Yglesias posted a really great reassessment of economist Simon Kuznet’s apocryphal statement about the four types of world economies.

Money quote:

China is so large and was formerly so poor that its advance from poverty-stricken to low-middle-income has really fueled the worldwide growth picture. At the same time, its per capita GDP is still only half of Argentina’s and whatever you might say about Argentine political dysfunction and lack of strong property rights it’s not a dictatorship run by the Communist Party with little pictures of Mao Zedong on its money. It’s actually extremely understandable that people would like to avoid the kind of “exproportion risk” involved in keeping all your eggs in that particular basket. Yet at the same time if you could somehow ignore these risks, China seems like the place where the good investment opportunities are. The combination of the two can tie the worldwide flow of capital into knots.