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Overlooked in 2010: China\'s lower tier cities

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22 December 2010 11:53

Catherine Chan is an environmental lawyer and journalist in Beijing.

Beijing and Shanghai spring to mind when most non-Chinese think of China. But the real and untold story of China is the development of the 2nd, 3rd and 4th tier cities. The fact is that China, with its internal competing economies, vast geographical differences and cultural and social variances, can be likened more to a group of nations within a larger framework, like the EU.

China's tiered city system is characterised primarily by a city's economic scale and population size, with Shanghai and Beijing vying to top the list with permanent populations (excluding the migrant worker populations) of 20 million and 22 million people respectively. 

Wuhan (pictured), the inland capital of Hubei province, is one of the lesser known stories. A major transportation hub commonly recognised as one of the Three Furnaces of China for its spectacularly hot summers and the presence of heavy industry, Wuhan is home to the Wuhan Iron and Steel Group (WISCO), which has recently engaged in an Australian joint venture. The province best known for its filthy black skies and putrid waterways will soon lay claim to the world's third tallest building, which will stand 606m (the world's tallest Burj Khalifa Tower stands at 800m).

The 'bottom-up' perspective on China has been reviewed in the recently published HSBC guide to China's regional provinces and cities. The guide points to the shifting power plays in China, telling the story of a country where the writ of officials in the capital is tempered by 'local governments (empowered) with unprecedented economic authority.' Mind boggling scale is par for the course – the guide predicts that within a decade China will have six provinces with an annual GDP exceeding US$1 trillion – equal to six countries the size of Canada.

The remote coal mining town of Erdos in Inner Mongolia is another obscure centre experiencing a wealth explosion. Its GDP per capita jumped from RMB 13,000 in 2001 to RMB 102,000 in 2008. Karamay in north western Xinjiang, near the border with Kazakhstan, is also a case in point. The tiny town had a GDP per head of RMB 100,000 in 2008 — bear in mind that Beijing's is in the mid 60k's. 

However, caution is still pervasive. The guide warns that, far from being coordinated, growth-related ambition has increased inter-regional competition, and that the flood of investment could lead to further over-capacity and bad debt.

Photo courtesy of Wikipedia.

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