An employee checks steel products at a factory in Wuhan, whose industrial base is concentrated in steel and autos, both suffering overcapacity. Photo: Reuters
Source:
https://scmp.com/comment/insight-opinion/article/1897065/how-economic-dynamism-yangtze-river-delta-flowing-inland Comment
How the economic dynamism of the Yangtze River Delta is flowing inland
Winston Mok says the vast region has reclaimed its role as a mega player on the world stage, and can lead China to become a world-class economy
In this Friday Jan. 18, 2013 photo, cement tankers park on a construction site near a statue of former Communist leader Mao Zedong in southwestern China's Chongqing city. China's economy is finally rebounding from its deepest slump since the 2008 global crisis but the shaky recovery could be vulnerable to a new downturn in global trade. (AP Photo) CHINA OUT
While less in the limelight than the new Silk Road or Greater Beijing, the Yangtze economic belt is perhaps China’s most important economic engine. The region is a vast, encompassing more than 40 per cent of China’s economy.
The belt is anchored by the Yangtze River Delta whose economy is larger than those of Pearl River Delta and Greater Beijing combined. For most of the past millennium until the Industrial Revolution, the Yangtze River Delta was the world’s leading economic region, and it has reclaimed its role as a key mega region on the world stage.
How can these upstream regions benefit from the delta’s dynamism? The delta’s growth has been driven by Jiangsu and Zhejiang provinces. Zhejiang has climbed from 12th to the fourth-largest provincial economy since 1978, mainly through indigenous growth. And it has given birth to around a third of China’s top 500 private enterprises. The secret is capitalism from below – the dynamic private enterprises scattered in the smaller cities and towns in the region. It is the government supporting the market and not supplanting it.
An employee works on a production line in Ningbo, Zhejiang province. Zhejiang has climbed from 12th to the fourth-largest provincial economy since 1978, mainly through indigenous growth. Photo: Reuters
Sharpening the edge is as important as pulling up the rest. Thus, upgrading the competitiveness of the Yangtze River Delta should remain a top priority. More than among nation states, the key competition this century is among economic regions. The Yangtze River Delta will compete with the Boston-Washington corridor and the Tokyo-Kansai belt as the top mega regions of the world.
To play in the global league, the delta’s top enterprises must narrow technology and management gaps with foreign counterparts. A dynamic delta – hopefully pulling the much larger economic belt along – can lead China to become a world-class economy.
Winston Mok is a private investor, a former private equity investor and McKinsey consultant. An MIT alumnus, he studied under three Nobel laureates in economics