The China Card (Part 2)

Why has China grown so rapidly?

There are lots of low-wage countries. In the ‘90s the “Asian Tigers” of Singapore, South Korea, Taiwan, and Hong Kong specialized in finance or high-tech manufacturing and developed rapidly. Now they are fixtures in the global economy, hosting some world-class businesses.

China has become a manufacturing powerhouse not simply via low labor costs, but from its solid logistical performance. Companies only put facilities in places where they can be productive, and to be productive they need adequate infrastructure, efficient services, consistent border procedures, and reliable delivery performance. China has created manufacturing clusters in its coastal regions with eye towards these factors.

Other low-wage countries would have to put decades of effort and pour billions of dollars into their trade infrastructure to put even a minor dent into China’s trade advantage. So as world trade has grown, China has been able to leverage this.

China’s extraordinary growth has been a natural result of its focus on logistics. Its market pullback has come not from external competition, but from internal factors.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2013-05-23T11:04:56+00:00 May 23rd, 2013|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
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