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The American blogosphere lit up this week with discussion of a report from the International Monetary Fund that, by some measures, the Chinese economy will be bigger than the U.S. economy by 2016.

It makes a great headline, but that story was, of course, old news: Given China's size, and the speed with which it is growing, simple arithmetic tells you that its economy will one day be bigger than that of the United States. The only question is when.

The bigger surprise is the huge affection U.S. capitalists have for Communist China.

"When I go to China, I find more people in government who are interested in learning about the things that private equity can do to help an economy and help companies than you often do in Washington," David Rubenstein, co-founder and managing director of Carlyle Group, one of the world's largest private equity firms, said in an interview this week.

"Washington, for a number of reasons, is not as focused on the joys of private equity," Mr. Rubenstein explained. "So very often, you have to defend yourself when you're talking to a member of Congress."

In contrast, he said, he gets a warm reception in the People's Republic: "What they really think is that private equity firms have shown in the West that they know how to make companies more efficient, that they know how to make workers more efficient and managers more efficient and how to make companies more productive. And that's something they want."

The content of his remarks is conventional wisdom among U.S. business people today: it is a truth universally acknowledged that China - with its censorship, central plan and one-party state - is a better place to do business than the United States.

This has become such a familiar refrain that it is easy to lose sight of what a radical assertion it is. We used to think that capitalism and democracy went together; that was the premise behind much of the U.S.-led global nation-building effort of the past two decades. But it has become commonplace to hear the most successful American business people assert that the world's great power that most explicitly rejects democracy - China - is also the most business-friendly.

This embrace of Chinese Communism shouldn't be entirely surprising. The best business people are pragmatists. Deng Xiaoping famously said it didn't matter whether a cat was black or white so long as it caught mice. Smart business people are likewise pretty indifferent to a regime's ideology (and indeed its treatment of dissidents, journalists and other such niceties) as long as their deals can get done and their tax rates are lenient.

So long as you have a skill or a technology that the comrades have decided China needs, its authoritarian system can be welcoming indeed, and free of many of the delays and frustrations that getting things done in a democracy can entail.

It is easy to equate that effectiveness of execution with good government. But fans of authoritarian regimes, including well-run ones such as China, should never forget the agency problem that is their big structural flaw: For their systems to work, dictators need not only be smart; they must also act in the interests of the state, not of themselves. It doesn't always work out that way.

Legendary fund manager George Soros recently made the provocative argument that one of China's most contentious policies - its undervalued currency - is a fraught issue because it is wrapped up in the self-interest of its mandarins. He argued that the undervalued currency is "a form of transferring purchasing power - wealth - from the citizens to the government without imposing taxation." This made the central government powerful and attracted the best talents to government because it was a way to become wealthy.

The problem now, Mr. Soros said, is that the national interest would be served by allowing the currency to appreciate, but the officials whose job it is to make that call are loath to give up the personal benefits of an undervalued exchange rate.

As we prepare for a world in which China is the largest economy, we should be on the lookout for moments like this, when the interests of the state and of its mandarins don't coincide. And it might be worth remembering that democracy, for all its quarrelsome inefficiencies, has the great virtue of making the conflicts of interest between the state's servants and the state itself transparent, and making it easy to kick the bums out when those conflicts become acute.