The Development Challenges China Currently Faces - Case Study Example

Running Head: Outline the development challenges China currently faces Student’s Name: Instructor’s Name: Coarse Code and Name: Institution: Date of Submission:  Outline the development challenges China currently faces China’s economy is the third largest globally. The country has had a strong history in development issues comparing to other countries for instance Japan and United States. In the year 2008, China experienced a high growth rate in the economy with a nominal GDP summing up to US$4.91 trillion (David, 2008). When measuring the country in exchange-rate terms, china ranks the second world’s largest after U.S. with an 8.8 trillion G.DP. According to world economic reports, the country has been developing fast because of its ever-increasing purchasing power parity (PPP) (Keith, 2010). It also experiences the fastest-growing economy globally and has been in this rank for over 30 years now. The per capita income of the country has likewise been growing over time experiencing an average rate of not less than 8% annually over the past three decades (David, 2008). Some of its principal sources of strength in development have featured in agriculture and trade because it holds one of the prominent markets globally for industrial and agricultural products. However, the country’s development currently faces serious challenges that lower level of development and worsening the situation by day (Keith, 2010). The environment is deteriorating globally including China environs. It is through the deterioration of the environment that the globe faces extinction of any living being following threats of environmental pollution and concurrently global warming. China has received substantial threats from the environmental status quo of the country. Currently, the country depends on agriculture and other principal exports that are subject to influence from the environment. Levels of development in the country have faced serious challenges following hitches from the environment that hit its agricultural sector and lessening its contribution to development (Keith, 2010). China is facing environmental crisis currently as the case with other countries globally. The environmental problems worsen by day both from internal and external sources. Five of the ten mainly polluted cities globally are in China basing on the WHO reports of year 2009. The country, being one-quarter desert is experiencing challenges with the expansion of the desert at a rate of 1900 square miles each year. This issue poses as a challenge because it lowers China’s productivity in terms of agricultural products therefore, reducing its exports and affecting its development (Shafik, 2004). The condition also causes a growing water scarcity that spreads throughout China's west and north, the most productive parts of the country. Elizabeth Economy, a pronounced director of Asia studies said lately in a conferences that in simple terms, China's environment is severely deteriorating by day and at a rapid rate despite considerable attempts to address the issue (David, 2008). China’s environment is under severe attack almost on every front making it difficult to curb the damage done to the agricultural sector and facilitating more severe potential challenges to the country’s growth (Harvey, 2007). Its ever-growing economy facilitates industrial growth at an alarming rate resulting in deforestation, widespread pollution, and a severe strain (Keith, 2010) on the country's many natural resources. The natural resources are growing extinct leading to a potential risk of under production in the country and consequently slowing down the rates of development. Air pollution in china has featured as one of the most perceptible problems of the environment that the country is facing currently (David, 2008). From the global index in air pollution, China stands as the first among the developed nations (Harvey, 2007). The strong reliance on coal for China has been the principal cause of high rates of air pollution in the country. There have been poor policies on the side of the government in implementing pollution control technologies leading to more potential risks of environmental pollution (Shafik, 2004). Land management in china is another environmental challenge in China’s development. Because of the previous rapid economic growth of China, the country experienced widespread deforestation resulting to devastating erosion of the land. As a result, there is a rising percentage of the country’s land now being qualified as desert and useless for agricultural production (David, 2008). China's environment mounts enormous problems for its capital, Beijing. The country is also a leading emitter of in sulfur (Harvey, 2007). The air pollution has been a leading cause of death in the capital and other parts across the country (Harvey, 2007). This reduces the chances of development with serious difficulties in carrying out innovation in the land. The pollution leaves over 400,000 Chinese dead annually (Harvey, 2007). The situation is worse because of the pollutants reducing crop returns in both quality and quantity and quality following pollution in water and land. The pollution in China is prospected at over double in the next decade meaning that it is getting worse, and development remains in a dilemma to the country (Keith, 2010). The ever-increasing population in China is expected to make the environmental pollution worse. Chinese increasing consumers are spending hundreds of millions to purchase automobiles; a situation leading to more air-pollution and worsening the environmental problem problems (Shafik, 2004). The population in the urban areas, in the country is also increasing, and slums are developing by the day. This poses as a stressing element to urban sanitation as well as its delivery systems thereby adding to pollution levels and negating the development possibilities within the country (Keith, 2010). One of the major challenges in the development process, in China is the rising income inequalities. Because of the high development and rising of economies in various sectors within the country, the country is creating an imbalance in the income rates in the country (David, 2008). The differences have posted serious difficulties in some of the population, in the country. A large portion of the country is living under conditions of extreme poverty create high dependency ratio in the region (Keith, 2010). Taiwan, being the largest island in China’s republic has a high population that creates diversity in income ratios. From the bureau of statistics in the country, Taiwan has the largest segment of the population living in excessive poverty conditions. The dependency ratio rates at 35% among the population in the region. Immediately after World War II, Taiwan, experienced remarkable growth rates in the region known as “Taiwan Miracle” by greatest economies in the world (Harvey, 2007). However, this has since been short lived because of the income inequalities created in the region. The inequalities have increased dependency ratio leading to more severe conditions and affecting the national economy thereby reducing the levels of development (Shafik, 2004). Another major challenge of development in china is the pressure of domestic inflation as well as inflation experienced internationally. The levels of inflation are unpredictable and they alternate repeatedly causing an alarm in China’s development, and shakings its economic stability (David, 2008). Following the combined influence in the country involving adverse economic factors at home and others from abroad, the economic growth of the country has had a difficult time in sustaining its level of development (Keith, 2010). The country’s political influence has had a substantial influence and imparted inflation into the country that poses as a challenge to development currently. Mr. Deng's, an official in China’s Government brought about rural reforms late last year in his attempt to entice the population living in poor conditions that they will improve their standards (Harvey, 2007). The force in the first place had quit a positive effect especially on the farmer because they were geared towards developing the rural areas and opening them up for development. However, the reforms devastated China's central planning mechanism and posed as a current challenge to development (David, 2008). After the freeing of farmers, and giving them land free, the reforms also permitted them to sell what they harvested from the farms at market prices tax-free. This resulted to record harvests from the farmers during the year. Just last year the Yangtze Valley of China experienced changes in income for the farmers as they built new brick houses following an increased capacity in purchasing power (Keith, 2010). The reforms opened doors for everyone and money flow was experienced at a high rate. Spending has since been on a high for China’s populace resulting to growing inflation. This has been the potential state of the country and a risk as well as a challenge to development currently. Secretary Zhao, of China, recently acknowledged in a Congress press conference that inflation has hit the currently, and it is ruining development concepts (Shafik, 2004). The current rate of inflation is China runs at 15 percent especially in principal urban areas and an approximated 10 percent in the rural areas. The reason for this condition in the country owes to the high spending of the local governments on consumer products than on building infrastructure. The situation has grown dire; it affects the central Government making development a difficult process to realize. The country currently faces extremes and challenges in development with unplanned budget deficit hitting its economy (Keith, 2010). There have been other potential sources and risks of inflation that the country faces and underdevelopment is slowing taking shape in China’s economy. For the last four years, the government has been keeping food prices artificially low (Keith, 2010) and has accepted experienced shortages. To deal with the situation of food shortages and other serious issues of rural poverty, China’s Government in the last two years allowed farmers to sell their products at flea market prices (David, 2008). It was a reasonable strategy in handling food shortages because the situation disappeared, but its average in the cost of food items are increasing by day. Worried of inflation, China’s Government has put across measures slapping price controls once again on farm products including eggs and chickens and inflation is picking up at a higher rate. Literary, China has had to fight Inflation in domestic terms currently, and it is slowing down its development levels persistently (Harvey, 2007). The population of China has grown drastically, and it continues to take an upward trend in the current statistics. This is both a negative as well as a positive attribute to the country in considering its development status (David, 2008). The country has high purchasing power from the increased population and its market diversifies allowing for greater production and innovations responsible for the development. However, it has been the principal cause of underdevelopment across key regions in China and this has affected the national development creating a tremendous challenge for the future development of the country (Shafik, 2004). The 21st century has come in, and rapid development of science has contributed to the swift changes in global economic order with the patterns of the population becoming a critical issue in considering the development of a country. To achieve sustainable development, China and all countries globally seek the harmony between population, society, economy, environment and resources (Keith, 2010). China is a world’s number one developing country holding the biggest population. A sample survey in the recent statistics indicate that China's population reached approximately 1.26 billion in 1999, and the trend of growth is on a high in the recent years. To be precise, these statistics did not include the population residing in Macao Administrative Regions, Hong Kong and Taiwan Province (Keith, 2010). With the standings, China accounts for approximately 21% of the population globally. The population is a formidable challenge to development practice in the country. It is relative that China has such prodigious population, but with a weak economic foundation, that does not support the population. There are inadequate resources in the region per capita making the development process a challenge and one of the difficult goals to realize in the country. Many other contradictions as well as problems associated to hindrance of development in China's are population oriented (Shafik, 2004). The issues have been a hindrance and the primary problem that restricts China's economic growth and social development. Even with the introduction of policies by the government to stay in line with the goals of development in the country, the Chinese Government still faces challenges of illiteracy levels, poverty, high dependency ratio and poor health among others that slow down development. The high population demands a higher budget for social amenities and the country faces a challenge in meeting the demands from the high population (Keith, 2010). Unemployment is looming in China, and this acts as a major challenge to development in any country. The ever-increasing population supersedes the opportunities available in the employment industry within the country (David, 2008). Many professionals in China have turned to unskilled jobs to earn a living because of scarcity and the high competition in the job market. The National statistics of 2009 indicated that the rate of unemployment has hit 22% from the 18% in the previous years posing as a great challenge to developmental issues in the country (Keith, 2010). The country also faces high expenditure on health annually with the expense increasing by 2% every year since 1999. This is an enormous challenge since it increases the mortality rate in the region and an increased death rate. In the future, the country risks a decrease in the labor market. The is a challenge in the ratio of age group with the majority being at the younger age below 18 years and the other majority being above 45 years. Because of this, the labor market faces a challenge leading to low production and thereafter, slow development within the country (Keith, 2010). China also faces high migration rates as compared to other countries globally. Because of the high population, and fewer resources resulting to high competition majority of the Chinese are migrating to other regions in search of opportunities otherwise named as “greener pastures.” A good illustration is the looming migration to Tibet by the Chinese population. The Chinese have invaded Tibet since 1949, but the current rate is exceptionally high. China’s policy adopted on occupation and oppression (Shafik, 2004) has resulted to the majority of its population migrating to Tibet and other regions. In fact, with a continued experience of Chinese population transferring to Tibet currently, Tibetans are soon becoming a minority (Keith, 2010) in their own land. Today there are over six million Chinese in Tibet in search of education, investment opportunities and jobs. It is a relief for the Chinese population but a considerable challenge to the country’s development in future (David, 2008). Most of its resources are soon shifting to foreign lands, and the country is losing them. The challenge may not be felt currently, but it will be severe in the next few years to come especially is the trend continues (Harvey, 2007). The proliferation as well as the spreading of the financial crisis internationally further challenged and increased the influence on China development slowing down its economic growth (David, 2008). Currently, the world’s economy is facing high declines in strength and many world currencies have had a fall in value owing to the ever present the financial crisis. An outstanding feature is the recent depression that attacked every economy globally. The depression slowed down development and hit mostly in developed countries including China (Shafik, 2004). China’s economy was hit badly by the depression, and many of its development strategies were suppressed including its bigger plans of extending its influence globally. The country compromised most of its plans set to boost its economic development including closing down most of its industries to safeguard the running and operation of its economy and this lead to a decline in development in the region (Keith, 2010). Conclusion In summary, China is still holding to the rank as the second best in development. However, this rank is short-lived looking into the future prospects and the happenings around the country. Development in China could mainly emanate from its prospective sectors including, agriculture and trade industry, of which, they are facing monumental challenges (David, 2008). Among the challenges most prominent include population growth at an alarming rate, increased environmental problems, inflation both domestic, and international and many others that touch on its economy. The government has done a lot to contain the challenges but the intensity of these challenges is soon overwhelming the resources available. It is apparent that China’s developing is taking shape but will soon face a downward motion if proper approaches to handle the challenges are not set. The government ought to take this opportunity when the situation is not dire to set a pathway for solving the challenges facing development in order to fix future prospects and promise the country better development in the future. References David, B. (2008, February 1). "China’s Inflation Hits American Price Tags" The New York Times. Harvey, F. (2007). The Economic Challenges Facing China's New Leaders, Retrieved November 7, 1987, from http://www.nytimes.com/1987/11/07/opinion/the-economic-challenges- facing -china-s-new-leaders.html?pagewanted=1 Keith, B. (2010, February 26). "Defying Global Slump, China Has Labor Shortage" The New York Times. Shafik, N. (2004). Economic Growth and environment Quality: An Econometric Analysis. Oxford Economic Papers, 46: 162-178. Read More