How can China become a developed country through Chinese champion companies like BYD ?
It's a story of industrial supply chain distribution and geography...๐งต
This map shows the GDP per capita of all Chinese provinces.
It's a story of industrial supply chain distribution and geography...๐งต
This map shows the GDP per capita of all Chinese provinces.
According to the World Bank's definition of High income and upper middle income economy:
Red and Dark/Mid-tone Orange, have reached High Income country status (Red mid-high income, Orange just reaching the threshold).
Light Orange & Blue are upper middle income regions.
Red and Dark/Mid-tone Orange, have reached High Income country status (Red mid-high income, Orange just reaching the threshold).
Light Orange & Blue are upper middle income regions.
There is a clear disparity between coastal and inland provinces.
There are also disparities between provinces connected by the Yellow river and the Yangtze river.
With provinces along the mid and lower reaches of Yangtze being richer than those along the Yellow river
There are also disparities between provinces connected by the Yellow river and the Yangtze river.
With provinces along the mid and lower reaches of Yangtze being richer than those along the Yellow river
Few months ago, BYD, the biggest EV carmaker in the world, have invested in Fufeng county of Shaanxi province.
Situated in the upper reaches of the unnavigable Yellow river, Fufeng county and Shaanxi province in general remained relatively poor.
Situated in the upper reaches of the unnavigable Yellow river, Fufeng county and Shaanxi province in general remained relatively poor.
Thanks to the Poverty alleviation campaign, the previous poverty stricken county of Fufeng were transformed into a nice place to visit.
Many historic sites were renovated to bring in tourists.
But wages remained relatively low and job opportunities few and far between.
Many historic sites were renovated to bring in tourists.
But wages remained relatively low and job opportunities few and far between.
They escaped poverty, but isn't close to be considered a high income region.
Similar stories are happening in other inland regions where water based transport can't be accessed.
China is at a developmental watershed moment, we've eliminated poverty, now it's about getting rich.
Similar stories are happening in other inland regions where water based transport can't be accessed.
China is at a developmental watershed moment, we've eliminated poverty, now it's about getting rich.
This is where champion companies like BYD comes into the picture.
In 2023, BYD launched their investment plan to turn Fufeng county into a manufacturing hub.
In 2023, BYD launched their investment plan to turn Fufeng county into a manufacturing hub.
The demand for labor is so high, the Fufeng county government had to issue a national notification
Calling residents of Fufeng who are working in other provinces to comeback and fill in the vacancies.
Calling residents of Fufeng who are working in other provinces to comeback and fill in the vacancies.
A car is the most complex consumer product.
Outside of housing, a car is the most expensive thing most people buy.
This means the car industry has an incredibly long and complex supply chain, where high paying jobs exists at all levels.
Outside of housing, a car is the most expensive thing most people buy.
This means the car industry has an incredibly long and complex supply chain, where high paying jobs exists at all levels.
Companies like BWM may invest a lot in China, but their core supply chain is still in Germany.
BYD being Chinese, can pick regions that needs investments, who are situated in an ideal location, to turn them into a manufacturing hub.
BYD being Chinese, can pick regions that needs investments, who are situated in an ideal location, to turn them into a manufacturing hub.
The high paying manufacturing jobs can then be the source of consumption in the local area, expanding the local services industry.
This is how to turn a region that have escaped poverty into a prosperous high income region.
This is how to turn a region that have escaped poverty into a prosperous high income region.
This is why countries like Mexico, Malaysia and Thailand are stuck in the middle income trap.
Because they do not have national champion companies that will keep high paying jobs in their country.
Foreign investments will prioritize bring in labor intensive and low paying jobs.
Because they do not have national champion companies that will keep high paying jobs in their country.
Foreign investments will prioritize bring in labor intensive and low paying jobs.
Once the local wage becomes too expensive, these foreign investors will pull out.
Leaving these countries with only service industry jobs.
Hence why countries stuck in middle income traps are mostly touristy countries without much industry.
Leaving these countries with only service industry jobs.
Hence why countries stuck in middle income traps are mostly touristy countries without much industry.
If your country is a high potential developing country (India, Vietnam, Indonesia, Brazil etc)
And you cannot name a globally competitive brand that competes in an industry with a long supply chain
Then your country is in danger of falling into the meddle-income trap
And you cannot name a globally competitive brand that competes in an industry with a long supply chain
Then your country is in danger of falling into the meddle-income trap
The global capitalist won't hesitate to pull the rug from under your feet.
This is why the global south must unite to build a competing system, where more countries can move into high income.
But some developing countries are still dreaming about getting into bed with the US
This is why the global south must unite to build a competing system, where more countries can move into high income.
But some developing countries are still dreaming about getting into bed with the US
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