Emergic: Rajesh Jain's Blog

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China’s Urbanisation

June 15th, 2007 · No Comments

Knowledge@Wharton features a talk by Gordon Wu which could have useful lessons for India:

China has $1.2 trillion of foreign exchange reserves today. Back in 1978, 20% of the people lived in the communes. Everybody was equal, but equally poor. Today we are talking about some people who make a lot of money. Now, 43% of the people live in cities and within the next 20 years, I bet your bottom dollar that the number of people living in cities in China will be the greatest migration that the world has ever seen. Urbanization will probably hit a figure of 80%. This is unheard of, in my mind. I’ll give you an example: When I first went to Shenzhen to work there in 1979, there were only 80,000 people in that city. Today it has 10 million people. That is the number of people who have migrated to the city in the past 20 years.

China’s economic growth was driven by the manufacturing industry. Of course, the country also has a really stable government; the Communist Party controls the whole nation, and sometimes there are some hiccups, but by and large things are really stable. The stable political environment combined with a free economy as free as the government allows it to be has made all these successes possible.

Tags: Emerging Markets

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