Tuesday, July 12, 2011

On phantom facts and China bears - Shaun Rein

Shaun Rein
The China bears should get their facts straight, writes business analyst Shaun Rein in CNBC. He takes aim at economist Nouriel Roubini and MIT professor Huang Yasheng.

Shaun Rein's arguments against Huang Yasheng:
Huang ..., in a July 6, 2011 blog post in the New York Times says, “Beijing and Shanghai have some of the lowest population densities among the world’s big metropolises.” From this Huang concludes that Shanghai’s infrastructure buildup is not needed.

In fact, Shanghai has the highest density of urban populations in the world at official population numbers, which does even include millions of unregistered workers in the city. It is not uncommon for Shanghai families of three or more to live in less than an area of 200 square feet per person, while the average home in America is 10 times that size.

Most workers in the restaurant and construction industries live in sub-human dormitories, where eight people or more share a room. Infrastructure spending is badly needed to relieve living congestion by allowing for cheaper land sales farther from the city center just to get basic living space for people.

Huang also underestimates the middle class’s purchasing power, but he does bring up important issues. Namely, China needs to avoid falling into the middle-income trap that many developing countries do when per capita GDP hits $6,000 a year and stagnate. If it does not, China will be more like a Mexico, with huge income disparity between the rich and poor, rather than the world’s leading economic superpower.




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Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.
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