A Perfect Example of Conserving Space

http://activequote.fidelity.com/rtrnews/research_frameset.phtml?page=market_news_main.phtml?intro_page=individual_news_story.phtml%3Fstory=NEWS.CBSMW.1F1D4EB8F66B4EAEACC7.0035EBFDA1B0%2526pt=News%20Story%2526parentTitle=Market%20News%2526parentURL=market_news_main.phtml%2526product=ROR/256&provider=CBSMW

It may be difficult to navigate to the above Reuters story, since these stories scroll into oblivion so quickly, but here’s a quote from the beginning of the article:

“BEIJING (Reuters) – Shifting China’s model of urbanization to favor huge supercities could boost per capita output, improve energy efficiency and help contain the loss of arable land, the McKinsey Global Institute (MGI) said on Monday.

Rapid urbanization has been a major driver of Chinese growth over the past two decades and will become more so over the next 20 years; cities will account for 95 percent of China’s gross domestic product by 2025, up from 75 percent today, MGI said.

But the institute, the economics research arm of consultants McKinsey & Co, said in a report that China could reap even greater economic benefits by adopting a more concentrated pattern of urban growth.

By enforcing land acquisition rules more strictly and by tweaking incentives for local officials, national policy makers could nurture 15 supercities with average populations of 25 million people, the report said.

Alternatively, planners could develop 11 clusters of cities with combined populations of more than 60 million people.

China currently only has two cities of more than 10 million people, Beijing and Shanghai.”

This is a perfect example of the whole premise of the theory I’ve proposed in Five Short Blasts. Of course, China has no choice but to pursue development that will improve efficient use of the land. And note the focus on the improvement of per capita output. But, as is always the case, there’s no recognition of what this will do to per capita consumption. It will decline because crowding people together into smaller spaces makes it impossible for them to own products which require a lot of space to use and store. Their homes will be smaller, reducing the consumption of materials used in their production. They’ll own fewer and smaller cars. They’ll own less of everything that takes up space in their tiny homes.

They’ll be ever more dependent on exports to sustain their bloated labor force and population. And they’ve found a partner with the U.S., ready and willing to relieve them of their unemployment and poverty, importing their unemployment and poverty and transferring U.S. wealth to China, selling off more American assets to finance it.

You have to wonder what it will take to wake this country up.

Pete

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