may be more fragile than thought. The country faces huge domestic challenges -- an aging population lacking any form of social security, wholesale problems in the financial system that dwarf those revealed in the U.S. sub-prime loan mess and the breakdown of its health system. These problems are as big as ever, but China has fewer resources to meet them than we thought.

And there is the environment. With poor air quality, acute water shortages, massive pollution in major watersheds and many other environmental problems, China needs to make enormous investments in the environment to avoid major disasters. Globally, it will be much harder to get China -- and India -- to make any sacrifices to address problems such as global warming.

For Americans, the new numbers from the World Bank bring good news and bad. On the plus side, U.S. leadership in the global system seems more secure and more likely to endure through the next generation. On the other hand, the world we are called on to lead is poorer and more troubled than we anticipated.

China is Smaller Than We Thought

The most important story to come out of Washington recently had nothing to do with the endless presidential campaign. And although the media largely ignored it, the story changes the world.

The story's unlikely source was the staid World Bank, which published updated statistics on the economic output of 146 countries. China's economy, said the bank, is smaller than it thought.

About 40% smaller.

China, it turns out, isn't a $10-trillion economy on the brink of catching up with the United States. It is a $6-trillion economy, less than half our size. For the foreseeable future, China will have far less money to spend on its military and will face much deeper social and economic problems at home than experts previously believed.

Education is Big Business in China

Here is an amazing success story (so far).

And there is room for many more schools like the SIAS International University in Henan, China.

Nine years ago, Chen launched SIAS International University with less than $2 million, 250 students and a healthy dose of gumption. Today, the school has more than 16,000 students and nearly 50 buildings -- including a Roman amphitheater, French and Italian restaurants and an administration hall with a domed Capitol-like facade on one side and a Forbidden City tableau on the other. A swimming stadium, with an Olympic-size pool, is rising amid lotus and wheat fields.

The school's faculty of about 700 includes 119 foreign instructors, mainly from the U.S. They teach English, history and literature and help students with debate club, cheerleading and marching band -- things unheard of in this country.

"When I left, China was rationing," he said. "Now, it has an abundance of tall buildings and everything. But it doesn't matter how much China grows, it is still lacking in education."