[LINK] "China's new boom towns"

[rfmcdonald]

Interesting, this. The rise of these second-tier metropoli says something as to the extent to which China's economic boom is dispersed. The author spends most time examining Hangzhou, a small city in Zhejiang that's home to only 6.5 million people.

In China, the boom that has spawned the well-known mega-cities of Shanghai, Beijing, Guangzhou and Shenzhen is on the move. As the world’s second-largest economy enters its next phase of growth, the nation’s so-called second-tier cities are expected to do the bulk of the heavy lifting.

Dubbed the “Long Tail” of the Chinese dragon, these mushrooming metropolises pack astounding heft. While a new skyscraper seems to bloom in Shanghai every other month, scores of other towers are popping up just as fast in places most Westerners never consider. Including Hong Kong and Taiwan, there are already 60 Chinese cities with populations greater than one million. By 2025, according to consulting firm McKinsey & Co., there will be more than 220 cities with more than a million people each.

In North America, investors worry about the possibility that Chinese growth might slow, bringing with it lower demand for commodities and other goods, but boom towns like Shijiazhuang, Baotou and Zibo provide evidence that a vast reservoir of opportunity remains to be tapped. These second- and third-tier cities will drive demand for raw materials from commodity-rich countries like Canada as China’s expanding municipalities erect new buildings and build more bridges and railways.

Global retailers are already rushing to capitalize on the new affluence on display in China’s emerging urban centres. It was, after all, the consumption habits of residents in scores of second- and third-tier cities with names like Kunming and Chongqing that pushed China to become the world’s largest auto market this year.

With growing prosperity, though, comes anxieties about the corrosive effect of disparities in wealth. The runaway real estate markets that have elicited so much hand-wringing from Chinese government officials are not confined to Shanghai and Beijing. Potential real estate price bubbles are also forming in much smaller, lesser-known locales.