| First of three parts |
China’s wealth is nothing if it cannot feed its more than one billion population.
The Beijing leadership is desperate to provide jobs to its people, that it is not far-fetched it is building building building just for the sake of creating jobs. For one, it has developed mega housing projects that have no takers, therefore one may see a mega-housing village that houses no one.
The property market in China may be experiencing a crunch even before the pandemic, that major real estate developers like China Evergrande Group with $337 billion in assets are actually currently experiencing a major crisis, and 36% or 50 of the 334 major developers in China may also be experiencing similar troubles and likely to have a hard time borrowing from state-owned and private banks, based on the data collated by Gavekal Dragonomics, a financial services company based in Hong Kong.
But, China is not solely banking on real estate to provide jobs to its citizens. Aside from being a major source of goods and raw materials, she is a source of cheap labor, that has successfully lured giant tech companies from western countries to outsource the mass production of their brands in the former empire. Aside from employment opportunities, Chinese people also inevitably enjoyed the transfer of knowledge and technology from these western companies.
With the new-found knowledge and technology, they were able to come up initially with fake tech products, until such time they were already flooding the global market with their own original brands that are equally good, and at times, even better.
The Chinese tech boom is not enough however to relax her able-bodied populace. Although it has created the most number of newest Chinese multi-billionaires, her real wealth is the more than one billion population. The titanic labor and production machine should be utilized else it may simply deteriorate into chaos as Peter Cai of the Lowy Institute for International Policy believes that the BRI is largely driven by China’s “pressing domestic economic concerns.”
Meanwhile, with China’s excess productions, she is geared to have these products flood the world, especially considering her strained relationship with the United States, she has to come up with a device to continue this flow at a sustainable pace and even parry disruptions. She has to tap and even create new markets for her excess goods and services by reaching out to other countries, considering also the need, at the same time, to hurdle the anticipated trade gaps governments may hurl over onto her. She has to overcome their protectionist policies if she has to enjoy free-flow and steady entries of her labor and supplies.
Featured image: Belt and Road Initiative map /Global Infrastructure Connectivity Alliance