China Shakes The World: The Rise of A Hungry Nation
by James Kynge
I picked up this book to increase my understanding of how things work inside of the fast-growing economy and most populist country in the world. Kynge was the China Bureau Chief for the Financial Times from 1998 to 2005 providing him a very expansive viewpoint on the changes going on inside of China over a period of immense change in China.
Kynge looks at how entrepreneurs in China are leveraging access to liberal capital access from China’s banks to dramatically start and grow entire new business empires. One example he describes is how an entire out-of-date steel mill based in Dortmund, Germany [employing at its peak 10,000 workers] is purchased by a China entrepreneur, deconstructed by an imported team of Chinese works, transported to China and reassembled as an exact operating replica. This project was appropriately named Phoenix.
This book explores the issue that even with an economy growing at 9-10% per year, China generates a few million less than the need 24 million new jobs each year. Beijing politicians face incredible pressures to keep the economy growing in order to generate these new jobs in order to maintain peace and order. He says, “China is like an elephant riding a bicycle. If it slows down, it could fall off and then earth might quake.”
Some of the statistics Kynge presents about China’s economic boom:
- 400 million people raised out of poverty
- 120 million people migrated from farms to factories
- Quantum leap in education standards for 10’s of millions of children
- Construction of first world infrastructure on a massive scale
- Growth of over 40 cities with populations exceeding 1 million people
- Commercialization of housing
- Vaulting progress up the technology ladder which has helped unleash one of the greatest ever surges in general prosperity
- Lowered cost of goods leads to greater purchasing power of the poor in developed countries
He contrasts this with the dark sides of China’s boom:
- Massive pollution which dramatically impacts their citizens’ health and beyond their borders
- Poor working conditions in many factories with very limited ability for workers to organize
- Growing inequality of the richest and the poorest
- Massive demand for natural resources domestically and globally acquired at “any cost” without regard for human consequences
- Widespread corruption
- A failed healthcare system
Kynge covers many of the more recent tussles between China and developing countries on military objectives, offshoring, populists movements and more.
While this is not per se a book about defeating poverty, it is a good read for understanding some of the complex dynamics at play inside China … still home to 100’s of million people living on less than $2/day.