The World’s Factory Meets India’s Silicon Valley

In Aerotropolis, I stress how the advent of aerotropoli in western China around cities such as Chongqing and Chengdu (both of which are larger than any city in the United States) will instantly connect tens of millions of people to the global economy. And more than that, they will enable China’s economy to continue evolving on the coast, while low-cost manufacturing migrates to less expensive cities inland. You can already see that in Chengdu and Chongqing, where Intel, HP and Foxconn (the Taiwanese manufacturer of Apple products) are all running or busy building factories. Five years from now, your next iPhone may very well be made in Chongqing.

But all of that depends on strong air service beyond China, and not just gigantic empty airports. There are signs of this happening, too, the latest being Air China’s announcement it will start direct flights in February between Chengdu and Bangalore—the Silicon Valley of India. In the short run, these flights will probably be filled with engineers working for HP, Intel and Cisco in India commuting to Chinese factories churning out devices on behalf of their employers. But in the long run, this represents one of the first tie-ups of perhaps the greatest threat to America’s high-tech dominance: highly-skilled Indian entrepreneurs and low-cost Chinese factories working in tandem to undercut and out-think the American brands which outsourced their expertise a long time ago.