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No 'business as usual' after crisis

2009-06-15 15:58 BJT

Special Report: Global Financial Crisis |

Emerging from the long, dark tunnel of an economic crisis is always worthy of hearty applause.

But don't clap too soon. Entering a new recovery cycle may itself bring challenges that economic officials in this nation have never before encountered.

If managed poorly, there could be a "civil war" between the central and regional governments, especially those in the coastal and adjacent areas - a battle of conflicting development priorities and strategies. It is crucial that the visible hand of Beijing carefully guide local interests so they meet the interests of sustainable development.

The coastal region took a major beating from the global financial crisis that resulted in a loss of overseas orders and manufacturing jobs. Now that the recovery is coming along, local officials may imagine it could be easy return to the old track of picking up more global buyers and running local machines for longer hours.

That is a kind of prosperity led primarily by the manufacturing industry, namely factory jobs and factory wages.

But in reality, in post-crisis times, China must begin to follow a completely new model in which its relatively wealthy coastal cities no longer depend single-mindedly on manufacturing for their prosperity.

This inevitable change of course is required by both the limitations in market demand and how much China can ultimately supply - and the need for a kind of economic growth based on much less energy use and resources than is possible in traditional manufacturing and construction.

Many of the environmental hazards that exist in this country were caused by the blind chase of manufacturing profits, damage caused by various forms of waste discharge.

Manufacturing-led urban growth is unsustainable. Further travel along on that road is like driving toward a cliff in top gear.

But right now, people may be seeing potentially very dangerous signs. After a few cities won Beijing's approval to drastically expand their urban land, more cities may be hoping to join in and have more to offer future manufacturers and land developers.