Wednesday, April 18, 2007

Stillwell's revenge

For those who have not seen it, Roger Cranville is updating an online journal on the Pittsburgh Business Times covering the China mission of local apparachniki this week. For all the obvious reasons China is important and bound to become more important. Nobody needs me to tell them that. It is worth reading his comments online.

If you ask me, the real China story in the end will not be about the country's growth over the last decade, but how they handle the restructuring that has to happen as they continue to grow. Several regions such as Harbin and others may be thriving now, just as we were once, but are already facing a dire need to trasnform away from regional economies based on outdated heavy industries. Sound familiar?

Not to be the contrarian, but there are already questions about the rate of growth China has been experiencing. That is not me talking, but Pitt's Tom Rawski who knows the Chinese economy better than anyone this side of the international date line. See this Forbes article for a summary of Professor Rawski's perspective. For a longer perspective you can read his paper What is happening to China's GDP Statistics?

My only insight into China is this. I have a standard presentation on the Pittsburgh economy that I present to various groups when asked. There were some visitors from China earlier in the year and I went through the whole thing that covered Pittsburgh's economic history, transformation and forecast for the future. After I went through all of that, literally the only question the visitors had for me was how much coal the Pittsburgh region produced annually. they really wanted to know a specific number in tons per year. I had no idea, but the fact that that was the most important topic to them was a very telling question.

Other snippits from Roger's day 3 journal entry. He mentions the expansion of Westinghouse Nuclear into China which is a big deal for the region. Bigger than we are talking about thus far. The scale of the anticipated expansion of Westinghouse has had different numbers assigned to it. 1,000 new jobs has been a number bantered about in the press, a number I always thought kind of low. Cranville's journal entry yesterday has a number of 500 new hires per year for 5 years. I think that is more than 1,000 and I have to believe most of those hires will be coming here from outside the region.

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