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John Findley Blog

John Findley is a China specialist having lived, off and on, in China for around 30 years. He now lives in Newcastle. He is a highly experienced senior executive and now runs his own migration business (a genuine independent contractor) supporting high-end executives to work in Australia.

China Cannot Stop; China Will Not Stop

Monday, August 20, 2012

I do not have extensive research resource, nor am I properly trained to make economic forecasts.  I just have 25 years living and working in many cities of China, a keen eye and an engineer’s training.    I frequently read erudite and well researched publications discussing a slowdown in China.

These discussions seem to miss a vital point about China, a point that I have perceived and upon which I have commented for many years.  This is the huge disparity of wealth in China.  The coastal cities, with which most commentators seem to be familiar, are comparatively wealthy.  But one does not need to venture too from the bright lights to find crushing poverty.

In fact, if one were to walk a few blocks off the main streets of Shanghai, one would see such an unimaginable disparity of wealth.  It takes just a few hundred yards walking.  This is not the sort of adventure tour that the erudite commentators take, not from laziness, but from the lack of time they would have in their busy schedules.

The disparity in wealth is borne by the poor of China, but they know full well the prosperity of the coastal cities. 

The coastal cities may have a population 200 million, many of whom are moving into a propertied middle class.  But inland China has a population of 1.2 billion.  And they are mostly dirt poor farmers.

The poor of China do not have our Australian “lop down tall poppies” syndrome, the poor all aspire to affluence for themselves and their families.

The poor all have access to TV, and even the state censored coverage shows the poor the shortcoming of their surroundings. They want the good things they see; refrigerators, cars, better education, better hospitals and the all round better, more comfortable lifestyle they see.

The government of China must meet the aspirations of the poorer parts of China or face civil unrest.

The leadership of China seems to have different outlook to the leaders who came from “Revolutionary China”.  They seem to understand the need to satisfy the aspirations of the people.

Whilst I am not privy to the discussions amongst the elite of China, I am privileged to discuss matters with Party Members who try to set their sails to the winds from Beijing.

They see the limitations of a command economy and the benefits of a system of enterprise where entrepreneurs can develop.

They see the absolute need to provide housing, schools, roads and bridges, high speed rail and its attendant civil engineering works. All of these require steel and concrete and these commodities both require coal. 

China has plenty of coal for thermal power generation and cement manufacture, but China’s huge steel making blast furnaces require the type of hard coking coal with which Australia is blessed and of which China is under resourced.

The use of basic commodities will continue in China for decades to come.  China will not stop, China cannot stop.

Australia’s geographic position will allow this country to participate in the growth of China whilst our infrastructure keeps pace and the costs of developing the infrastructure remains internationally competitive.

Our national government must seize the initiative now, before it is too late and provide the environment in which our entrepreneurs can thrive, and in which our major infrastructure developments are not made at inflated prices, caused by institutionalised wage fixing and restrictive work place and trades practices.

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