on Dec 18th, 2009Risks On China Economic Growth
In 1976, Mao Zedong died and China’s isolation ended. Its next person in charge, Deng Xiaoping, opened China’s gates for external investments and companies that made the country an economic world power it is today.
Contrary to the communist principles that Mao fiercely opposed throughout his seat in control, Deng have turned the country from a backward agrarian economy into a capitalist system.
China is now the leading manufacturer and exporter of goods in the world market. Overseas businesses, mainly from the United States, outsource their labour force in China specifically because of the country’s low-cost labour.
Eversince the late 90’s, the transformation of China has become proof to its elaborate form of economy. A GDP growth of around 7-9 percent has been the recent forecast for the year 2009.
The Chinese people also have an inherent talent in doing business. In countries that have a considerable inhabitants of Chinese, a lot of them make their living via selling all kinds of consumer goods and most of their businesses are stories of success.
In spite of the optimistic views on China’s economic growth, a lot of finance experts still see heaps of obstacles that could languish the country’s growth or even break it.
There is a certain economic imbalance that still occurs in China. One of which is the inner-city and rural areas’ imbalanced development. Despite the improvement on the urban lifestyle, a lot of people in the rural areas still come across hardships particularly in the farming and housing communities.
Taking quite a few page from “The Great Leap Forward” where the chairman ordered farmers to become steel workers that resulted to China’s starvation. Today’s China, however, have learned from previous mistakes and is somewhat mindful to its food production but more improvements are necessary before it can attain perfect balance.
Another obstacle is China’s tense political and societal environment. So far, the ruling communists have been successful in suppressing dissent and opposition in its mainland and other places they claim to be theirs such as Tibet.
In order for China to maintain rule over the Tibetans is by building infrastructures, encouraging Chinese from the mainland to migrate, and crushing oppositions.
Other sections in China like the region of Xinjiang, where there is a large inhabitants of Muslim Uighurs, is also experiencing both economic and political unsteadiness because of unrest.
The last factor that is perhaps the most serious of all is climate change. A large percentage of the world’s overall carbon emission is produced by China. The consequences brought about by this could not only upset China, but also its bordering countries and countries around the world. Climate change is possibly irreversible and rising sea levels will undoubtedly cause problems in China’s south, and could even melt glaciers from China’s western part and the Tibetan region which will flood towns and cities and also cause a water shortage since these glaciers are an important water source for various streams and lakes.