Power of Capital

Chapter 1What Is an Emerging Market?: China: The Opportunities and Risks Within the World's Second‐Largest Economy

When I was 14, I traveled with my father to Shanghai. The last leg of our 36‐hour journey was a midnight rickshaw ride. Pedaling us was a thin, barefoot teenager who spoke to us in Mandarin, which neither of us could understand.

Wiry and hard‐faced with legs covered in dust, the pedaler looked only slightly older than me, and I wondered how he would get enough sleep before school the next day. Then it struck me: He didn't go to school. This was his life, realms away from mine. School was irrelevant to him.

A decade later, the gold‐foil seal on my Wharton MBA degree was still fresh as I landed once again in Shanghai. Only this time I wasn't pulled around by a rickshaw on a dirt road. From the city's massive Pudong International Airport, I climbed into the brand‐new magnetic levitation train, like a child on a theme‐park ride. My stomach dropped as the train lifted off the tracks and began to float on air. The ride was silent and smooth with occasional wind hisses and ground roars as we glided through air at a blistering speed. When the train slid to a stop, I exited. I figured I'd find my way to my hotel from there.

I found myself amid a sea of restaurants, fruit stands, clothing stores, and two‐yuan shops (25‐cent shops). The words of the original adventure capitalist, Jim Rogers, echoed in my ears: “The Chinese are the best capitalists.” Though I had perceived ...