'You guys are as clever and as sharp at business as the Chinese'

What about China's steps to censor the Internet, blocking Google and things like that?

The Internet had made profound changes in China. They censor the Internet, but it's like trying to kill a rat, which is running all over. You can't hit it.

I've been in China before the Internet, and I've been involved in its development there, the Chinese people, 85 per cent of the Chinese people who go online go there to get news. Because their traditional sources of news are so controlled.

Internet news sites (in China) are always pushing the envelope. If they go and report something before the government decides that it can't be reported on, all you can do is scratch your head. But when they say you can't report on something you have to stop. So the envelope is being pushed, and the government's pushing back.

It's very healthy, and it's made China into a different place.

Look at what happened when they had this toxic spill in the river Songhua. Ten years ago, they'd hide that, and no one would ever find out. Now with mobile phones and the Internet, the premier had to fly there two days later.

The Internet is a leading tool of a much more freer media in China. And the government is making a rearguard effort to try and control it. But the government officials who are really switched on realise that they are slowing it down, but they can't stop it.

I understand why they would do that. You've got a entrenched system where there isn't really a system of an Opposition, even a loyal Opposition, where it's either you are with the government or you are crushed. Right from the time of the emperors.

So if you take a society like that, and you have these demonstrations, and you have a kind of a wild media, which is focusing on this disturbance in Xinjiang, this disturbance in Guangdong, they are worried about that stopping their economic progress.

I can understand what they are doing. What they need to do is stamp out corruption, and you cannot do that with the current controls that they have. They are trying to do it through morality and the Confucian Man, and the Socialist Man, which is nonsense.

The only way around to becoming a millionaire (in China) is if you are an official. You can be honest and poor, or you can compromise yourself and get some wealth.

One doesn't hear much about corrupt officials being given the death sentence these days…

Part of the problem is that if you are a party official and you are arrested for corruption, you are above the law.

I read a figure that of the tens of thousands of party people facing charges of corruption, less than five per cent actually get to court.

They have to crack down. The problem is that you have a system where everybody is a little bit compromised. Because if you are from the five or six hundred families that were a part of the Communist aristocracy, the families that were a part of the Revolution, if you don't get rich now, you are nobody.

It's a market wealthy economy. So they have this 'don't ask, don't tell' policy. You are not supposed to go steal the country's assets, but you can use your privilege and position to build business,. Build personal wealth at the same time as you build national wealth and create jobs.

You have a party that was based on wealth confiscation, wealth repudiation, and then one day you turn around and it's all about wealth creation. And they are still taking the words of Marx and Lenin and swirling them around in creative combinations to justify capitalism under the name of socialism.

China's economy is a raging capitalist economy. The world had better look out.

I don't worry about Indians, because you guys are as clever and as sharp at business as the Chinese. I worry about us Americans getting run over.

Image: A laptop computer screen in Beijing shows the homepage of Google.cn, January 26, 2006, a day after its debut in China where the online search engine launched a new service after agreeing to censor web sites and content banned by the Beijing authorities.

Google and other Western Internet companies have been accused of bowing to Chinese censors in order to gain a slice of the world's most promising market. Amnesty International says Internet firms are short-sighted in caving into China's censors, given the industry's claim that it promotes the right to freedom of information of all people, at all times, everywhere.

Photograph: Fredric J Brown/AFP/Getty Images