China Trade and Urbanization

Any visitor to China over the last decade was astonished by the cranes in the city, presiding over construction over the vast and densely packed new cities.  Here are some numbers quantifying this phenomenon.

China is undergoing rapid urbanization, with its rate increasing from 17 percent 30 years ago to 45 percent at the end of year, Xu said. More than 600 million of China's 1.3 billion people already live in cities.
"This is an incredible speed and I am quite proud that we didn't see a huge increase of slums in the cities during the process," Xu said.

So urbanization follows growth.  A policy maker wants to makes things easier for this process to continue, and is rightfully proud China did not build slums in the process of urbanization.

But now comes another policy advisor, arguing that China should not only provide for urbanization, but cause it. China has had a painful recent history in sending people down to the country, on the pretext of economic and social benefit.  Here a latter day social engineer advocates

"It will have to be a strategic move, a long-range process Its overarching theme has to be 'building new cities' across China."
Without such a strategy, investments in public infrastructure are likely to cause confusion and even delay economic recovery, he said. Urban development is probably the only way to shift the economy's dependence from export to domestic consumption.
Wang said that if the government could help about 450 million rural residents settle in urban areas in the next decade, it would generate an investment of 225 trillion yuan.

Hang on, as others have pointed out, cities follow growth, growth does not follow cities. And what kind of economy manifest growth?  Is the city the highest good?  It might generate an investment of 225 trillion yuan, but at what cost?

Freedom got what good the Chinese have gotten the last 30 years.  To switch back to forced emigration, in any direction, will hardly makes things better.  It's one thing to notice a trend and support it, it is another thing to think the State can start something good and make it go the way it wants.

There is an interesting tension in China.  The Party has the power to make change, and it is laudably focussing on corruption.  Admirable!  There are many who want to use the power to force changes which the exercise thereof is likely to lead to more corruption.  It is probably enough to wipe out corruption and leave the people alone to continue their good work.

The USA could use a better balance of small vs large farms.  Here again, it would be enough to stamp out corruption in USA.  And let natural balances set.

One of the most revolutionary acts today would be to start a business or farm.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post