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Analysis On China Economy

December 27, 2009

China’s wealth is credited to its former leader Deng Xiaoping who opened China’s gates for external investments and companies that made China an economic superpower.

Contrary to the communist ideals that Mao strongly opposed throughout his seat in power, Deng have turned the country from a communist agrarian system of economy into capitalism. 

China is now the leading manufacturer and exporter of products in the world market.  A lot of western businesses subcontract their labour force in China particularly due to the low labour costs. 

Over the last ten years, the transformation of China has become a testament to its elaborate form of economy.  A GDP growth of around 7-9 percent has been the recent forecast for the year 2009.

Business competency is also common among the Chinese.  In every country around the world where there is a considerable Chinese populace or China towns, a lot of them make their livelihood by entrepreneurship and most of their businesses are stories of triumph.

Even though China’s economy is on the rise, a lot of finance experts still see heaps of hurdles that could halt its development or even cause its economic demise. 

One of these reasons is economic imbalance.  One of which is the issue of imbalance in terms of development in favor of urban areas over rural.  As the urban population in China experiences an improvement in their lives, a lot of people in the rural areas still experience hardships particularly in the farming and housing communities.

This situation might somewhat resemble Mao’s “Great Leap Forward” where the chairman ordered farmers to become steel workers resulting to China’s starvation.  Today’s China, however, have a more balanced food production than ever before but it still has a long way to go before it can attain perfect balance.

Another hindrance is China’s tense political and societal atmosphere.  So far, the ruling communists have been successful in suppressing dissent and opposition within its mainland and other places they claim to be theirs such as Tibet. 

China is also primed to keep Tibet under an iron grip and their way of doing this is by emigration of the Chinese population to Tibet, constructions, and banning freedom of expression.

Other sections in China like the region of Xinjiang, where there is a significant inhabitants of Muslim Uighurs, is also experiencing both economic and political instability because of unrest. 

The most serious of all possible causes for China’s development is climate change.  The pollution and carbon emission China yields has risen just over the last 20 years and has now overtaken America.  The costs could not just upset China, but also the other countries.  The irreversible effects of climate change will trigger rising sea levels will certainly 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 numerous streams and lakes.

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