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Major Challenges affecting China’s future
Over the past few years, China has realized tremendous economic growth surpassing Japan’s economy to become the second largest economy in the world. China’s continued economic growth has been unrivaled by other countries such that it is now considered as an emerging super power (Morrison, 23). However, there are major challenges which are likely to affect the Chinese economy’s continued growth trend. In the next twenty years, China will have to overhaul some of its political, economic and social institutions to deal with these challenges so as to continue to realize its place as the world’s second superpower.
These major challenges include reversing the one child policy, addressing issues of climate change and environmental degradation as well as adopting a liberalized political system. The one child policy was adopted in the 1970’s to shield Chinese economic growth prospects from the adverse effects of a high population growth rate (Naughton, 17). The situation is bound to change in the near future as aspects of globalization have made China the desired country for multinational companies to set up new plants and factories. Currently, there has been a shortfall in the availability of labor in China making the country’s leadership to opt to rethink the one child policy (Scharping, 47). This challenge is of great importance to China as it needs an abundant and skilled workforce so as to realize continued economic growth in future.
Climate change is another major challenge that is bound to continuously affect the Chinese economy in the near future (Carter and Arthur, 56). The country is said to have lax environmental protection laws which have resulted in many incidences of environmental pollution. The many industries in China both urban and rural have been attributed with the high pollution levels in cities around China. This is of great importance to the future of China’s economic growth as the world shifts towards green economies. (Yunna and Xu, 79)
China’s has a rigid political system which also affects the education system and the government bureaucratic system. The political system in China limits innovation as the education system does not factor in critical thinking. Though the education system is bound to provide the Chinese economy with millions of new graduates in future, there is the need for the Chinese political system to liberalize its sectors to be more competitive on the global stage (Morrison, 23). This underscores the need for this challenge to be overcome if the Chinese economy is to realize its continued economic growth into the future. The state has to ease its hold on other sectors of the Chinese economy, not only in the education sector but also in economic reforms (Goldman and Edward, 67).
These three major challenges have an overall effect of a slowly stagnating Chinese economy. Globalization for instance has been one of the major drivers of economic growth in China. The huge Chinese population translates to a huge consumer market which many multinational organizations have sought to capitalize on (Naughton, 20). Furthermore, the abundance of skilled and cheap labor has seen many multinational companies open up shop in China so as to realize better profit margins. The three major challenges which have the future effect of a stagnating or depressed Chinese economy all affect it future position as a global leader.
The one child policy was meant to ensure that population growth did not overtake economic development. As such, this policy worked well in favor of the Chinese economy resulting in sustainable demographic numbers and a booming economy (Scharping, 49). However, as the country has continued to attract more foreign direct investments, there has been a marked decrease in the availability of skilled labor. Abundant labor has also declined in the past few years as rural populations are left with an over aged population and industries within the cities citing an increase in job migration rates.
Effects of climate change have also made fewer people to opt to work in cities as air and water pollution continue to affects China’s big cities. State control on the education sector has also led to the prevalence of graduates with limited innovativeness and critical thinking skills highly favored by foreign multinationals who favor such skills (Goldman and Edward, 77). These are bound to have a negative impact on the future prospects of China’s growth 20 years from now. If the situation continues unabated, multinational companies may relocate to the developing world while at the same time still maintaining a grip on the country’s huge consumer market. As such, the Chinese government will stand to lose on foreign direct investment and more so spend more money on importing more competitive consumer goods (Ash, Christopher and Kueh, 32). It is important to note that China at present is a global leader in many aspects of the global economy. To maintain this status quo, it has to seek to overhaul its economic, social and political apparatus to continue expanding its authority as a major player in the global economy.
China has realized the fastest economic growth in the world in the past decade. This has indeed been phenomenal as no other country has the population that china boasts. Its opportunities for future growth are also quite tremendous. However, this is not likely to be at par with economic growth trends realized in the past ten years. In the last decade, the country realized huge strides in infrastructure developments, foreign direct investments and a global market for its goods and services. This is bound to be a hard act to follow in the future. However, should the country continue to invest more on its domestic markets and rural infrastructure development projects, it may continue to realize economic growth though at a rate lower that that witnessed in the past decade (Hall and Ulrich, 112).
Ash, Robert, Christopher, Howe, and Kueh, Y.Y. eds. China’s economic reform: A study with documents. London: Routledge, 2013. Print.
Carter, Neil, and Arthur PJ Mol, eds. Environmental governance in China. London: Routledge, 2013. Print.
Goldman, Merle, and Edward Gu, eds. Chinese intellectuals between state and market. Routledge, 2013.
Hall, Peter, and Ulrich Pfeiffer. Urban future 21: a global agenda for twenty-first century cities. London: Routledge, 2013. Print.
Morrison, Wayne M. “China’s Economic Rise: History, Trends, Challenges, and Implications for the United States.” Library of Congress, Congressional Research Service, 2013.
Naughton, Barry. “China’s Economy: Complacency, Crisis & the Challenge of Reform.” Daedalus 143.2 (2014): 14-25.
Scharping, Thomas. Birth Control in China 1949-2000: Population policy and demographic development. London: Routledge, 2013. Print.
Yunna, Wu, and Xu Ruhang. “Current status, future potentials and challenges of renewable energy development in Gansu province (Northwest China).” Renewable and Sustainable Energy Reviews 18 (2013): 73-86.