you forgot Addis Ababa Ethiopia. Speaking of Ethiopia, they have a lot of similarities with China politically, Socialist in name while Fascist in practice. One difference is that The Ethiopia government loves the Jehovah's Witness religion because JWs stay out of politics. I wonder if the PRC will ever cynically change its tune in that regard.
China's New export drive - trains and rail systems
by fulltimestudent 29 Replies latest social current
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DJS
FTS,
This is part of China's long term strategy to develop a trade based system that more closely resembles the German model. In order to bring as many of its citizens into the economic system within a reasonable period of time, they simply cannot detour from their trade first model. Having said that, the German model (higher end goods with a higher profit margin and typically less susceptible to recessions) is being embraced. That doesn't mean that China will end the low cost/margin manufacturing and exporting. It will likely be their primary thrust for a long time.
The educated workers can easily move into the higher tech/durable goods jobs, while the uneducated agrarians are likely targeted as replacements/backfills. We are likely to see factories re-located to the agrian areas, if it hasn't already started. They are building the infrastructure to make it occur.
Not a bad model, actually. Their GDP is heavily reliant on exports; internal consumer consumption isn't high or stable enough to allow a spreading of the wealth, not yet at least. Government spending/investment as part of their GDP has risen sharply since the Great Recession started, which is a Keynsian model that has worked fairly well for them.
The Chinese leaders know quite well that an export driven GDP/economic model is problematic, but they have few other choices. All things considered, I give them an A- to this point. Real problems loom on the horizon, but I am pulling for them.
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DJS
Another Economics lesson:
We have talked about in previous OPs that the advantage the Chinese have had for many years in labor costs is very quickly coming to an end for the low cost/low profit margin manufacturing sector. In other words, at the current pace of wages and benefits, China could lose this advantage within a couple of years, making it feasible for consumer countries to look elsewhere or start their own manufacturing. Higher wages and benefits can be offset to a large degree by increased productivity, but their factories have likely seen those capabilities maxed out.
Their entry into the durable goods marketplace almost certainly is buoyed right now by that same wage advantage, and they probably have 10 - 15 years or so to maintain that advantage in that market. By moving the low cost/profit manufacturing sector to the agrarians, who would work for much less than the current Chinese workers who are gaining sophistication and a consumer mentality, they can extend that advantage in labor costs in the lower end consumer goods market out for many years.
The Chinese have good economists. Given what they have to work with, they are making a lot of smart moves.
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fulltimestudent
SonoftheTrinity5 hours ago
you forgot Addis Ababa Ethiopia. Well, so I did - thnx for pointing that out! Actually there are two Chinese rail projects in Ethopia
The first is a light rail system with two intersecting lines, in the capital:Addis Ababa’s rail project keeps Ethiopia on track for transformation
Although there will be shortfalls in the country’s infrastructure programme, the railway will be an impressive achievement
Addis Ababa’s $475m light railway system, part of a five-year growth plan, covers a 21-mile stretch through the Ethiopian capital. Photograph: Carl De Souza/AFP/Getty
Out of the dust and rubble of decimated junctions, soaring slabs of concrete are returning a semblance of order to the centre of Addis Ababa, Ethiopia’s mushrooming capital.
The edifices are there to prop up Africa’s first light rail system, an arresting sign of Ethiopia’s progress since the dark days of famine and military rule (pdf) in the 1980s. The government hopes the project, funded and built by China, will be running next year – possibly in time to transport voters to polling booths at national elections in May.
The $475m (£295m) electrified rail is one of many projects in an ambitious five-year growth and transformation plan that ends in July. Although there will be shortfalls in the Soviet-style strategy based more on aspiration than expectation, the rail is set to be an impressive achievement by a nation desperate to shed its tag as a poster child of poverty.There's more - read it if you want at: http://www.theguardian.com/global-development/2014/oct/22/addis-ababa-monorail-ethiopia-on-track
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China-funded Light Rail Project Puts Ethiopia on Track for Transformation.
Reference: http://english.cri.cn/12394/2015/02/08/3801s865446.htm
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fulltimestudent
The second project is a heavy rail project to link the interior to the port of
Reference: http://www.businessinsider.com.au/chinas-global-influence-is-growing-2013-3
THE BUSINESS INSIDER AUSTRALIA.
China's Latest Ethiopian Railway Project Shows Their Growing Global Influence
JENNY VAUGHAN MAR 10 2013, 10:43 PM
Photo: M.I.C Gadget via flickr
Camels rather than locomotives lumber over the railway tracks in this remote desert, famously traversed by storied French adventurers Arthur Rimbaud and Henry de Monfreid in the early 20th century.The old French-built railway that connected Addis Ababa, the capital of landlocked Ethiopia, to the Red Sea port of Djibouti, is now being replaced by a Chinese-built electrified railway, a bold project that seeks to boost Ethiopia’s commercial exports.
The new project also symbolises a shift in Ethiopia’s international relations.
“You see nowadays that the dice are thrown differently. Chinese, Indian (and) Turkish interests are now taking over… times have changed,” said Hugues Fontaine, author of the recently published book “Un Train en Afrique”, or African Train, about the historic Ethiopian train.
Indeed, Ethiopia is casting its dice eastward — seeking investors to help it achieve its grandiose Growth and Transformation Plan (GTP), which seeks to boost economic growth and achieve middle income status by 2025.
The construction of the railway is a key component of the GTP: a series of eight rail corridors totalling 4,744 kilometres (2,948 miles), creating a series of key trade routes to neighbouring Kenya, South Sudan, Sudan and — crucially — to Djibouti’s port.
Two Chinese companies are contracted to build the $2.8 billion (2.15 billion euro) line connecting Addis Ababa to the Djiboutian border by 2016, and Turkish and Brazilian companies are slated to construct other segments of the nation-wide rail network.
“We are working day and night,” said Zacharia Jemal, project manager working for the Ethiopian Railways Corporation.
Zacharia said the project will create 5,000 local jobs, and allow Ethiopia to boost exports of key commodities such as coffee and sesame. It also offers the opportunity to get Ethiopian workers trained by engineers from the Chinese Civil Engineering Construction Corporation.
The company is building the line from Mieso to the Djibouti border at a cost of $1.2 billion (923 million euros), of which 70 per cent is financed by the Export-Import Bank of China and 30 per cent by the Ethiopian government.
Another Chinese company will build the Addis Ababa to Mieso segment.
While the economic benefits of the train — which will be used for both freight and passenger transport, replacing slow and costly truck transport — is widely recognised, some lament the seemingly inevitable death of the historic French-built diesel-powered train, which went out of service in 2008 after years of neglect.
“In terms of the economy, the (new) train could be very profitable for Ethiopia, one machine could replace 10 trucks… and (maintenance) is easier and more cost-effective,” said Josef Petros, who worked for the French railway company for more than 30 years.
But he said that if the old train ceases to operate, it will be a great loss for Ethiopia and for Dire Dawa, the commercial town in northeastern Ethiopia where the main train station and workshops were headquartered. The new station is slated to be built just outside Dire Dawa, a town renowned for its French atmosphere.
“Dire Dawa will suffer,” said Josef, who is now the director of the French cultural centre in the city.
The train station — known locally as “la gare” — and the workshops still stand, unused for years. Employees still arrive at work diligently just after dawn every day, only to sit among the abandoned train cars and imported French machinery, seemingly frozen in time.
They still receive a monthly stipend from the company, which is now run by the Ethiopian government.
They hold out hope that the diesel train will be revived one day, but the European Commission-funded project to rehabilitate the old railway at a cost of $55 million has stalled due to a contractual dispute.
Nonetheless, the 750 employees — down from 2,000 — of the old line maintain a sense of pride at having worked for the French company. Many speak French and retain an extraordinary technical knowledge of the ancient trains.
“When you worked for the train, you were considered to be a very important person,” said Josef. “If you had a son or a brother working for the railways, the whole family was very proud of this.”
It brought many employees a sense of pride — in addition to a generous salary — to work for the French on a train that was conceived by Ethiopia’s first modern patriarch, emperor Menelik, who pursued the ambitious rail project to introduce modernity in Ethiopia, boost economic productivity and show the world “that the Ethiopian state was something to be considered seriously”, according to Fontaine.
Similarly, the new electric train will launch Ethiopia into a modern era of rail transport. It will be one of the first electric trains in East Africa, will run at a speed of 120 kilometres an hour and will be both easier and cheaper to maintain, as it will be mechanised and rely on locally-produced hydropower to run.
It’s also a source of pride for the workers involved in boosting development and contributing to Ethiopia’s industrialising economy.
“It is good to be involved in this nationalistic project, it’s historic,” said project manager Zacharia, driving to a building site for the new train where Chinese men in hard hats show Ethiopian workers how to use Chinese-imported excavators.
But whether the legacy of the Chinese in Ethiopia will have as strong an imprint as the French remains to be seen. Unlike the French, Chinese workers will not settle in Ethiopia permanently, and the cultural exchanges are limited to simple greetings exchanged in Mandarin between Chinese and Ethiopian workers.
“This influence will stay on in history, but it will not be as significant,” said Josef.
Copyright (2013) AFP. All rights reserved. -
fulltimestudent
you forgot Addis Ababa Ethiopia. Speaking of Ethiopia, they have a lot of similarities with China politically, Socialist in name while Fascist in practice.
"Fascist" is a term that often gets used a lot without much understanding of what it means. One reasonable definition seems to be this:Fascists view World War I as having made liberal democracy obsolete and regard total mobilization of society led by a totalitarian single-party state as necessary for a nation to be prepared for armed conflict and to respond effectively to economic difficulties, such a totalitarian state is led by a strong leader as a dictator and a martial government composed of the members of the governing fascist party to forge national unity and maintain a stable and orderly society.
And, of course, the definition is essentially one seen from the perspective of western (Anglosphere) liberal democracies, who glibly and rather self righteously preach 'democracy' to the world without any consideration of the real problems evident in western democracies.
I see two major problems. The first is that governments in western democracies tend to be run by amateurs. Second, most western democracies are really semi-democracies. They tend to offer a choice to the electors, of voting for either one of two major oligarchies, who once elected ignore the wishes of the voters and run government as their own private fiefdoms. You may then think of a third problem, the fact that most of the voters do not understand the intricacies of modern political and economic problems, so that electioneering advertising is offered at a most simplistic level. When you consider those problems, you may prefer a fascist government (Joke).
I have not studied Ethiopian politics. But I do study Chinese politics. The CPC has evolved into offering first class professional government that has succeeded in solving the problems of succession. It may be (as we outsiders study their system), that a lot of focus is currently being placed on evolving the system further to allow continual monitoring of citizen opinions on a variety or topics. This seems to be starting at the level we call local government. I recently attended a talk by a Professor from the National University of Singapore that examined four case studies of city/town level governments seeking citizen input. I cant forecast how it will turn out, but they may succeed in overcoming some of the problems that western governments are not overcoming. -
SonoftheTrinity
fulltimestudent, it isn't just the Anglosphere, but the voting with your feet effect. The dissidents leave and tend to poison the well in their new country. But after 8 years of George Bush and Barack Obama, I am a little burnt out with strong leaders with their cults of personality. Democracy and freedom are supposed to be a little messy. If you want a cult of personality and a strong leader, why not just have a monarchy? (BTW I think Ethiopia would project a more stable image if the monarchy were to be restored.)
We don't need someone who can lead, we need someone who can listen to the people and compromise.
Concerning the Chinese and cultural exchanges, even if neither government will encourage them to settle permanently, with the woman shortage in China, the charms of Ethiopian women, especially in the impoverished towns along the length of the railway, will probably prove irresistable to many.
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fulltimestudent
SonoftheTrinity - Democracy and freedom are supposed to be a little messy. If you want a cult of personality and a strong leader, why not just have a monarchy?
(grin) Umm! Like North Korea? The Kim's are kings in all but name.
SonoftheTrinity - with the woman shortage in China, the charms of Ethiopian women, especially in the impoverished towns along the length of the railway, will probably prove irresistable to many.
Well, nature always wins, eh?
I guess Cameroon is not quite Ethiopia, but maybe its near enough for you. So I smiled when I read your comment after earlier reading this report in a Chinese newspaper this morning.
African-Chinese couples on the rise in Guangzhou, China
March 1, 2015
In China, parts of the southern city of Guangzhou have become a melting pot of Chinese and African cultures. The number of marriages between African immigrants and local Chinese has been on a steady rise. CCTV’s Audrey Siek reported.
Kingsley Azieh is a businessman from Cameroon. In 2007, he started work as a trader in Guangzhou. From building materials to clothing, Kingsley is supplying Africa with what it needs. He has become a leader of the African business community in Guangzhou. It’s Guangzhou he put down roots. He met his future wife in northwestern Shanxi province where they married. Kingsley said the beginning wasn’t easy.There's also a video at the link just above.
And somewhere in this section I posted some more piks and info on Africans living in Guangzhou in south China.
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SonoftheTrinity
I was referring to His Imperial Majesty Emperor Haile Selassie the Great, the world's last true philosopher king, the staunch anti-communist whose African pride still trained Nelson Mandela to be a guerrilla and personally gave him a Makarov to smash Apartheid.
None of the Kims, Deng Xiao Ping, or Meles Zenawi could hold a match to H.I.M. in terms of charisma and wisdom. Seriously, either Prince Ermias or Crown Prince Zara Yakob would be better heads of state than the puppets of the Neo-Apartheidist Tigrean kleptocracy who are leading Ethiopia now. The Ethiopian Presidency is the most useless lame duck office ever created, while the winner takes all Prime Minister upsets the entire separation of powers. Kim Jung Un is a monarch in all but name, with all the power of an Oriental Tyrant but none of the manners or refinement of one. Seriously, what did they teach him in Switzerland other than to be an elite overweight twit?
BTW I am an Post-Rastafarian teacher of Amharic whose Rastafarian Order's chapter folded and wandered over to Ethiopian Orthodoxy. While Ethiopians lagged behind in technology, they had enough exposure to the Greek and Arabic cultures that what they lacked in technology they overcompensated in rhetoric, logic, and debate. This heritage is reflected in a penchant for debate among the expatriate community since the opposition parties have been crushed. I have been exposed to them enough that despite being a Ferenj, I have been drawn into their culture of debate.
I cringe at the prospect of the opposition in Ethiopia being permanently ossified and toothless like the minor political parties in the PRC or the opposition parties of PRI dominated 20th century Mexico, but that does seem to be where things are going.
I think there are a lot more Unions of Chinese men and African women than of African men and Chinese women. The fact that his wife is from the Northwest speaks volumes. It is an impoverished and neglected region, and if his wife is from one of the minorities in China, it would make total sense. But love conquers all.
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fulltimestudent
DJS:
This is part of China's long term strategy to develop a trade based system that more closely resembles the German model. In order to bring as many of its citizens into the economic system within a reasonable period of time, they simply cannot detour from their trade first model. Having said that, the German model (higher end goods with a higher profit margin and typically less susceptible to recessions) is being embraced. That doesn't mean that China will end the low cost/margin manufacturing and exporting. It will likely be their primary thrust for a long time.
I intend to sit down one day to a lengthy and intensive study on the intent evident in the 5 year plans, that the Chinese government uses to implement their goals, versus the actual results, to try and discern how useful that planning has been.
At this point in time I can only offer a few general comments.
1. Clearly at a macro level, the post-Mao administrations have planned their moves very carefully. The State Owned Enterprises were turned into corporations, usually in such a way that were at least two competing enterprises. As an example, the old CAAC -Civil Aviation Administration of China (in Chinese - 中国民用航空局 - Zhōngguó Mínyòng Hángkōng Jú ) which controlled Aviation in China and operated passenger services was split up, and became the Administrative section plus three main airlines (Air China, China Eastern and China Southern - there were some others in the beginning) which were seen as regional hubs. They have competed with each other fairly successfully and today can be described as good airlines. On Sydney-China routes I've flown with Australia's Qantas, China Eastern and Air China. You really cant tell much difference between them from a quality viewpoint. (One thing - the Chinese airports are much better than Sydney's International airport - and they process arriving passengers faster - in my experience).
My guess is that the competitive element has forced the heirloom companies to get better or get out.
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2. But there have been other factors. Generally, there seems to be an element of "have -a-go" in China. There is sufficient commercial freedom for individuals to start their own business and become wealthy.
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3. And, at the same time there is village based commerce, such as the well-known Huaxi village. Here's a peep inside that interesting village (now town) whose success has been based on a combination of socialism and tradition: http://www.businessinsider.com.au/huaxi-the-richest-village-in-china-2013-12?op=1#thats-not-the-only-weird-thing-about-china-25
and
https://www.youtube.com/watch?v=yru1C-RE7lc
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4. And, then there are some interesting trends. For example robotics:
An example of what's happening:
(Beijing) – Every day, two quality-control supervisors monitor four robots tirelessly assembling remote-control devices for home appliances at a Midea Group factory in Foshan, in the southern province of Guangdong.
The robots recently replaced 14 workers on the plant's assembly line for remote controls. And soon, according to Midea's Home Air Conditioner Division Deputy General Manager Wu Shoubao, more robots will arrive to replace the quality-control supervisors. Reference: http://english.caixin.com/2015-03-05/100788376.htmlFrom DJS:
The educated workers can easily move into the higher tech/durable goods jobs, while the uneducated agrarians are likely targeted as replacements/backfills. We are likely to see factories re-located to the agrian areas, if it hasn't already started. They are building the infrastructure to make it occur.
I agree, particularly as the government's stated intention is not only to continue extending cities and building new cities, but to remodel the countryside into towns which will provide a full range of services. And, its not only industry that is interested in that move. Hi-tech firms are also considering the potential in such a move:
http://www.chinadaily.com.cn/regional/2015-03/04/content_19717651.htm
DJS: Not a bad model, actually. Their GDP is heavily reliant on exports; internal consumer consumption isn't high or stable enough to allow a spreading of the wealth, not yet at least.
It seems that the government is now (and, has been for a while) focusing on stimulating internal consumption. Seven years ago, I went to a lecture by a professor from a leading Shanghai university (he also served on some high level Government economics boards) he stated that the way forward could not on exports. Further, he stated that the government had no choice but to increase earnings. Nothing happens overnight in an economy the size of China's, but a few years later there was an increase in the lowest wage levels, as well as instructions in some areas for the lowest level of factories to find a new home, either overseas or in poorer provinces. There have now been reasonable wage increases for the last four years, and of course that's leading to the changes you've mentioned.
One thing I cannot yet get clear, is how many lower level Chinese owned factories have moved off-shore to areas with lower wages. I suspect there may be quite a large number. Why? first there is a large increase in overseas direct investment from China and second, there is the official policy of building a new Silk route and belt, which in practise seems to be an invitation by the Chinese government to nearby countries (The Phillipines, Vietnam Cambodia. Laos (Laos already has heavy Chinese investment) Myanmar, Sri Lanka Bangladash, Nepal, Pakistan, West Africa, Afghanistan and the other 'stans' including Kazakhstan, Mongolia and South Korea. I'm sure that North Korea has likely been invited, but as you can imagine such an opening may mean some difficulties for the present administration. It would also seem (to me) that India, Russia and Iran have had an offer, but may not be sure of what they want from this offer.
This is world planning on a scale never seen before. (I daresay, the Americans could've done it with the Monroe doctrine in the America's but possibly were mentally stuck with an older vision) If the Chinese succeed we will be living in a completely different world.
DJS: The Chinese leaders know quite well that an export driven GDP/economic model is problematic, but they have few other choices.
Maybe the saying about how to see a half full glass of water applies at this point.
DJS: All things considered, I give them an A- to this point. Real problems loom on the horizon, but I am pulling for them.
I support them also. The Chinese government has worked diligently to modernise China. The attempt to build a socialist economy and the tensions created by that wrong turn delayed things a bit. As did the money they felt forced to pour into their "third line (of defense)."
And, beside internal errors, there was the initial problems caused by American sanctions. Mao is blamed for China's last great famine, but of all the unknowable number of deaths, some must be attributed to American sanctions.
Of course, the government could only set goals and indicate the path to follow, the hardworking people of China must be lauded for much of the success they have achieved.
I first became intrigued by the China experience back about 1952 (I think) I was about 16 and interested in achieving a better world. Somehow, I heard of a film about China (re-constructs) in Sydney's China town and attended. It was all in Chinese and turned out to be organised by the Communist Youth League, and, ironically most of the Chinese attending were elderly. But that's what shocked me, after the film and talk (still in Chinese) there was a collection. At the time I was earning about 5 pounds (ten dollars) a week and these elderly Chinese who looked as if they had nothing were tossing 20 pound notes into the hat. I later realised I was seeing something significant. But events swept away my initial feelings of interest.
The Australian government introduced conscription (for the Korean war), and I realised I would be conscripted. As an idealist I was a pacifist and decided I would go to gaol instead. Then I heard that JW's wouldn't join the army either, and wanted to know more about them. The rest of my story will be much like everyone else's here.
