Passage 2
If there is a road to China’s future, Highway 204 out of Shanghai is it. Along its two dusty lanes, local tracks and buses jockey with Cadillacs driven by financiers from Taiwan and Hong Kong investors. Migrant workers crowd the narrow shoulders. Factories line the highway, producing sneakers, toys, plastics, clothes, aircraft components and medical equipment. Eventually industry gives way to ricefields, which is being dug up to build still more factories. Cranes turn overhead as dump trucks and cement mixers nose onto the road. Outside the town of Jiading, one tractor-trailer leaves Asia’s largest container plant every three minutes, carrying goods bound for the Shanghai docks. The traffic on Highway 204 is so thick that the trip from Shanghai to Zhangjiagang—only 115 kilometers away—takes five hours.
Zhangjiagang is a commercial hub of Jiangsu, the fastest-growing province in China. China has the most dynamic economy in the world today. Its boom radiates from Guangdong, its richest province, but it has spread as far west as Xinjiang, where foreign investors are searching for oil and other natural resources. It is creeping inland, from Jiangsu to the cities of Chongqing and Wuhan, where businessmen from Hong Kong and Taiwan are starting to spend billions of dollars to build factories. And it has penetrated the northeast, where the city of Shenyang, long a moribund center of state industry, is bustling with new private business, from trading companies to prostitution. Back in Beijing, officials at China’s state council, or cabinet, are giddy with excitement—and exhaustion. “We don’t have people, we don’t have time,” says one. “Things are moving too fast.”
Former World Bank chief economist Larry Summers recently argued that China could surpass both Japan and the United States to become the world’s largest economy by 2020.
A farfetched prediction? U.S. Deputy Treasury Secretary Roger Altman said China may replace Japan in importance to the U.S. as an economic partner. Japan recognizes the rise of China. As a warning shot in an intensifying rivalry, Tokyo last week put punitive import tariffs on Chinese steel.
Expansion has transformed places like Jiangsu Province, where GDP grew 26 percent last year. Six years ago Zhangjiagang was part of another town and did not even have its own name. Now it’s China’s seventh largest port and a tumultuous construction zone of half-built office buildings and hotels.
For China’s newly-rising enterprises, profits are up throughout the region—thanks largely to low wages. Last year the BeiBei Company in Zhangjiagang cleared $14 million on exports of 10 million pairs of shoes to U.S. department stores. At the BeiBei plant, women huddle over a conveyor belt in frigid temperatures, gluing rubber sneakers together. Typically, Chinese workers in a plant like this make about 34 cents an hour, compared with $3.50 for Korean workers, according to South Korean estimates. That gives China a huge competitive advantage.
50.The transition of China from an agricultural nation to an industrial country will be very slow and difficult.