Then, markets will decide what to invest in, by following the whims of individual consumers. In other words, China's public sector banks, enterprises and institutions need to be privatized. Then the new owners will make investment decisions based on market demand and the pursuit of profits.

Privatization of this kind, however, is something China rejects. Actually the difference between investment and consumption is not so clear-cut as many would have us believe. When the state spends money to build subsidized public-sector housing, is that consumption? Does it assist consumption?

At the recent World Economic Forum, Soros claimed China was the main danger to the world, yet adding "but not to itself." China, he argued, had a way of "inflicting" pain on the world by exporting deflation to other countries. However, this claim is false. Rather, it is capitalism that is to blame as a system where investors chase the highest profits, and so investment declines with falling profit rates.

Western demand has not grown as rapidly as China's productive capacity, which has nearly doubled since 2008.

Therefore, China's colossal investment projects focus on the infrastructure required for urbanization and modernization. As construction costs are low, modern cities have sprouted-up everywhere and tens of millions of peasants have been relocated.

However, its economic, physical, technical, social and cultural infrastructure still does not match that of Europe, the United States, or other developed capitalist societies. To raise the living standards of China's people to this level, requires decades of work.

So how can the average Chinese consumer possibly replace investment as the driving force of development? Apparently, however, the average Chinese does not represent the nation in Western eyes - only the rich minority.

A significant number of these got their money by illegal means. And, with the on-going campaign against corruption, some are running away. They buy property all around the world in cash, and spirit money out of China in a million ways. Emigration is also a long-term money laundering strategy. When it returns to China the money will be legal.

Luckily, publicly-owned enterprises and banks still dominate China's economy. And it is this fact that enables China to plan its societal priorities and channel its investment patterns accordingly. The country's bold and dramatic plans will continue to outshine those devised by countries dominated by the laws of the market, so Mr. Soros should keep quiet.

Heiko Khoo is a columnist with China.org.cn. For more information please visit:

http://www.shenbo75.com/opinion/heikokhoo.htm

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.