McKinsey Report: Preparing for China’s Urban Billion

Thursday, March 27, 2008 1:36
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Most will agree that for China to balance itself, it must create an econmoy that is more than just an export market, that provides more opportunities in the inner provinces, that moves 400 million more people from the farm to the city, that balances the ebb and flow of raw materials and labor, and… that does all this without spinning apart.

When recently discussing this with some visiting academics, and looking at their faces when discussing all the balls that are in the air, I closed the discussion by saying that what you are watching is the NYC Philharmonic. The central government (at the time in the middle of the NPC) is the maestro, there are dozens and dozens of musicians on stage, and we are all privileged to be watching the greatest show on earth.

The recent release from Mckinsey Global Institute entitled Preparing for China’s Urban Billion takes all this and has put it into a very interesting piece of analysis that I suggest everyone read.

Having looked at 25 cities myself, the role of logistics in development, migrant labor, and a host of other issues related to the sustainability, and trajectory, of China, I think that this is one of the more interesting pieces I have seen thus far, and where I appreciate the effort is that they are not simply pumping the bubble… they are very clearly throwing out caution signs as to where the fissures exist,and the potential for trouble.

In the end, MGI is optimistic that they will be able to grow the GDP 4 times over over by 2025 through the growth of megacities and the benefits that lie in them. I myself am still skeptical, and perhaps that is because I am focusing more and more on the raw material, energy, etc side of the economy, and the fact that at this point there are already real shortages in many of the goods necessary to grow another 400%.

like, water… oil… and energy.

anyone want to guess where the materials will come from? what level of efficiency must be achieved to grow this fast without the ability to aquire materials at the same rate? or when innovation will come into play?

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