Intimations of China

A letter to a financial newsletter:

Jeffrey Ho writes:

I just completed a month-long, 2500-mile journey across western China. Signs of an economic boom are everywhere. While there are no Tier 1 or 2 cities in the west (only two western cities, Lanzhou and Urumqi, are considered Tier 3), even tiny cities of a million or less now sport brand new, modern train/bus stations and airports rivaling or surpassing America’s best.

A massive construction boom is evident all across the classic Silk Road. Small towns that have not seen a new building in 50 or 100 years are now being rebuilt with modern high-rise condominiums right alongside the old. What they do have in Gansu, Qinghai, and Xinjiang Provinces is space. Xinjiang, the westernmost province, is 3-times the size of France.

Gansu, once considered an impoverished backwater area that was largely desert is now a green hinterland as modern irrigation and farming techniques have tamed the waters of the Yellow River. To put it in perspective, Lanzhou, the capital of Gansu Province, is the geographic center of China. This means that as modern engineering and agricultural progress turn more of the desert into productive land, China is just beginning to realize their Manifest Destiny.

The ride on the high-speed train was almost boring. You couldn’t tell that you were barreling across the desert at 130mph except for the LED indicator inside the cabin. My fellow passengers were all seated in their assigned seats with no one laying in the aisles, no agricultural produce or live animals, and the only annoyance was perhaps the conductors incessantly making sure that overhead baggage were perfectly in place. If there is one sign that China has achieved their greatest aspiration to be a first world nation, this is it.

Freedom is virtually our only advantage.