Posts Tagged ‘Economic Development’

Is China’s Growth Sustainable?

Friday, March 11th, 2011

“For example, it is estimated that 40 percent of China’s water supply is now so polluted that it is unusable for any purpose, a circumstance that substantially increases the cost of industrial production in many sectors.”1

This statistic really floored me. I mean, I know that China isn’t exactly a bastion of environmentalism, but for 40 percent of the country’s water supply to be completely destroyed is crazy, especially for a country with a population as large as China’s demanding resources. And it’s so ironic. China isn’t regulating its industry very closely in the name of economic development, but that same lack of regulation is costing the state as much as 10% of GDP annually.2 In some ways its hard to fault China because the US and Europe managed to do all sorts of damage to our own natural resources while industrializing, too. Yet China saw what happened to the environment here and elsewhere and still went ahead with little to no regulation. How bad does it have to get before China realizes that responsible protection of limited resources is actually beneficial to economic growth in the long run? And for as long as China continues to pollute, developed countries have less incentive to curb their own emissions, making everyone and everyone’s economies worse off.

  1. Ho-Fung Hung, “A Caveat: Is the Rise of China Sustainable?” China and the Transformation of Global Capitalism, Ho-Fung Hung,ed. (Baltimore: The Johns Hopkins University Press, 2009), 197
  2. Ibid.

China’s Economic Growth

Tuesday, March 8th, 2011

“China makes goods spanning the entire value chain, on a scale that determines world prices. Hence East Asia’s anxiety. If China is more efficient at everything, what is there left for neighbors to do?”1

This quote was from The Economist in 2001, and it conveys the fears many of China’s neighbors had at the time about China’s growing power. Those countries had previously been the low cost areas for production, and when companies began moving to China the “Tigers” had to adapt their own economies to the changing global circumstances. But I thought it was interesting that the article attributed this fear of China’s efficiency and strength to China’s neighbors but not necessarily to the other developed economies of the world. I think that today, ten years after this article, many Americans are increasingly concerned China is going to outpace not just East Asia but the US as well. At the same time, those ten years have also seen different scandals emerge out of China in terms of the safety of some of the products made there that show, even though the economy is growing rapidly, there are still problem areas China must confront. I think it ultimately comes down to the idea of creativity and ingenuity. Yes, China may become more economically efficient at many things, but if other countries continue to come up with the next big thing, China will always be chasing after them. Will China adapt and become a more creative economy? Will the US and others continue to lament China’s gains while still failing to develop the new technologies and skills that will help them maintain their dominance?

  1. Ho-Fung Hung, China and the Transformation of Global Capitalism. Ho-Fung Hung, ed. (Baltimore, MD: The Johns Hopkins University Press), 2009, 12.

Rethinking Chinese Development

Sunday, March 6th, 2011

“The Chinese state many times backed off from carrying out those policies that could lead to massive layoffs and the elimination of social safety nets.” 1

The author makes this claim in comparing China to the East Asian countries that developed without China’s legacy of revolutionary socialism. China placed such emphasis on the collective well being for so long that it makes sense that the state did not want to abruptly deny individuals that sense of security. That history, too, might mean that most Chinese citizens would not understand the kind of economics behind the sort of big-picture policies that might put some people out of work while still benefiting the overall economy. According to the chapter, China is actually aiming to ramp up the level of social security nets available which seems a pretty extraordinary goal considering the size and relative poverty of China’s population. From what I understand, most of the current developed countries didn’t start implementing significant social safety net programs until the bulk of their economic development was completed. My question is, are Chinese leaders really trying to avoid policies that would harm the social safety net because of a true continued commitment to socialist ideologies or because they fear what happens to their hold on power if a large enough section of China’s massive population becomes dissatisfied with the economic directives the state hands down? High unemployment is never a good thing for those in control, even if what caused the unemployment is meant to be beneficial overall.

  1. Alvin Y. So, “Rethinking the Chinese Development Miracle,” China and the Transformation of Global Capitalism, Ho-fung Hung, editor (Baltimore: The Johns Hopkins University Press, 2009), 60.