I'm back! I know, you've been missing me, so you can blame my job (I certainly do!). But I'm back now, with an intriguing new thought: manifest destiny. Could it happen in China?
The Chinese government really wants to develop the western interior of China, and justifiably so. However, they have had remarkably poor results. I was reading about "Lanzhou New City" recently and I was struck by the difference between China's difficulty to move westward and that of the United States. So what is really hampering China's western development and how could China learn from where America has already trod?
Well, first let's examine our similarities and differences. Ignoring the obvious differences like time period and macro-geography, there are some remarkable similarities. At the commencement of westward development, both nations lacked infrastructure, including even simple roads for basic mobility. Both nations are strongly encouraging westward development from a government level. Both have remarkably similar geographical challenges (more on this later). Both have natural resources of immense economic value laying beneath its western lands.
So let's look at each of these similarities to see how they worked for America and what they might mean for China.
1. Lack of infrastructure
You played Oregon Trail. I don't need to remind you about the complete lack of infrastructure circa 1849 in the American west. The railroad came later as demand for goods in the west grew. But yet, people got there, stayed there and built cities there. Obviously, this would have been much easier with roads, but you need people to build roads. This isn't exactly a Build It They Will Come kind of thing. People have to be there first, then we'll build the roads. So why does it seem to be such a substantial struggle for China? Probably because China is trying to run before it walks.
China is trying to develop western cities as manufacturing cities which will then need to transport their goods back to the rest of the population, which will obviously need roads or railroads to do so. But there's also the issue that China's undeveloped regions are so much further behind China's developed regions than America's undeveloped regions were behind its developed regions. While America's west was wilderness, its cities weren't as modernized as they are today. Lacking electricity, private vehicles and often running water, development was easier to establish in a new location with factory machinery, for example, being run by horses, water mills or simply manual operation (think: weaving looms). But now let's look at China. Western China isn't all that different from the American west: vast, primarily unpopulated and almost devoid of technology. Many villages and towns still don't have electricity. But developed Chinese cities have all the modern accoutrements: electricity (of course), wifi, cell phones (even 3G), state-of-the-art medical facilities, personal vehicles (even Hummers, believe it or not) and all the other features of modern life. So this gap between developed and undeveloped is huge, perhaps insurmountable. To establish even basic factories, some cities will have to get hooked up to the electrical grid. It could be hundred of miles to the nearest electrified city, so they'll need to build their own power plants (or maybe even wind farms?!). Then build better roads to get these goods to market. But they'll need communication methods to attach to their eastern offices (or, at least, eastern customers, investors or brains). Talk about a huge start-up cost.
2. Government support
This doesn't require much discussion. Both the US and China actively encouraged westward expansion through incentivizing private development (Sooners and Boomer, for example) and public development (China's "Lanzhou New City").
3. Geographic challenges
Many Chinese love to argue the reason western cities have struggled to develop are based on purely geographic reasons. For example, Lanzhou (the old, original one, not the one the government is building from scratch) is nestled in a mountain valley, trimmed in neatly by the Qilian Range to the north and south, at a bend in the Yellow River (yes, that Yellow River). While this certainly makes it difficult to expand, it hasn't struggled in the past to be the gatekeeper of the river and a railway hub. After all, Denver has similar geographic challenges and nothing has stopped them from expanding. Neither has it hampered Santa Fe and Albuquerque, Amsterdam (built below sea level) or Chicago (built on sandy shale beds that they said could never support the weight of skyscrapers). With a little know-how and desire, this shouldn't be a show-stopper.
4. Natural resources
And now for my favorite part. Gold. Both of these nations have a really, really good reason to go develop these lands. America's was gold (and the simple desire to conquer all that moves); China's is natural gas. I wrote a few months ago about China's future in natural gas. If you missed it, you should go read it here. Long story short, there's a huge supply (and demand) if only they can be correctly tapped. So there's unquestionable wealth to be made if only someone will go get it. But here's the reason there hasn't been a 'gas rush' to rival the American Gold Rush: fracking is expensive. Unlike gold which could be panned by anyone with plenty of spare time and a pan, fracking requires millions of dollars of equipment and high-tech education. This is a different kind of prospector, a wealthy one, not a desperate one, and wealthy prospectors are not as likely to pursue risky investments as desperate ones on their last leg.
So what does this mean for China's Gas Rush (I'm going to make this a thing, just you watch)? China needs to find a way to further incentivize fracking. Private investors aren't jumping on this bandwagon just yet, likely because it's still so expensive and risky, but great development typically rides on the shoulders of private investors (aka prospectors). With that in mind, the government needs to find a way to help offset the risks so prospecting can thrive, naturally providing an ideal opportunity for cities to grow, infrastructure to develop and technology to enter.
I've examined a number of similarities and, in the process, differences. So what we are left with is a slew of questions.
How will the Chinese government go about incentivizing private investment?
Will Chinese (or foreign) investors ever consider the west worth the risk?
Will China be able to overcome the dramatic wealth disparity between the 东南沿海 (southeastern shore) region and the interior?
Can China continue to grow and develop as a world economic leader without sucessfully developing the west?
Only time (and some carefully planned economic and social policies) will tell, but I think we can be fairly certain there won't be any prairie schooners in this particular story of western expansion.
