Thomas Friedman to America: China is Kicking Our Butt

Posted on September 28, 2010 by Adam Mayer

Tianjin. Photo by Sarmu

New York Times foreign affairs columnist Thomas Friedman was in Tianjin earlier this month for the 2010 Summer Davos World Economic Forum. His trip yielded a pair of opinion pieces blasting America for its lagging economic progress in comparison to rising China.

The title of Friedman’s first piece, Too Many Hamburgers?, references a skit produced for the Davos Forum where four children wearing four different flags – Chinese, American, Indian and Brazilian- are about to run a race. The child with the American flag bolts ahead only to lose ground shortly after due to a bout of cramps. The others wonder what is wrong with him until one of them says, “he ate too many hamburgers.” Continue reading →

China, America, Paul Krugman

Posted on September 19, 2010 by Adam Mayer

Every few months, Nobel Prize winning economist and New York Times columnist Paul Krugman writes an opinion piece lambasting China for ‘manipulating’ its currency, the renminbi (RMB). Whenever he brings this particular issue up, Krugman argues that China is undermining America’s (and other countries) manufacturing competitiveness.

I have responded to Krugman’s previous commentaries about the Chinese currency issue before (U.S. – China Trade Complications) and discussed why letting the RMB float will not bring manufacturing jobs back to the U.S. Krugman doesn’t seem to be getting the message based on yet another Op-Ed he penned titled China, Japan, America. Continue reading →

China Housing Bubble? Maybe, But Not as Bad as You Think

Posted on September 4, 2010 by Adam Mayer

Many economic analysts are convinced that China is now in the midst of a colossal housing bubble. Wendell Cox thinks otherwise. In a recent NewGeography piece titled China’s Sliver of a Housing Bubble, Cox digs through the various studies surrounding the talk of a housing bubble and focuses in on one particular study conducted by Dr. Wang Xialou for Credit Suisse.

Dr. Wang’s study differs from the others in that it takes into account the ‘grey income’ that is prevalent in China. Grey income is income not reported in official data. Anyone familiar with the earning and spending habits in China knows that under-the-table dealings are standard practice. This makes it difficult to assess real income versus housing prices and decisively conclude whether there really is a housing bubble. Continue reading →

The World’s Number 2 Economy…and Still a Long Way to Go

Posted on August 23, 2010 by Adam Mayer

It’s fitting that the inaugural post for the China Urban Development Blog takes place just a week after it was announced that China passed Japan to become the world’s second-largest economy. What China has been able to do in such a relatively short time period is a testament to the organizational structure of the top-down political regime. Even during a global recession, China steadily kept its factories humming and cities under construction.

Events like the 2008 Beijing Olympic Games and this year’s World Exposition in Shanghai showed the world that China is serious about joining the global community. The country is wide open to foreign enterprises and investment, and expatriates from all over now live within its borders.

Yet behind the bombastic coming out parties and stunning economic growth are the ambitions of 1.3 billion Chinese citizens. Since China first implemented ‘reform and opening’ in the late 1970’s, hundreds of thousands of Chinese migrant workers have made the move from countryside village into urban areas to work in factories and help build cities.

China’s rapid urbanization would not be possible without its unique combination of command and control economy and large pool of workers looking to improve their life. Urbanization has achieved the dual goal of rising China’s overall GDP as well as improving the standard of living for millions of its people.

Despite these accomplishments, the country has a long way to go. Per capita income sits at about $3,600 USD – very low by developed world standards. Furthermore, problems still abound in many parts of China particularly the interior areas. Ethnic tensions run high in the western autonomous regions of Tibet and Xinjiang. Poor rural areas are prone to natural disasters. Just two weeks ago, Zhoqu County in Gansu Province experienced a devastating landslide, killing over 1,000 people.

China has already shown the world that it can get things done. The next step will be it to continue the momentum by developing the interior urban areas and further improving the life of its people. Leading the way towards this goal are China’s cities – where opportunities abound for those seeking a better life.