China went overdrive on priority sectors such as
roads, railways, township development both in urban & rural areas. Her
industrial base was basically in a narrower land mass. This resulted in “banana
conundrum” which can be solved only by Germany. Howzat?
Unmistakeably, China was correct in developing
public goods for the benefit of the fast increasing urban and rural population.
Not only that, the industrial development in its entirety got China trapped into a “geoeconomics
banana” where bulk of her economic growth is located in a banana
shaped geographical form connecting North-East to South- West shore of the
China Sea. Guangdong Province with Shenzhen, Guangzhou and Dongguan &
Foshan in the Pearl River Delta along with Shanghai, Suzhou, Hangzhou and Ningbo
in Yangtze River Delta shaping into an image of a banana. Hence, the “banana
conundrum”.
On the other hand, Germany went on to develop high–skilled engineering and
techno products. Unlike China her development covered diverse areas.
Regional spread of German industrialization
1. The Rhine-Ruhr Area: North Rhine-Westphalia along the Rhine and Ruhr rivers, known for coal mining, steel production, assisted by natural resources availability along with transportation network
2. Saxony is next in importance with plenty of high-skilled labour in abundance specializing in textiles, precision engineering and mechanical works with well-known cities such as Chemnitz, Dresden and, Leipzig
3. Berlin is not only the capital of FRG but also an industrial centre for electrical engineering and home to Siemens and AEG
4. Württemberg in the South-West known for highly skilled & highly specialized manufacturing and automobile industry with famous brands Daimler and Benz.
Germany helping China
Obviously, Germany is in an excellent position to help China diversify its development programs not only from rural to urban but spread across the Chinese landmass. Post war Germany has done this extremely well. Hence, Germany is more than welcome in China to undertake the geoeconomics necessity for China to escape from the banana conundrum. China business is targeted for mass production and not for prestige products. Of course, volume drives in profit. Yet China phasing out of consumer durables to luxury goods, vehicles and other paraphernalia would be a wiser move. This is where German efficiency excels and much required by China.
My synthesis
A kind of give and take has to be brought in. This
is more pertinent in techno sector. More partnership deals must be struck between Germany and China in
quantum computing, cloud computing, AI, space research and many other novel
areas along with joint production of well-known German brands.
The heart of the matter is, trade & investment
facilitation must be given priority status and Germany should come out with
innovative programs of connecting China’s vast areas both in her northern and
western parts of the industrial belt, and more importantly to help China escape from her banana
conundrum.
Hence, navigating strategy amid geoeconomics forces
German hands to bind with the Chinese ones for mutual benefit!
Cheers!
Muthu Ashraff
Strategy Adviser
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Strategy Adviser
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