Years of economic reform ranged in the political relaxation of foreign direct investments to the promotion of entrepreneurship, China has emerged among the world’s top economies. As such, Beijing Olympics 2008 works as a new chapter milestone that signifies the start of China’s third wave of economic growth – Industrial consolidation.

As a result, it’s a good time to examine the way the Chinese cities have developed according to the traditional tiered city system. If you highlight all of the first and second tiered cities in China, you will understand the way the Chinese government intends to develop China in to the world’s largest economy.

In the 1980s, rather than opening up the entire of China, China, as part of an economic risk reduction strategy chose to develop special economic zones and open cities close to the coast for foreign investments. Coastal cities aid imports and exports. Additionally, agglomerating the “test” cities can be cultivated economies of scale relating to transportation infrastructure. Furthermore, resources from western China were drawn and consolidated to support these strategically positioned coastal cities prominently for Beijing within the north, Shanghai in the midst, and Guangzhou within the south, with Shenzhen serving as a gateway from Hong Kong.

As a result of shorter and improved transportation and communication infrastructure, economic development proliferates towards the nearby cities, gradually moving westwards into China. Concurrently, the Chinese government also developed pockets of economic drivers particularly in different provincial capitals in order to timely introduce economic growth at different regions. As a result, cities begin their economic reform at different stages and therefore as time passes, this became known as the Chinese tiered city system with cities because of the connotation as first, second, third or fourth tier cities.

China tiered city system is characterized by the city’s population size with Shanghai topping the China’s city population chart at 20 million, then Beijing and Guangzhou with 17 million and 12 million respectively. These large cities, fuelled by own domestic demand and consumption provided the woking platform for improved living standards, better business and occupations and an international showcase towards the rest of the world. However, these cities now faced a population ceiling issue with stiff business competition which might reduce high exponential growth that was observed in yesteryear.

The 3rd wave will see more of the second tier cities in action. With over 20 cities within this category, China is placed to develop these cities because the backbone of China’s future economy. You should observe that China will not remain as a inexpensive sweat shop and is definitely set to move in the value chain, focusing its efforts on top end industries and also at the same time frame eliminating or pushing low-medium end industries into its lower tiered cities particularly with the second and third tier cities.

Already armed with a comparatively medium to high disposable incomes and an average GDP per capita of RMB30000, these second tiered cities give a lucrative option for firms to use blue ocean strategy on Chinese domestic markets. Due to the Chinese emphasis on “Mian Zi” or “face” as well as the insufficient variety for luxury and branded goods within their cities, the rich and affluent from lower tiered cities often make short trips to Beijing and Shanghai for their luxury shopping. Therefore, having your presence within the second tier cities can offer greater proximity and convenience for these target groups.

PriceWaterhouseCoopers (PwC) is definitely an international accountancy and management consultancy which has published a number of reports about how exactly the planet might look, economically, in 2050. They make interesting reading.

Based on their latest updates Britain and other civilized world may spend the following four decades within the slow lane from the global economy unless their businessmen can break into the fast-growing markets of Asia and Latin America. The consultancy group believes when the developed economies continue with over-reliance on customers in Europe and The united states they will gradually slide down the international economic league table between now and 2050. By then even the mighty US will have lost its crown as the world’s biggest economy, not only to China but can also get been surpassed by India. The UK will have slumped from 7th to 10th largest while Brazil will move from 9th to 4th. Mexico and Indonesia will all also provide claimed an area within the top ten.

Political leaders in the UK have led high-profile trade missions to Asia in recent years so that they can emulate the success Germany has had in entering the markets of the leading emerging economies. UK companies ought to take advantage of the fall in the worth of the pound to seize the opportunities provided by rapid industrialisation and increasing consumer spending power in India and china in particular. But John Hawksworth, PwC’s chief economist, says there is little change evidence they’re achieving success, even though the leading emerging economies have bounced back quickly in the deep downturn brought on by the collapse of western banks in the financial crisis of 2008 and are currently growing 3 or 4 times as fast as the US, Japan or the leading eurozone nations. The latest forecasts from the International Monetary Fund claim that China will grow by 10.5% this season, India by 9.7%, Brazil by 7.5% and Russia by 4.0% – the four economies combined take into account 7% of UK exports, just like for crisis-ridden Ireland.

Britain suffered its longest and deepest recession of the post-second world war era in 2009 and 2008, but continues to be ranked because the world’s sixth biggest economy. International comparisons between economies can either be made using market exchange rates or “purchase power parity”, which takes account of the relative buying power from the currency in its home market. Using either measure, China will be the biggest economy in the world by mid-century, the report says.

If we look beyond the aggregate numbers to check out what it might mean for individual people, it paints a very different picture. While using GDP data in the report and combining it with UN World Population Prospects 2008 edition, it is possible to calculate the acquisition Power Parity GDP per head of the main countries for 2010 and 2050. This changes how a top 20 economies look quiet dramatically. Australia, which wouldn’t feature within the top 10 by total economy size, is revealed as the second richest country, a position it manages to retain by 2050. The UK, which is the 4th richest per capita slips to 6th as the progress from the developing countries is less spectacular with China upgrading just one place from 18th to 17th although South Korea does jump from 10th to 4th.

The most spectacular changes occur within the spread of GDP per capita using the number of countries at half or less of the united states per capita number falling from 11 to 7 with Vietnam’s relative wealth per head jumping from 7 to 38% of the US level while China goes from 15 to 45%. This narrowing of the wealth spread does give some support to the indisputable fact that economic growth is good for everyone but somehow I suspect that we will see few of these projections arrived at pass.

The tendency for humans is to predict the future just as much the same as yesteryear but with growing or decline influences from predictable impacts e.g. large numbers of women entering the workforce. Thus PwC look at development in the labour force of working age, average education levels across the adult population, growth in the physical capital stock and total factor productivity growth, all virtually standard current economic levers. A lot of human behaviour (and therefore economies), is driven by what it perceived to be “normal”, so today’s paradigm of one’s intensive economies with country specialisation and free flows of international capital is probably the underlying thinking. What is regarded as “normal”, however, is more hard to predict; just a year after Roger Bannister achieved the “impossible” 4 minute mile, three men ran sub 4 minutes within the same race, before Milgram’s electric shock experiments he asked colleagues what percentage they thought would administer the “fatal” shock level and they predicted 1% when in fact two third went all-the-way.

Within the next 4 decades of idea of what are “normal” conditions is going to be challenged in the extreme. The current course of carbon emissions implies that we are well on our method to a 4 degree Celsius rise in average temperatures, an amount that Rachel Warren points out in a Royal Society paper “The role of interactions in a world implementing adaptation and mitigation methods to global warming,” means,