The Development in China's Heartland

Robert Hsu, May 12, 2009

It's not hard to understand the role that exports have played in the Chinese economy over the years. Just go to a local department store -- I'm sure you'll find a variety of products with "Made in China" stickers.

But after the financial crisis and economic slowdown hit economies around the world, Chinese exports quickly took the back burner as China's leading driver of economic growth. That's because Americans and Europeans are consuming less, leading to dramatically slower demand for Chinese products.

To counter the slowdown in exports, China has turned inward to boost economic growth, rather than outward. In fact, China is shifting its focus from its coastal export centers to the country's heartland.

Much like the American Midwest, central China has lagged behind the affluent coastal cities in economic growth, especially since world demand for Chinese products helped these coastal cities flourish in past years. But now, things are changing, as there's a renewed focus on the economic potential in China's heartland.

This is a trend that will have a big impact on China's economy as a whole, and will ultimately create investment opportunities for China investors.

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