China’s Growth Heads to the Interior

All too often, Western analysts tend to depict China as a single unit. This is inevitable when national statistics are used to report on economic and some political trends. Adam Nathan Mayer, however, has a useful article over at that does a nice job of laying out how China’s growth is shifting in very important and fundamental ways. Rather than concentrating employment and income growth around the coasts (Shanghai, Guangzhou, Shenzhen, Hong Kong), growth is moving to interior cities such as Chongqing, Chengdu, Wuhan, Xi’an and Kunming.

These interior cities are often considered second or third tier in the national urban hierarchy, but they probably won’t be there for very long. These cities, plus a few other important second and third tier cities feeding off the mature coastal economies, are the engines of China’s growth in ways not to dissimilar to the rise of the Midwest and Northeastern states (excluding New England) during the US’s industrial revolution.

As China continues to urbanize and these cities grow, the need for a wide range of core new infrastructure is inevitabe, from roads to basic utilities.

I’ve weighed in on this before at, and nothing in China’s recent experience suggests these trends have abated.

Mayer’s China Urban Development Blog is also worth perusing for those who are serious China watchers.