Problems Related to the Growth in China

Problems related to the growth of china

The impressive economic growth of china which is also leading to the increase in its GDP has encouraged other countries to compete with it, even the competing countries have to incur losses at the present. The problems below put to risk the economic growth and leadership of china.

Demographics

Chinas population had hit 1 billion by the end of 1070s which was controlled by Deng Xiaoping’s government by implementing one-child policy. Chinese demographers estimate that china’s growth rate is 2 and 2.3 percent a year. “The PRC would thus have about 100 million more people than the 1.3 billion its 2000 census indicated.” The vaccination data indicate that many children are born every year than indicated by census bureau data. There were many children unreported for the year 2000 in fear of punishment. One-child policy has lead to the want of a baby boy and not of a baby girl. The girl embryo is aborted, which is leading to a vast difference in the ratio of male and female which is 113–119:100 . This means that the number of men will increase so much that they will find no women to marry. The fine from parents giving birth to more than one child was becoming a source of income for the government. “Beijing announced that it was taking responsibility away from local authorities, but this was not expected to have any appreciable effect.” Energy sources The coal being produced in china is helping almost the three-quarters of china, but the coal being of bad quality is affecting the health of the people of republic of china, leading to mine-related deaths. “As the country’s economy grows, so does its need for oil. An oil exporter in 1993, imports were needed to meet one-third of China’s domestic needs in 2002. Even with that, by mid-summer 2003, two-thirds of its provinces had announced power restrictions.”
Daqing, the major oil field in the country is being depleted, due to which china has to survive on the oil that is imported. But in recent year china has started to import oil from Asia for which it has to build expensive pipeline. China plans to construct a 2,260-km pipeline from
Angarsk, near Russia’s Lake Baikal, to Daqing in northeast China, where oil can be refined and distributed.

Growing disparities in income levels There was equal distribution of income under the reign of Moa, till Deng Xiaoping came into existence. Its existence leads to income disparities. This disparity includes a wide ap between the rural and the urban area. “Eighty percent of the money in rural savings accounts belongs to 20 percent of the peasants; 50 percent of peasants have no savings at all.” The difference between the rich and the poor is a threat to the economic growth to china.
Unemployment
The efforts to restructure the economy lead to 60 million workers losing their jobs. Restructuring creates high unemployment resulting in the reduction of product demand in the domestic market and “creating the preconditions for social unrest that could result in the overthrow of Party and government.” Peasants conditions were worse than that of workers over the past five years. “ In the mid-1990s, farmers’ incomes began to drop through the combination of declining prices for grain and rising prices for farm tools and fertilizers. At the same time, the size of local governments, and therefore the costs of running them, increased markedly.” This means that the poor were charged with heavy and illegal taxes and fees which lead to the rise of peasants protest. For this reason Beijing acknowledged that rural discontent was a serious threat to national stability and therefore have organised policies to reduce the peasants’ burden.

Corruption Were Mao’s era had brought equality at had almost no corruption, the existence of Deng’s government brought about the word corruption in China. Yes to corruption brought bribery and profiteering, due to which the newly made high ways had cracks in them and while the damns n bridges collapsed. The corruption problem has always made the condition worse and will always continue to do. Bribery leads to the increase in cost of doing business, and due to which the quality of the goods sold is adversely affected. “Economist Hu Angang concluded that corruption lowers the country’s GDP by between 13.2 and 16.8 percent a year. This in turn causes a loss of $150 billion in tax revenue. Hu estimates that corruption diverts between 15 and 20 percent of the funds for any given project.”

The environment China’s environmental scientists have warned that their country’s ecological underpinnings are weakening. This is due to the huge increase in population in coastal China which has lead in the shortages of surface water. Ground water has been used to make up the difference, causing problems of sinking in some areas. Environmental worsening is reducing agricultural productivity and causing health problems; it may also cause collapse and water shortages that would reduce urban productivity. The efforts to solve one problem seem to cause others. “These palliative measures are likely to prevent system collapse, but will take their toll on future economic growth. The resource constraints, countervailing pressures, and irreconcilable trade-offs discussed above will prevent the PRC from becoming the new hegemon, or even a superpower, any time soon.”

Reference:
Dreyer, J. T., (2011, 10TH January). Democratization in Greater China: The Limits to China’s Growth. Retrieved March 15, 2011 from the World Wide Web: http://www.fpri.org/orbis/4802/dreyer.limitschinagrowth.pdf