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Training world class athletes takes a lot of money. Either the country has to be rich and has a market big enough to support the athletes, or the country needs a state-sponsored sports program. Before criticizing China's sports system, try to remember that China, even today, is a relatively poor country. It is only in the past decade that the market has grown rich and big enough to support some athletes, and only for certain more popular sports. Also, remember that even today, the great majority of China's children don't make it to university, and more than half don't even make it to high school. Getting into the sports program is quite often a decent path for these kids. The alternative may very well be becoming a migrant factory worker working 12 hours a day at repetitive tasks. In the big cities, you always have a choice. I have a friend who was trained for ping pong through her elementary school years, but her parents decided not to have her continue after that. No problem. China also seems to be moving towards the private sector marketing and sponsorship driven model, as can be seen with Li Na the tennis player, and also all the privately owned basketball and football (soccer) teams, but this takes time. It is also not true that all the countries with a national sports program are authoritarian or ex-socialist countries. For instance, check out the highly successful Australian Institute of Sports which was started after Australia failed to win a single gold medal in the 1976 Olympics.
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