When checking the blogosphere I found this blog that describes China’s move to become an urban nation at breakneck speed. While I knew that this was happening, it made me think about the effects that such a transition will have.
China is currently a nation based on exports, when most of the Chinese move into cities I believe they will go from a nation of exports to a nation who imports what they need because when people move into cities their consumption will go up. As China gets rid of its farmland and natural resources they will not be able to provide enough supplies to their cities and in turn they will have to import these supplies from other countries.
This sounds much like America’s transition from a country who used most of its natural resources to a country who imports more then it exports. America’s trade deficit is simply stunning and I wonder if China goes down the same path and creates trade deficit for itself, what country will capitalize on the opportunity. Will it be developing countries who have relaxed labor laws that can be exploited? will it be from USA who realizes that this would be a great way to create jobs and possibly help get rid of our debt?