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Last Updated: Saturday, 19 February, 2005, 12:22 GMT
China's thriving new economy

By Evan Davis
BBC economics editor

The Chancellor of the Exchequer Gordon Brown is to travel to China where he will get a chance to inspect, at first hand, the extraordinary pace of urban development in the country.

Chinese factory
Economic growth and development have transformed China

I came up with a theory when I was in China.

The theory was that if you drive all the way along a road in a Chinese town, and you carry on to the very end of the road, eventually you always come to a building site. This is where they are extending the road, and extending the town.

The theory did not always work, but it was not bad.

I developed it in the medium-sized town of Leshan because, like much of urban China, Leshan has seen permanent construction replace permanent revolution.

With 10 to 20 million people migrating from the country into towns each year, China is creating the equivalent of a city the size of Geneva every week.

This urbanisation is not a mere by-product of the country's economic development, it is the development. There are surplus workers and only low value jobs in the countryside, and there are productive industrial jobs in towns.

Therefore, China is "one country, two economic systems", the rural and the urban, with one system slowly being displaced by the other.

Urbanisation

In Leshan, we saw this process.

Yes, we drove to the end of a long road, and yes, my theory was right, there was the construction site.

But there too, was an elderly farmer, standing on his own in his field, next to a few rows of vegetables and near a couple of buffalo chomping on the grass. It was bitterly cold, and the farmer evidently did not have much to do.

Chinese farmers harvesting rice
Farmers are being pushed further out by urbanisation

The construction workers evidently did have a lot to do, extending an industrial estate, ploughing over the fields, flattening the ground and carving out a new road.

And all that, only metres from the farmer.

The scene was reminiscent of that famous image of the man in front of the tanks at Tiananmen Square. Here, there were no tanks, just earth-moving equipment.

The farmer was not exactly obstructing them, he was just gazing, but you could imagine him taking a forlorn stand against an anonymous power.

We went over to talk to him.

He was weather hardened and rough, he had missing teeth and ragged clothes and his name was Mr Wei.

I assumed he would be angry at the incursion of industry into his domain. In fact, not a grumble.

His little plot was about to be swallowed up, but they will give him a place further out of town. He had been a peasant all his life, apart from three years in the army, and he has been moved before. His old place was nearer the town than this one.

Mr Wei, it seems, migrates in the opposite direction to everybody else. He is pushed further out into the country, so the town can accommodate the country dwellers.

New economy
You can drive down spanking new motorways, and speed past a traditional road sweeper

We had unwittingly found ourselves on the border between old China and new. Where agrarian China meets industrial, where the slow life meets the fast and where buffalo meet bulldozers.

Mr Wei, as it happened, seemed content to know his next move will be his last because in two years he will get his pension, nine pounds a month.

What a contrast to the life, led by some, in town.

We met a middle class family in central Leshan, for example. Both parents working at a semi-conductor plant, which is partly American owned.

The couple only had one child, that is all you are allowed, and they lived in a comfortable, spotless flat with a DVD player and a moped to get round.

Chinese banknotes
The cheap yuan and increasing exports are helping to drive growth

What else did they need, I asked? A car and some travel.

It is where the old economy of Mr Wei, and the new economy of the urban middle class intersect, that you find China's most curious sights.

You can drive down spanking new motorways, and speed past a traditional road sweeper gently brushing the dust away on the hard shoulder, armed with an old-style broom of tied sticks.

But if China's rapid development leaves odd traces of old and new side-by-side, its urban development generally appears more organised and tidier than in many other countries.

Absent are the sprawling shanty towns that grow on the edge of Latin American cities.

Long process

In China, it sometimes looks as though the economic planners of yore, have re-trained as town planners. Singapore, I was told more than once, is the model local authorities want to follow.

There are still 200 million Chinese living on a dollar a day

China might just get there, after all, average incomes have tripled in the last 20 years.

But keeping urban development tidy has a cost.

China suppresses the flow of migrants from country to town. Those who do drift to big cities for work, get fewer rights and lower wages than their indigenous city counterparts.

It means there is a mass of folk waiting in the countryside for development to reach them. On the latest figures, there are still 200 million Chinese living on a dollar a day, the World Bank standard of poverty.

China is on a long road to development.

At the end of it, there will be something more attractive than a building site, but the bulldozers have a long way to go to carve out that road.

From Our Own Correspondent was broadcast on Saturday, 19 February, 2005, at 1130 GMT on BBC Radio 4. Please check the programme schedules for World Service transmission times.



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