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Report From China

Welcome to Report from China. Follow this blog through March 22, as IBJ Managing Editor Greg Andrews explores the world's second-largest economy with a group of IU professors, Hoosier entrepreneurs and journalists.

International Business

Heading to China, where big cities are getting bigger

March 11, 2011

People always say Indianapolis seems like a small town. I suspect that when my trip to China wraps up on March 19, I’ll have a new appreciation for how true that is.

I’m heading on Friday to southeast China as part of a contingent of Indiana University faculty, business executives and journalists (more on the trip in later posts). We’ll be visiting Indianapolis’ sister city of Hangzhou (population 7 million) as well as Shanghai (19 million).

China, of course, is the world’s biggest country—its population of 1.3 billion is roughly four times that of the United States. Sheer size helps explain why China might surpass the United States as the world’s largest economy in the 2020s. Just recently, it passed Japan to move into the No. 2 spot.

In measures of wealth, however, China isn’t nipping at our heels yet. Per-capita gross domestic product in the United States is about $47,000—more than 10 times that of China. The gap is narrowing, but by 2015 U.S. GDP per capita still will be more than seven times China’s, the International Monetary Fund estimates.

But China certainly has the bragging rights for big cities. The population of China’s 10 largest cities alone equates to roughly one-third of the U.S. population.

“Particularly for Chinese visitors who stay here for a while, being in the Midwest can feel sort of lonely because when they are walking down the streets there are few people around,” said Mohan Tatikonda, a faculty member at the Kelley School of Business in Indianapolis who is going on the trip. “They are so accustomed to abundant humanity all around them wherever they may be.”

On a previous trip to China, Tatikonda visited Wuxi, which doesn’t even show up as a major city on Chinese maps but has a population of about 5 million—three times the number of people living in the Indianapolis area.

Wuxi and other big cities in China are growing at rates unheard of in the United States—thanks to the developing country’s rapid economic growth, which has led to mass migration from the countryside.

By 2025, China likely will have 219 cities with more than one million residents and 24 with more than 5 million, according to a 2009 report from McKinsey & Co., a New York-based consulting firm.

 

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