- 29 May 2012 15:52
#13972215
http://www.cnbc.com/id/47593743
The jist of the article (and others I have read in relation to this one):
As growth on the coastal regions shifts towards the consumption based model, and inevitably slows, china has been directing (since 2005) focus of FDI and government spending to the western undeveloped regions where labour force is still cheap. It is intending to repeat the coastal experience, by turning the western region into an export oriented manufacturing powerhouse-with some tweaks to account for slowing global demand, former lessons learned, and greater oversight to avoid overcapacities in various sectors. This essentially means another 20 year period of relatively high export oriented growth for the poorer inner regions of China, even as the much more developed pacific coast completes it's shift to consumption in that period.
As a result cities like Xi'an are experiencing a boom. But unlike in the past east coast experience it is not heavy industries but high tech that is taking precedence, approval for a samsung $7 billion chip manufacturing facility in Xi'an is one such example.
Simultaneously, on the east coast, china is addressing slowing growth by simply loosening the reigns and speeding up the approval process for new projects. The list jumped from ~300 to 800~ major projects approved in one year and looks set to grow. The planners argue that even if this leads to additional overcapacities and inbalances ont eh east coast, it is better to maintain growth (i.e growth in incomes and living standards) with wastage on the side than to see it slow with less wastage on the side. Nonetheless to avoid industrial and infrastructure redundancies, almost 80% of the new projects approved are in the booming renewables sector.
Resource investment in the Americas is also on the up, with oil needs projected to soar by 50% in the next 8 years, China is building new pipelines in Bolivia and other schemes are seeing ample activity elsewhere in the Americas (including the US). Those new industrial regions int he west (although the focus is on more efficient and less energy intensive sectors) will need that juice.
Just a snapshot of what the economic planners are up to as of 2012.
The jist of the article (and others I have read in relation to this one):
As growth on the coastal regions shifts towards the consumption based model, and inevitably slows, china has been directing (since 2005) focus of FDI and government spending to the western undeveloped regions where labour force is still cheap. It is intending to repeat the coastal experience, by turning the western region into an export oriented manufacturing powerhouse-with some tweaks to account for slowing global demand, former lessons learned, and greater oversight to avoid overcapacities in various sectors. This essentially means another 20 year period of relatively high export oriented growth for the poorer inner regions of China, even as the much more developed pacific coast completes it's shift to consumption in that period.
As a result cities like Xi'an are experiencing a boom. But unlike in the past east coast experience it is not heavy industries but high tech that is taking precedence, approval for a samsung $7 billion chip manufacturing facility in Xi'an is one such example.
Simultaneously, on the east coast, china is addressing slowing growth by simply loosening the reigns and speeding up the approval process for new projects. The list jumped from ~300 to 800~ major projects approved in one year and looks set to grow. The planners argue that even if this leads to additional overcapacities and inbalances ont eh east coast, it is better to maintain growth (i.e growth in incomes and living standards) with wastage on the side than to see it slow with less wastage on the side. Nonetheless to avoid industrial and infrastructure redundancies, almost 80% of the new projects approved are in the booming renewables sector.
Resource investment in the Americas is also on the up, with oil needs projected to soar by 50% in the next 8 years, China is building new pipelines in Bolivia and other schemes are seeing ample activity elsewhere in the Americas (including the US). Those new industrial regions int he west (although the focus is on more efficient and less energy intensive sectors) will need that juice.
Just a snapshot of what the economic planners are up to as of 2012.
- By SpecialOlympian
- By Wellsy