Hefei: China's Silicon Valley?

The December 2007 issue of Prospect magazine has an article by Rob Gifford about Hefei. Almost unknown outside China, it aspires to be The Silicon Valley of China. Here's the first pargraph:

In the US, there are nine cities with more than 1m inhabitants. In China, there are 49. You can be travelling across China, arrive in a city that is twice the size of Houston, and think: I've never even heard of this place. That is how it is for many foreign visitors to Hefei (population 4.7m). I have been travelling to China as a journalist, or living here, for nearly 20 years and visited Hefei (pronounced Huh-fay) for the first time only last year for the book I have just written about the new China. There had never been any reason to come. But as in so many cities in China, the local government is trying to change that. After centuries of inland poverty, Hefei, like all Chinese cities, is opening up.

Gifford concludes his piece with some interesting comparisons betwen India and China:

In India, the cost of some restraint on the government is a slower growth rate. But at least independent trade unions are allowed in India, and some of them have teeth. India also has a free press, which can act as a watchdog on governmental bad behaviour. In China, the press is more free now on social and economic matters, but it can easily be muzzled by the government on any sensitive issue.

In the end though, there is one crucial difference between China and India, and a perfect example of it is coated in black tarmac and runs east and west through Hefei. China is a brutal place to live if you are on the bottom rung, but there is an exit. And, just as important, there is a real possibility of a job at the other end. India's 1.1bn population is rapidly catching up with China's 1.3bn.

But India has only about 10m manufacturing jobs, compared with about 150m in China. So there are simply more opportunities in China to improve your life. (And I haven't even mentioned India's restrictive caste system.) The growing service sector in India—in software development, in call centres and service centres—is great if you are already middle class and speak English. But what about possibilities for the hundreds of millions of illiterate peasants? It seems to me that India is trying to reach modernism without passing through the industrial revolution.

Now, as the cost of manufacturing rises in China, we are starting to see some manufacturing relocating to India. The country's retail sector is opening up too, and India is in the midst of other major economic changes. So in the near future, more opportunities of escape from rural poverty may be provided, in which case the balance will tip in India's favour.

I'm disappointed that one of the few Indians in central China does not want to have this conversation with me. So in the end, I have the conversation with myself over dinner, and I conclude that I do not want to be a Chinese peasant or an Indian peasant. But if I have to take a side, despite all the massive problems of rural China, I'll go for the sweet and sour pork over the chicken biryani.

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