Monday, December 03, 2012

The Road to Superpower Status Will Be Difficult for China

China's incredible economic growth in recent years was always fragile, never sustainable for long. Not only was it state-led and state-controlled, it was fuelled largely by the availability of cheap labour, a complete disregard for the environment, and state investment in grand infrastructure projects.

According to a RAND report, the proportion of the Chinese population of working age peaked in 2011 and has started to decline in 2012. This means the share of the elderly in the population is going to steadily increase in the coming years, which will increase labour costs, reduce savings, and inflate healthcare and pension costs. _Commentator
By virtue of its rapid economic growth and impressive cash reserves, China feels it is justified in flexing its muscles on the international stage. The country is attempting to build its ability to project force by developing stronger naval and air forces, as well as moving deeper into space launch and advanced missile development.

China has lost a great deal of arable land to urban development, and continues to do so every year. Water, soil, and air continue to be poisoned by lax environmental oversight, further decreasing the domestic ability to grow crops for the population.

The need for fertile farmland is growing more desperate, to the point that the Chinese are buying or leasing access to farmland on all continents. This is an important limitation and potential strategic weakness for the dragon.

Another large weakness is the lack of a sustainable economic strategy, leading many in China to believe that war will be necessary, so as to keep nationalistic sentiments high, and national cohesiveness strong -- even in the face of potential economic downturns.
China's economic growth has been sustained, in large part, by ignoring environmental concerns. Currently, China is the world's largest emitter of CO2 gases; it emitted 8.2 billion tonnes of CO2 in 2010, which is up by an incredible 240 percent since 1992. Water and air pollution in the country causes 750,000 premature deaths a year. Large infrastructure projects have also forcibly evicted and displaced millions whilst threatening the health of livelihoods of many millions more.

Needless to say, such policies are simply not sustainable. Local and international pressure is starting to bear fruit and many grand infrastructure projects being cancelled in the process.

Beyond economics, the lack of meaningful political reform is also helping to stunt progress. The state is still characterised by endemic corruption, weak rule of law, and a lack of political accountability. Despite attempts by the state suppress dissent, newly affluent citizens are also becoming increasingly assertive and demanding more rights and freedoms.

...On-going environmental concerns, an ageing population, competition from India, Vietnam, and Brazil, internal dissent and unhappiness, and a culture that doesn't encourage risk and creativity will combine to slow China's economic growth and leave the elites frustrated.

In theory, China can change course and embrace democratisation as well as take steps to ensure future economic growth is more market-led. But China's history informs us that these changes are highly unlikely. China is and will be a power - but the next great superpower it is not nor ever likely to be. _Commentator

1 comment:

Dave Schuler said...

If China's environmental problems weren't enough, China does not have the civil infrastructure to enforce environmental laws. China has tougher environmental laws than we do but laws are easy to come by. Putting the structures in place to see that they're enforced is much harder and to date China hasn't been very successful in doing it.