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Constant domestic conflict hampered economic growth and pushed China deeper into poverty. Moreover, the feudal system at that time gave soldiers the power to loot and pillage, making the miserable life of peasants worse (Morton & Lewis, 2005, p. 183).
When Mao came into power, his main goals focused on the improvement of social conditions in China. Hence, he initiated “land reform, the collectivization of agriculture, and the spread of medical services” (“Three Chinese”, n.d.). However, Mao’s restrictive leadership, caused by his strong desire for equality and fears of capitalist resurgence, prevented the modernization of China and led to the Cultural Revolution (Jackson, 2004). The revolution sought to limit intellectualization in the country and to advance its agriculture. Unfortunately, it failed to bring development to China and seriously damaged the nation’s progress (Jackson, 2004).
Mao’s conservative politics meant that China had to remain isolated from international trade. Despite his ideal visions for the country, its economic system remained insufficient and the problem was brought to greater attention in the 1960s (Lin, Cai, & Li, 2003, p. 137). However, it was only in 1978 that significant changes were made, out of the Chinese’ awareness that they are getting left behind by other industrialized nations. Also, leaders realized that China needs to change its traditional agricultural economy into a modern and industrial one to achieve progress (Lin, Cai, & Li, 2003, pp. 137-138). The collapsing economy and the more impoverished citizenry all led to the strengthening of economic reforms.
Currently, the trade relations between China and the U.S. is prosperous—about 75% of U.S. imports are from China, making it the country’s 4th largest partner (Griswold, 2002). However, the U.S. is exercising utmost caution in their political relations since China is becoming a major threat economically and politically (Dumbaugh, 2006). It has become more assertive in international policymaking (a sign of its greater power) and it began signing new deals with oil and technology suppliers (some of which have current negotiations with the U.S.). China’s growing competitiveness may taint its relations with the U.S. ten years from now since it will limit America’s policymaking at the international level. It may also divert some of the economic deals that are supposed to go to the U.S. Dumbaugh also noted the possibility of a Sino-American conflict in the future.
Dumbaugh’s (2006) CSR report shows that Taiwan is far from being independent, with the signing of the new anti-secession law that declares the Chinese will have to use force if Taiwan continues its insistence on independence. A conflict may occur in the future between China and Taiwan as the “renegade province” began purchasing arms from the U.S. recently as it increases its capabilities for territorial defense (Capaccio, 2010).
Just like Taiwan, China claims territory over Mongolia and Tibet. Currently, Mongolia is a sovereign country while Tibet remains a Chinese province. Mongolia denies authority to China over them, reasoning that China is only making it a pretext to expand to accommodate its population (“China”, n.d.). On the other hand, Tibet remains popular internationally because of the Dalai Lama’s vehement campaigns for greater autonomy for the region. The campaigns by the Dalai Lama, which anger China, make it impossible for him to come home. China has repeatedly expressed its disappointment to countries that meet the Dalai Lama (BBC News, 2010). China's strong desire to control Mongolia and Tibet will have economic impacts on the former and political ones on the latter. Mongolia can be expected to have slow economic growth because China will remain hostile to it in terms of trade while Tibet will have to strive harder to preserve its culture and religion as China will likely impose a stronger hold to prevent the Dalai Lama's international influence from liberating it.
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