Israel Mesfin, Contributor Ω
China’s relatively-meteoric rise as a global economic leader in just ten years is without precedent. It took Europe decades to regroup after the Second World War under the Marshal Plan — the economic recovery plan wherein the U.S. economically supported European nations in an attempt to stave off Communist influence. So how did this centrally-planned Asian economy, that our parents and grandparents were taught was not going to last, become an economic titan in the 21st century?
China’s economic policies and markets are authoritarian and centrally planned. However, China has poached the best (and some would say the worst) aspects of unbridled capitalism that was seen in the West from the 19th century into the early parts of the 20th century. Securing key natural resources in Africa, having access to a large pool of the cheapest labour in the world and a borderline unlimited amount of credit created today’s China.
The boom of China’s economy can best be summarized by a line in the classic 1989 Kevin Costner film Field of Dreams: “If you build it, [they] will come.” With all the natural resources and cheap labour at the beck and call of the government, they decided to (metaphorically) build Rome in a day.
In one instance, they built Paris in China. The town is called Tianducheng, and it was designed to very nearly resemble Paris, France.
According to Wyng Mio, a TRU student from China, there are four or five cities like Tianducheng that are ghost towns. That might not seem like many, but you have to put it into context. Those four or five cities were designed to house 160 million people. The main reason for these barren cites is not because they are unappealing, it is due to the rapid housing speculation that has inflated the housing markets.
According to economist Victor Shih, the same speculation and complex derivative trading that took down the American economy in 2008 will happen in China on a grander scale because of the massive amounts of over-leveraging the Chinese banks are engaged in.
No country has seen a “gentle” market crash, and that scares TRU students like Chen Gseshen and Mio. Both students are worried about finding jobs after university. They believe that China has a lot of potential, but would like to see more of an emphasis put on innovation instead of infrastructure-based projects.
The two have great affection for their native land but would like to see a more western-style economic model to create more stability for their future back home.