There may be plenty of great investment opportunities in China, says Martin Vander Weyer, business editor of the London-based Spectator magazine. But investors should be skeptical of wildly optimistic projections and talk that the country is fast becoming a world power.

Vander Weyer counselled skepticism in a speech — posted on the Investment Dealers Association of Canada’s Web site today — made at the IDA annual conference in Banff last week. He argued that there are many negative forces within China that may be overlooked while the country is producing tremendous growth, but will ultimately derail any superpower ambitions.

A vast array of factors will keep China from emerging as a world leader, including the prevalence of state repression, the lack of freedom and democracy, the weak education system, corruption, crony capitalism, a shaky financial system, its environmental degradation, and its military and diplomatic deficiencies, he said.

“For the time being it’s a fantastically cheap manufacturing base, the most fantastically dynamic manufacturing economy on the planet. Yes it’s a huge domestic market with a phenomenal demand for consumer goods. Yes it’s a hugely important consumer of energy and commodities — so a big player in the future of those markets, and a big player in the future of your markets here in Alberta. Yes there’ll be opportunities for Western companies to make money doing business in China, so long as they get out before it all goes horribly wrong,” he said.

“But be skeptical,” he advised. “I don’t believe the growth is sustainable without wholesale reform of the financial, educational and legal structures, and the underlying ethos of the Chinese business.” Without that tremendous growth, Vander Weyer suggested, the Chinese government will not be able to maintain power. “I don’t believe a state that lies to, and brutally represses, its own people is trusted by no one anywhere, that militarily and diplomatically punches far below its weight, can, or should be a world power in the 21st century.”

“By all means let’s welcome, for all its faults, China’s spectacular entry into to the capitalist arena, but let’s not confuse a fast buck with a bid for global leadership,” he concluded.