Becoming the world’s top economic dog isn’t easy. That’s because any contender — China or anyone else — needs to answer three tough questions.

First, do they have secure property rights for individuals? Who would trust their rainy-day funds or their most innovative ideas in a country where, when the going gets tough, the state gets your stuff? China has a big current-account surplus and lots of foreign-exchange reserves. They also have a 2,000-year tradition of putting the government before the individual. Think about all the ways this went wrong for the Soviet Union.

Second, is the financial system viable in its current form? Japan had a great economic-transformation story — and an even greater debt-fueled asset-price bubble when its banks went mad in the mid-1980s. How confident are you that China, Brazil or other emerging markets aren’t headed down the same road?

Third, is debt — both public and private — on an unsustainable path? Mismanaged debt has brought Europe to its current low point, both in the form of direct public borrowing (seeGreece) and in the equally painful form of private-sector borrowing that goes bad, with nasty implications for the government’s balance sheet (ask the Irish and Spanish about this).

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