The Great Leap Forward - impact on the north by 2020

December 23, 2012

From 1958 to early 1962, Mao Zedong led China through “The Great Leap Forward,” a period of intense industrialization and agricultural communalization. During the period an estimated 45 million Chinese people starved to death. Flash forward 50 years and the transformation of the basket-case Chinese economy has been astounding.

• This year was the first time in eight years China had experienced economic growth below 8 percent. China’s growth rate was about 7.5% this year. Meanwhile, the top economic forecaster in the US predicts 1.5% growth for the US in 2013, although the National Association for Business Economics predicts 2.3% in 2013.
• China’s economy has surpassed that of Japan to become the second largest in the world with a GDP of about $5 trillion.  In the next 10-15 years China’s GDP will exceed that of the United States. 
• China accounts for essentially all of the world’s increased demand for iron ore since year 2000.
• By 2020 China’s gross domestic product is expected to reach 100 trillion yuan in 2020, equivalent to $16 to 20 trillion, Yang Weimin, vice-head of the Office of the Central Leading Group on Finance and Economic Affairs.
• By 2020, the country will double its 2010 GDP and per-capita income for both urban and rural residents, according to past President Hu Jintao. By 2020, the per capita income will be over $10,000. Today the American per capita GDP is 10 times larger than China’s GDP. In a decade, it will be only 5 times as large.
• China is now testing bullet-trains on the line from Beijing to southern Chinese city of Guangzhou that can run at an average speed of 300 kilometers per hour. It will shorten the rail travel time from the capital to the Pearl River Delta to about eight hours from the previous 24 hours. The high speed rail will also extend to Hong Kong in the next few years.

China has become an economic juggernaut, the workshop of the world, commanding about 40% of the world’s prime commodities. The absolute horror of starvation, poverty and devastation caused by the Great Leap Forward has been washed away by increased affluence of the new generation. The migration of rural Chinese peasants to the prosperity of the cities continues. A rising sea lifts all boats.

Commentary

The northern part of North America can expect China’s continued growth to drive resource projects. China’s growth will manifest itself in these ways:

• Development of base metal mines: In Yukon the Selwyn zinc project, in NWT the Prairie Creek zinc mine, and in Nunavut the Izok zinc-copper mine.
• There are several copper deposits that could be developed: in the Yukon Casino and Carmacks; in BC Red Chris; in Alaska Upper Kobuk.
• Development of rare earth deposits in NWT (Nechalacho) and perhaps Quebec (Strange Lake).
• Billions of dollars of investment by Chinese state-owned enterprises in resource development in the north. Investments in the oil sands.
• Consumption varies with per capita income. With China’s per capital GDP slated to double in a decade, the consumption of raw materials should stay strong. For example, China’s demand for uranium will increase as the number of reactors in service rises from 15 now. There are 26 new nuclear power reactors under construction that are expected to be operational by 2015. This will bode well for the Saskatchewan uranium industry. Also projects in Nunavut and Greenland may more towards development.
• The Mactung tungsten deposit will very likely become a mine. It is located on the Yukon-NWT border in the Mac Pass.
• Potential market for hydrocarbon exports - LNG from BC or Alaska; bitumen from Alberta (if such exports can find a pipeline route)

Sources

• a)http://www.questia.com/library/1G1-160281467/trudeau-s-great-leap-a-new-translation-of-his-chinese



• b)http://www.bloomberg.com/news/2012-12-23/china-holds-test-run-on-world-s-longest-high-speed-rail-line.html



• c)http://www.chinadaily.com.cn/business/2012-11/29/content_15970070.htm and http://www.chinadaily.com.cn/business/2012-11/10/content_15910020.htm



• d)Frank Dikotter, Mao's Great Famine, New York:Walker and Company, 2010.



• e)http://www.visualcapitalist.com/portfolio/iron-the-core-of-the-developing-world