I took the bullet train from Shanghai to Nanjing today, a journey in a pleasant 1st class, sparkling clean rail car at 200 km/hour, for about $30. Rail is such a great way to travel in China. It’s efficient, convenient and inexpensive, plus you see things you would never see from an airplane.
Along the way, in every direction, are miles and miles of factories. They come in all shapes and sizes – small and squat to enormous smokestacks –apparently producing simple assembled products, electronics, plastics, castings and everything you can think of in between.
Chinese Finance Minister Lou Jiwei told the G-20 meeting in 2014 that manufacturing accounts for nearly 60% of Chinese GDP, an unsustainable share which has created the problems of pollution and overcapacity, he said. This is very evident as I traveled through the manufacturing areas between Shanghai, Wuxi and Nanjing. The pollution was overwhelming; the skies were thick with a smoky fog and the sun was a muted disk low in the sky. The pollution gets so bad from time to time that people wear surgical masks whenever they are outside during the most dangerous periods.
The Chinese government is no longer shying away from or denying allegations of the horrendous air quality. In fact, in the latest government Five-Year- Plan, China is finally putting real muscle and money into environmental clean-up. I expect to see substantial improvement over the next few years. In addition, China plans to use the excess manufacturing capacity to address the needs of their own burgeoning middle class by producing products demanded at home.
Americans need to work on balancing the difference between the Chinese economy supported by 60% manufacturing and the US economy where only 11-12% is based on manufacturing. Manufacturing is the fundamental backbone of a healthy economy. We need to bring some of it back to the US- but very carefully. We want skilled jobs that pay a living wage and don’t pollute the environment.