China announced plans to double the size of the economy by 2035. The Asean leader is expected to overtake the US as the largest economy in the world by 2028. Even then it would struggle to break into the top 50 in terms of GDP per capita. The potential for continued growth remains huge.
Infrastructure will play a great part in the plans. The high speed rail network will be expanded to 70,000 kilometers. The overall rail framework is expected to cover some 200,000 kilometers by the end of 2035. 163 new airports will be added to the airline network bringing the total to 400. The network of highways and expressways will increase too 460,000 km. The inland water way system will increase to 25,000 km.
Technology will feature in the expansion. Support for smart and autonomous vehicles, development of a home grown global navigation system, research into magnetic levitation train systems and vacuum train transit, will feature. The country will put semi conductors, including integrated circuits and advanced chips, at the center of R&D priorities.
This week, the Biden administration confirmed the US is to introduce sweeping rules to limit the expansion of Chinese technology companies. The new rules will enable the State Commerce department to ban technology-related business transactions, that it determines pose a national security threat. This is part of an effort to secure U.S. supply chains. Companies in technology, telecommunications, finance and other industries say the rule could stifle innovation and hurt competitiveness. Business leaders are nervous about the plans.
The President is worried about the chip crisis. The plan is to sign an executive order, reviewing supply chains for critical materials, including semiconductors, pharmaceuticals and rare-earth minerals. The report will confirm, US semiconductor manufacturers have outsourced production to Samsung and Taiwan Semi Conductor Manufacturing. Taiwan and Korea feature in the supply chain. China has 95% of the world supply of rare earth minerals.
Biden may solve the chip crisis ... Johnson will supply the fish ... tariffs on imports will not help ... free markets are best at resolving a supply crisis ...
That's all for this week ... stay safe ... J
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for updates on the UK and World Economy.
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