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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (36527)	7/25/2003 9:48:04 PM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hi EP, <<I would expect China to have hard time getting the interior to match the prosperity of the coast>> ... ... not complete equalization, but bit by bit, slowly but surely, remove tax incentives on the coast, increase tax incentives in the interior, build canals, highways, railroads, pipelines, airports, better schools, ... and ... oh, do all that governments can do. Above are parts of an articulated plan and, while it did not result from democratic mob vote casting, it, in broad outlines, have general support of the coastal folks. Chugs, Jay

To: energyplay who wrote (36527)	7/25/2003 10:19:00 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

Hi EP, I would expect China to have hard time getting the interior to match the prosperity of the coast. To a very limited extent, I agree with you. The costs of transporting any manufactured or assembled item from the interior to the export locations would add significantly to the overall cost(s) of the exported item(s), thusly making Chinese exports more expensive. However, I don't think that the Chinese (or any other exporting country for that matter) are stupid. They'll simply manufacture or assemble exported items quite close to the port cities. Interior locations will eventually be developed for domestic consumption of those same items. With lower overall costs (not having to pay for transporting items all over China), Chinese goods manufactured for domestic consumption will have a price advantage over items imported from foreign countries, where the costs of transportation will simply be tacked onto the overall cost of the item. Which then brings us to the final phase, which will be foreign corporations investing in the Chinese interior regions for sale of domestic consumption items. By manufacturing their goods within China, the costs of transporting will be competitive with Chinese domestic manufacturers. KJC