China is becoming the next dust belt?

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I was quite surprised to see a blog post on Forbes recently about how China is in decline of its industrial momentum and how China is going to become the next rust belt. I think I have been surrounded by too many development stories of China that I have overlooked the possible downfall of this giant in various ways.

The article listed several contributors to China’s loosing edge in its competitiveness. The first one is the outcry for environmental improvements within the country. This is actually a great point on. There are indeed increasing number of protests against establishments of possible environmental and health issues going on in the country, especially during the recent years. For example, just last year in my hometown Dalian, there was a protest of thousands of people against the investment of FX into the city, a would be chemical factory that could potentially threaten the health of local residents. Of course, coverage of this protest in blocked in China, but here is a picture from Reuters showing you the magnitude of this protest.

Photo Credit: Reuters

Photo Credit: Reuters

Thinking such protests are a factor for China’s decreasing competitiveness has to take the word competitiveness very literally in a pure short-term money sense. Chinese residents protest against building of factories that have toxic effects thus hinder such establishments. However, it was these toxic factories producing massive amount of products that gave China the advantage of becoming the manufacturing center of the world. Building fewer such plants would decrease the making of products that have long fueled China’s strong exports, thus eroding its edge. However, I do think these outcry and movements certainly help China’s economic gross in the long run, and it might not get as bad as making China the next dust belt. I certainly hope not.

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