China’s Greatest Threat to Development Lies Within.

4 Mar

Despite China’s prosperous growth over the past three decades many onlookers suggest they still have many boundaries to overcome. Some place emphasis on their role in global politics and governance as a key threat to their future success, however I will explore the threats that reside within China’s own borders, and how these could be the most important factors to their continued success. Moving forward Anka Lee suggests that, “the build up of internal pressure, coupled with the inability of developed economies to sustain China’s export-oriented economy, means that efforts to rebalance-internally and, in the process, externally- must take place.” (2013)

As a result of the economic downturn in the west China’s own economy began to suffer because of its export-led foundations. Zheng Xinli explains that what became apparent because of this was that, “fiscal reform (will be) the main force to shift the investment oriented growth pattern into a consumption-driven one.” (Chen, 2014) Reform to the economic system is imperative in China to move away from its outwards dependency and rather utilise its mass population to create a consumer driven economy. These reforms are hugely important to continued success, because its external dependency allows actions throughout the world to destabilise itself, Bijian (2005) outlines why it is even worse for China to face any issues, “(as) China has a population of 1.3 billion. Any small difficulty in its economic or social development, spread over this vast group, could become a huge problem.” The gravity of the situation is felt by China’s leaders and has seen them adopt policies to allow for transition in the economy, Li Keqiang explains how they will, “adjust the economic structure (to) help enhance sustainability of growth, accelerate the shift from a policy driven economy to a domestically oriented one, and prevent wild economic fluctuations.” (2012)

Thus, motivating the large population and modernising the country are implicit to creating the consumer-led economy that is so vital to ensuring long term prosperity. This is already being pursued, “about 10 million Chinese migrate to urban areas each year in an orderly and protected way, they provide Chinese cities with new productivity and new markets and help end the backwardness of rural areas.” (Bijian, 2005) This move is important as related statistics show that urban residents spent 3.6 times more than rural dwellers in 2010 (Keqiang, 2012) displaying why urbanisation is implicit to overcoming future economic threats through the creation of a large consumer base. They still have a long way to go, with such a large population it makes development of this type of economy that much more difficult, in 2010 China’s consumption ratio was 47.4% whilst the US was 87.7%, the EU was 80.7% and Japan was at 78.6%, these are the figures China needs to push for to remove that dependency on foreign consumers.

On top of this need to modernise the population comes the sustainability threat it creates through doing this. As modernisation and development takes place and more move into large cities, environmental issues present themselves which also could hinder the future success of China, “China has paid a heavy environmental price for three decades of economic growth.” (Bloomberg, 2013) Firstly, “the scarcity of natural resources available to support such a huge population, especially energy, raw materials and water-is increasingly an obstacle.” (Bijian, 2005) This over time threatens the ability to continue the level of development they are currently working at, however on top of this is the environmental degradation aspect that is associated with their current development path. “In Beijing, air pollution levels (have) rose to 20 times the recommended limit by the WHO…over a million Chinese citizens die of air pollution per year.” (Klabin, 2013) These extraordinary numbers display the harmful nature that is attached to the unsustainable mechanics of China’s development, more environmentally sound methods need to be pursued alongside rapid development if the country is to not find instability created through its methods of progression.

This potential instability sources with the large population who’re becoming angered over pollution and who will become antagonised should economic prosperity falter, presenting another point of how Chinese success hinges on satisfying the citizens, primarily so they do not become disenchanted with the government; the CCP’s largest fear. What is happening is that the opening up of China’s economy has allowed for other ideas to filter through the censorship and as a consequence more people are outspoken about issues they find with the system and the government. “Between 2006 and 2010 the number of mass incidents doubled to at least 180,000…increased use of mobile phones and the internet has allowed protesters to show their anger more effectively.” (Bloomberg, 2013) This displays how modernisation and development may in fact also be causing negative effects to the durability of the current system despite them having created mass economic growth and wealth uplift. This may present a huge issue to stability with the government in the future potentially having to manage serious governmental reforms in light of further citizen mobilisation and awareness.

The final internal issue i’m going to discuss is with regard to the ageing population of China. “At the end of 2011, when the total Chinese population reached 1.34 billion, 13.7% of the population were 60 or over, that’s 185 million people…the UN considers a population to be ageing when 7% of its population is aged 65 or over.” (BBC, 2012) Although a portrayal of how successful development is allowing people to live longer because of better living standards and access to health care there are economic and social consequences of such age. As a developing country China may not be able to take the burden this brings with it, “a huge fiscal deficit due to soaring pension expenses and increased medical costs.” (BBC,2012) On top of this the labour force is affected, and this is key to continued economic growth thus the ageing population also has the potential to hinder economic sustainability. Professor Cai Fang “estimates that the rapid decrease of labour force will lower China’s annual growth rate by 1.5% points from 2012 to 2015, and decrease a further percentage point during the period from 2016-2020.” (BBC, 2012) This shows the huge ramifications the likes of the one child policy and modernisation, which can trigger families into having less children, may have caused for the country and its future stability and success.

China and its government have a long task ahead of them to achieve developed country status and many hurdles stand in its way of getting there. It will take long term policy making and a sustainability focus to all policies that will allow them to hopefully continue their success however it will be a tumultuous journey that is far from ease.

References

BBC News. (2012) Ageing China: Changes and Challenges. BBC. Available at: <http://www.bbc.co.uk/news/world-asia-19630110>

Bijian, Zheng. (2005) China’s “Peaceful Rise” to Great-Power Status. Foreign Affairs. Available at: <http://www.foreignaffairs.com/articles/61015/zheng-bijian/chinas-peaceful-rise-to-great-power-status> [Accessed 24th February 2014]

Bloomberg News. (2013) Chinese Anger Over Pollution Becomes Main Cause of Social Unrest. Bloomberg. Available at: <http://www.bloomberg.com/news/2013-03-06/pollution-passes-land-grievances-as-main-spark-of-china-protests.html> [Accessed 24th February 2014]

Haass, Richard N. (2011) China’s Greatest Threat Is Internal. Council on Foreign Relations. Available at: <http://www.cfr.org/china/chinas-greatest-threat-internal/p26930> [Accessed 24th February 2014]

Keqiang, Li. (2012) China Deepens Strategy of Domestic Demand Expansion in the Course of Reform and Opening Up. China.org.cn Available at: <http://www.china.org.cn/china/2012-03/04/content_24801231.htm> [Accessed 24th February 2014]

Klabin, Roy. (2013) The Biggest Risk to the Environment? China’s Population. PolicyMic. Available at: <http://www.policymic.com/articles/53181/the-biggest-risk-to-the-environment-china-s-population> [Accessed 24th February 2014]

Lee, Anka. (2013) Taking a Different View on China’s Rise. Truman National Security Project. Available at: <http://trumanproject.org/in-the-news/the-diplomat-taking-a-different-view-on-chinas-rise/> [Accessed 24th February 2014]

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