China, with over one billion people, already has six megacities, including Shanghai, Beijing, Guangzhou, Tianjin, Chengdu, and Shenzhen. Each megacity has a total population in excess of 10 million, which means that these cities have more people in a small area than whole countries like New Zealand.
China’s growth in the recent years has been incredible. If this rate of development continues, the country may well change beyond recognition in the future. Many financial experts predict that China will continue to be the world’s largest economy and grow even more in wealth and stature, but how will that be achieved and what does that mean?
New Megacities and Infrastructure
China’s megacities have been planned by the government; some were even built from scratch. Although China has so far focused on the larger cities, it has now started to develop big ones further inland as well.
There are already two megacities being developed at the moment, and they are targeted to be completed around 2020. China has already invested in the development of roads, bridges, power grids, airports, tunnels, and public transportation needed to accommodate the megacities. They are currently in the process as well of a big water diversion from the Yangtze River to the Yellow River so that the megacities in the north can be serviced with enough water.
There is a big wealth divide regarding wealth in China. Some people in the cities are very wealthy while majority barely eke a living. In general, though, city people also enjoy a relatively comfortable life compared to those in the countryside who have little or no education.
China believes this will change dramatically as the younger generation migrates from the countryside to the megacities in search of a better life, an education, and a career. Although poverty reduction is not a simple issue, more education generally means more spending power, reducing poverty.
China has always been the country to encourage investments within its own walls but rarely invests in other countries itself. However, that, too, is slowly starting to change as a new demand for global real estate has started. China has targeted the US as the place to invest in. In fact, last year Chinese investors placed $12 billion into the US real estate market. The plan is to eventually expand this global real estate investment which will give China revenue from other countries.
China used to be quite behind other countries regarding online shopping as they had little resources for online shopping platforms or payment systems. However, recent data has shown that online shopping has soared by 48.3 percent during the first part of the year as the number of internet users has increased almost exponentially. There are currently 600 million people in China who have access to the internet.
This trend shows that Chinese shoppers are becoming quite sophisticated in their buying options and have good buying power. As companies start to make their products available online, this will bring in more finances to the Chinese market. Pretty soon, online shopping will aid China’s financial and economic growth.
Some experts believe that China will also need to make some changes to the country in order for this huge growth to be truly effective. For example, with so many people living in the megacities, pollution has started to become a problem as has the available free land needed to expand smaller towns.
Currently, the government owns all farming land, which means they can basically take the land and sell it for development. This is causing problems for the farmers who ultimately lose their livelihoods.
As with all progress, however, change is inevitable and China’s future financial situation looks very strong indeed.