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| |+ '''People's Republic of China''' | |||
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| | {{legend|{{{color1|green}}}|'''People's Republic of China'''}} | |||
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| :''For more information on the topic see ] and ]'' | |||
| The ''']''' (PRC) is often considered an emerging ] due to its large and stable population, its rapidly growing ] and ] and capabilities <ref>Oded Shenkar </ref>. However, it has several economic, political, and demographic problems which need to be overcome to be considered as a superpower. It is also not yet as influential on the international stage when compared to the ] or the former ]. | |||
| ==Factors in favor== | |||
| ===Geographic factors=== | |||
| ] | |||
| ] trend from 1952 to 2005. As the graph demonstrates, GDP growth began to accelerate after the end of the ], around the time the first farm privatisations took place, when China implemented market-based (capitalist) economic reforms after 1978. Maoist China never experienced a high GDP rate.]] | |||
| '''Territorial size''' - The People's Republic of China covers a total area of 9,596,960 km² <ref>Both ] and regions under PRC's effective administration</ref><ref>According to the ''CIA - The World Factbook'', China has an area of "9,596,960 sq km - slightly smaller than the US".</ref> which is the ] in the world after ] and ]. China's total ] area is the second largest in the world after Russia. <ref>Covering a total land area of 9,326,410 km², </ref> | |||
| '''Natural resources''' - China's land possesses vast wealth of valuable ] such as ], ], and ]s <ref>China Internet Information Center </ref> <ref>Encyclopædia Britannica </ref>. In view of PRC's extensive river network and mountainous terrain, there is ample potential for the production of ] <ref>Encyclopædia Britannica </ref> <ref>Alexander's Gas and Oil Connections </ref>. In fact, China has the largest hydroelectric potential in the world. <ref>BBC News </ref>. | |||
| ===Demographic factors=== | |||
| '''Population size''' - ] is the world's largest, with about 1.3 billion citizens <ref>CIA - </ref>. With the global human population currently estimated at about 6.5 billion, China is home to approximately 20%. Because of the ] the PRC is able to control the population in mainland China, although this may eventually have a detrimental effect on mainland China's demographics. | |||
| ===Military factors=== | |||
| {|align=left | |||
| | ] tanks are one latest variant of China's 2nd generation ]s. PRC is rapidly modernizing its military]] | |||
| |}''']''' - The 2.25-million-strong ] makes it the largest military in the world, in terms of sheer number of troops (3.25 million if the ] is included). However, the PRC is not part of any multinational military alliance such as the ] (whose total size of armed forces number, 4,086,900<ref>NATO Statistics </ref> in 1999, would have dwarfed that of the PRC). In spite of these numbers, the PLA is behind advanced Western militaries in many areas. Recognizing this fact, the PRC is undergoing a massive effort to improve and modernize its military technology, equipment, and power projection capabilities <ref>US Department of Defense </ref> - all fueled by a rapidly growing defense budget. <ref>BBC </ref> | |||
| ===International trade and political influences=== | |||
| ] as of 2006, showing the five <font color="#374EA2">permanent members</font> (including China) who have veto powers and the <font color="339933">elected members</font> who do not.]] | |||
| ] with ]. As the U.S. and the PRC are two major players in world politics, the Sino-U.S. relations are closely watched by international observers]] | |||
| ''']''' - As one of the five permanent members of the ] with ], the PRC has increasing influence in world politics. | |||
| '''International influence''' - The PRC is gradually increasing its influence in areas which are traditionally dominated by the influence of Western countries. This is in part due to the PRC's non-ideological approach to foreign affairs and offer of no-strings-attached assistance, which thus presents an alternative for seeking foreign aid and potential allies. Its ties with these countries have become closer driven by strengthening economic bond through trade and strategic investment, and to a much lesser extent, military cooperation <ref>The Jamestown Foundation | |||
| </ref><ref>New York Times </ref>. | |||
| '''Influence in ]''' - China is ]'s, ]'s and ]'s largest trading partner.<ref></ref><ref> </ref><ref></ref> Growing trade and investment have given the PRC a greater politico-economic leverage over ].<ref>The Jamestown Foundation </ref> The PRC also has a considerable influence in the military, economy, and politics of ].<ref>Taipei Times </ref> ] has used its political influence over the North Korean leadership to actively engage itself in the ] in resolving North Korean nuclear crisis. | |||
| '''Influence in ]''' - Since the 1960s and 70s the PRC has set out to improve relations with Africa. The PRC's interest centered on building ideological solidarity with other underdeveloped nations to advance Chinese-style communism and on repelling so called, Western "]". Following the ], the PRC's interests evolved into more pragmatic pursuits such as trade, investment, and energy <ref>The Heritage Foundation </ref>. ] trade has quadrupled since the beginning of the 21st century. China is now Africa's third largest commercial partner after the US and France, and second largest exporter to Africa after France. It is ahead of ex-colonial power the United Kingdom in both categories. <ref>International Committee of the Fourth International </ref> In November 2006, China hosted the heads of states of 48 African countries in Beijing's ] Summit to strengthen its economic and political influence in the continent. <ref> BBC News, 4 November 2006.</ref> | |||
| ], an inter-governmental organization between the PRC, ] and the ]n states.]] | |||
| '''Influence in ]''' - As the Chinese economy grows, a major priority is securing natural resources to keep pace with demand. Chinese oil companies have invested into Kazakh oil fields, PRC and ] have constructed a ] and are planning to construct a ]. In ] and ], the PRC has invested in hydroelectric projects. In addition to trade ties, the PRC has contributed aid and funding to the region's countries.<ref>Japan Focus Article </ref> The ], of which the PRC is a founding member, is also becoming increasingly important in Central Asian security and politics. Some observers believe that beyond fostering neighborly relations, the PRC is primarily concerned with securing its borders as it emerges as a world power.<ref>YaleGlobal Online </ref> | |||
| '''Influence in the ]''' - The ] East is a strategically important region as it not only possesses vast ], but large portions of its population are opposed to the ], the world's only superpower. China has seeked out these oil reserves and has also provided security deals to Middle Eastern nations in the face of global condemnation of Middle Eastern ]. China's fast economic growth also means that China is consuming more ]. China is now the second largest consumer of ] products in the world after the United States. The PRC has recently been trying to secure and diversify sources of its energy (] and ]) supplies from around the world. The ]ern region, which contains the world's largest proven oil reserve, has been the focus of that policy. Roughly half of China's imported oil comes from the ]. At the same time, these energy-producing Middle Eastern nations are keen to diversify their customer base away from overdependence on the ] market (] and ]) as a demand source and so they have begun to look at other rapidly growing markets such as China. In addition to the deepening bilateral relationship in the trade and energy sectors, the PRC has an expanding body of other strategic interests in the greater Middle East region. This is manifested in its security relationships with ], ], and ], which entail ] and ballistic missile cooperation. These include contentious arms deals which included providing ] and ] with weapons which could not only harass oil tankers and American ]s, but also carry ]. There are concerns that nothing is being done to stop these arms from falling into ] hands. <ref></ref> In fact, some of the weapons being used in ] by the growing ] there are based on Chinese designs.<ref> ''Iraqi terrorists 'are being supplied with arms smuggled from Iran''</ref> In 2002, China were labelled the "greatest source of proliferation of weapons of mass destruction and missile technology". As one of the only sources of such technology to the region, China has placed itself in a strong position to further exert influence on Middle Eastern nations.<ref> Space Daily</ref> Saudi Arabia, Iran, and Pakistan are pivotal states in the region. They are somewhat likely to view the PRC in coming years as an alternate source of security and as a counterbalance to American power <ref> The Washington Institute for Near East Policy </ref> <ref>MERIA </ref> <ref> Asia Times </ref>. | |||
| '''Influence in ]''' - While China runs a ] with India, it has ]es with other ]n economies (including ], ], ] and ]). It has conducted large arms deals with ]. After the ]'s nuclear deal with ], the PRC controversially offered Pakistan and Bangladesh ]. To maintain relations with India, the PRC has decided to lay down its claims to the Indian state of ]. The PRC has also helped improve the development sector of the South Asian economies of Pakistan, Bangladesh, Sri Lanka, and Nepal who are the largest beneficiaries of this economic aid. <ref>UCLA Asia Institute </ref>. | |||
| '''Influence in ]''' - Some of the PRC's geopolitical ambitions focus on Southeast Asia, where the PRC is intent upon establishing a preeminent ]. The PRC has pursued this ambition with a diplomatic campaign designed to increase its influence politically and economically. In November 2006, the PRC conducted several agreements with Southeast Asian countries to increase free trade, cultural ties, military and security cooperations, and solutions to settle the disputes regarding the ownership of the Spratley Isles. The talks also discussed a possibility to form a political, economic, and security bloc between the PRC and the ] in the near future. <ref>USCC </ref> <ref>Los Angeles Times </ref> <ref>Japan Focus Article </ref> | |||
| '''Influence in ] and the ]''' - Recent years have seen the PRC's growing economic and political influence in ] and the Caribbean. During a visit to ], ], ], and ] in November 2004, PRC President ] announced US$100 billion worth of investment over the next decade <ref>The Heritage Foundation </ref> <ref>CNSnews.com </ref> <ref>Columbia Daily Tribune </ref>. For instance, Cuba is turning to Chinese companies rather than Western ones to modernize its crippled transportation system at a cost of more than US$1 billion, continuing a trend of favoring the fellow communist country that has made China Cuba's second-largest trading partner after ] in 2005 <ref>United Transportation Union </ref>. In addition, The PRC is expanding its military-to-military contacts in the region. The PRC is training increasing numbers of Latin American military personnel, taking advantage of a three-year old U.S. law that has led to a sharp decline in U.S.-run training programs for the region <ref>GlobalSecurity.org </ref>. | |||
| ===Economic factors=== | |||
| ]. Shanghai's ] (not pictured) is on the east side of the ]. Much of Shanghai's development began in 1992 when the late ] made his famous Southern Tour and focused China's priorities toward economic development. <ref> by Suisheng Zhao, UCLA Press, 1993.</ref>]] | |||
| ''']''' - has grown at a rate of at least 9% per year for more than 25 years (although recently the government has sought to slow this growth to curtail overheating and waste), one of the fastest growth rates for a major economy in recorded history <ref>MSNBC Newsweek </ref>. In 2005, China became the fourth largest economy in the world in terms of market exchange value <ref>New York Times </ref> and the second largest when measured by purchasing power parity, with a GDP (PPP) of US$8.8 trillion in 2006. In the same period of time, it has moved 300 million people out of poverty and raised the average Chinese person's income by 8 times. <ref>Center for International Comparisons at the University of Pennsylvania </ref> <ref>CIA - </ref>. | |||
| ]). China has the world's second longest length of expressways, after the United States.]] | |||
| ] crew inside the operating module. China is one of only three countries in the world to have sent men into space, and is currently planning a ] by 2020.]] | |||
| ''']''' - China has many cities with large populations.<ref> Panorama of Chinese Cities http://www.skyscrapercity.com/showthread.php?t=401687 </ref> Most of them are encircled with expressways for example, the ].<ref>People's Daily Online </ref> These metropolises are national or regional centers of industrial, financial, and cultural activities. ], China's largest city, is an important financial center in Asia and has the ].<ref>TIMEasia </ref> | |||
| ''']''' - China's international trade grew at an annual average rate of 29.5% in the last four years <ref>The US-China Business Council </ref>. China’s export share is 7.3% and import share is 6.3% in world trade in 2005 <ref> CIA -</ref> <ref>CIA - </ref>. China is currently the world's third largest trading power (after the United States and Germany) <ref>CNN News - </ref> <ref> US Department of State </ref>. Some reports have shown that China is not only a major manufacturing export economy, but also moving up to become a high-tech product export economy. During 2005, China's high-tech export was about 218 billion US dollars.<ref>Asia Times </ref>. The PRC government also put great efforts to push for exporting medical supplies and software. China's ] reached $1 trillion (October 2006), becoming the largest in the world <ref>BBC News </ref>. The PRC, representing the customs territory of comprised of mainland China, has been a member of ] since 11 December 2001. | |||
| ''']''' - China's infrastructure has radically improved in last two decades. The total ] length was about 41,000 kilometers at the end of 2005, the world's second longest only after the United States. <ref>SkyscraperCity.com </ref> <ref>CHINAGATE </ref> Several thousands of kilometers of new expressways are added to form the nationwide expressway network every year <ref>CHINAGATE </ref>. China has the ] ] and also has plans to build several other ], including the 1300-kilometer ] and the ]. China is home of many of the ]s. Communication infrastructure in China has also rapidly risen in the last decade, today China has more main telephone lines and mobile cellular telephones than any other economy <ref>CIA - </ref> <ref>CIA - </ref>. As of 2005, there are more than 400 million cell phone subscribers in China and China is currently second only to the United States in ]. Currently, China's infrastructure leads significantly when compared to that of ], which is also considered as a potential superpower.<ref>Deloitte Report </ref> <ref>The Globalist </ref> <ref>Rediff.com </ref>. | |||
| ''']''' - China is the world's second biggest spender on ], and is expected to invest over $136 billion this year after growing more than 20% in the past year.<ref> ''Financial Times''. Accessed 3 December 2006.</ref> China currently has an estimated 926,000 researchers, second in number only to the 1.3 million in the United States.<ref> ''BusinessWeek''. Retrieved 3 December 2006.</ref> R&D spending by the PRC government has more than tripled since 1998. Moreover, the numbers of the scientific research paper doubled in the same period. According to experts, China might produce more engineering doctorates than the U.S. in 2010. Many foreign companies are setting up R&D centres in China due to official government support and to tap lower-cost Chinese talents. <ref>BusinessWeek </ref>. | |||
| ''']''' The PRC launched its first satellite ] to Earth orbit on its own ] in 1970, becoming the fifth nation to achieve independent launch capability. There were over 50 ] satellites launched over the next thirty years. The PRC also became the third country (after the former Soviet Union and the USA) to send humans into space on its own in 2003. The PRC has said that it plans to launch its own ] and to send a manned mission to the moon by 2020. <ref>Space Today </ref> | |||
| ===Cultural factors=== | |||
| ].]] | |||
| ].]] | |||
| ''']''' - According to history, many have seen China as having attractive ] and ]. Chinese novelist ] won Chinese first ] in 2000, and the Chinese-language film '']'' became the highest grossing non-English film. Many Chinese actors/actresses and motion picture makers such as ], ], ] <ref></ref>, ], and ] have gained international recognition. ], the Chinese basketball star of the U.S. ]'s ], is rapidly becoming a household name, and the PRC is set to host the ]. The enrollment of foreign students in mainland China has tripled to 110,000 from 36,000 over the past decade <ref>Harvard University </ref>, and the number of foreign tourists has also increased to 41.8 million in 2004 <ref></ref> <ref></ref>. ], being the ] in the world, is likely to increase the PRC's soft power, although the great majority of those who speak it, indeed live in China. The PRC has created 26 ]s around the world to teach its language and culture, and while the ] was cutting its Chinese broadcasts to 14 from 19 hours a day, ] was increasing its broadcasts in English to 24 hours a day <ref>Harvard University </ref>. | |||
| ''']''' - China has a long history spanning many thousands of years. It stood as a leading ] in Asia influencing its neighbors in politics, arts, philosophy, religion, and culture until the rise of the Western powers. <ref>CIA - </ref> <ref>John K. Fairbank, ''China: A New History'', Harvard University Press, ISBN 0-674-11670-4, p2</ref> <ref>Paul S. Ropp (ed.), ''Heritage of China'', University of California Press, ISBN 0-520-06440-2, p235</ref>. | |||
| '''Educational system''' - The PRC government has always put strong emphasis on developing a strong primary educational system. China has over a 90% literacy rate according to 2002 statistics.<ref>CIA </ref> China's youth (age 15 to 24) literacy rate is 98.9% (99.2% for males and 98.5% for females) in 2000.<ref></ref> The PRC has also put science and technology as priorities in its education.<ref>BBC News </ref> Such emphasis may explain the performance of mainland Chinese high school students in the mathematics, physics, chemistry, and biology areas of the ].<ref>The International Mathematical Olympiad </ref> <ref>The International Chemistry Olympiad </ref> <ref>The International Physics Olympiad </ref> <ref>The International Biology Olympiad </ref> | |||
| ] | |||
| '''] and cultural spread''' - Another important factor is the strong and economically influential ] around the world, especially in Southeast Asian countries like ], ], ], ], and throughout the ] and the Western world <ref>Asia Times </ref> <ref>Finnish Virtual Polytechnic </ref>. It is reported that there are more than 100 million overseas Chinese spreaded throughout the world. Some of these overseas Chinese (particularly older emmigrants from China) preserve their cultural identity and form communities in the host nations known as "]s", which help to raise awareness of Chinese culture in those foreign countries. ] also strongly influences and forms the basis of the regional cultures of ]. East Asian countries adopted much of the Chinese essence in ], ], and ancient ]. An example is ] - a philosophical thought originated from China - which holds a great influence on not only the Chinese but also the Japanese, Koreans, Vietnamese, and other East Asians.<ref></ref> | |||
| ==Points against== | |||
| ===Military problems=== | |||
| '''Military technology and power projection''' - PRC's military capabilities (technology and power projection) are still small compared to that of the United States (and the ] as a unit), whose military spending outstrips that of its next major competitors combined.<ref>Asiaweek </ref> The PRC has little force projection capabilities and lacks vital components of a blue water navy and a long range air force. For example, in terms of operational land-based ] systems, the USA possesses the most lethal strategic capability by far, as it has a more reliable arsenal and a massive numerical edge in ICBMs over the PRC. In space technology, the PRC is lagging behind United States' level of development, mainly because the latter had an earlier start in its space program. | |||
| Two major factors contribute to PRC's late remodernization campaign. For one, PRC's previous long-term dependence on Soviet-era military technology has produced a significant lag of indigenously produced hardware. It was not up until the 1960s ] that the PRC was forced to rely on their own scientists, rather than Soviet engineers to help modernize PRC's military technology. Furthermore, the surge of violence and bloodshed against intellectuals during the ] during this time period, resulted in a shortage of trained and skilled engineers to tackle the task of rebuilding PRC's army. These two factors combined help explain why PRC military hardware is not up to par with Western armies.<ref>EVAN A. FEIGENBAUM, "China's Military-Civilian Complex," New York Times, May 22, 1998</ref> | |||
| Malaysian strategic thinker Bunn Nagara has claimed that "The Chinese armed forces are technologically backward, compared even to the Russians -- which in turn are backward compared to NATO", while Sakanaka Tomohisa calls the "so-called Chinese military threat more psychological than real-world." <ref></ref> | |||
| ===Political problems=== | |||
| ] has been the theatre for several military confrontations between the PRC and the ] since the last days of the ] in ] when the ] forces led by ] retreated across the Strait and relocated its government on ].]] | |||
| '''Foreign affairs''' - The PRC has had some difficult relationships with some major powers. A major ongoing dispute is the ]. The PRC has threatened to use force to impose ] and to thwart any declaration of ]. Most countries in the world maintain diplomatic relations with the PRC and are obligated to follow its ], but the United States is obliged by the ] to help defend Taiwan should there be any invasion from the mainland. Therefore, a military conflict in the ] could lead to a confrontation between the People’s Republic and the United States, which could be devastating to both sides. Additionally, the United States is still suspicious of China's international ambition. <ref>The Age .</ref> PRC's relations with India, its large southern neighbour sharing a long and contentious border, are far from friendly. Apart from border disputes, the erstwhile ruler of Tibet was granted asylum in India, increasing tensions between these nations that led to the ] in ]. The PRC's nuclear capabilities and its close military ties with India's main enemy, the Islamic Republic of Pakistan, forced India to seek its own nuclear umbrella, although both India and the PRC have declared a ']' policy. | |||
| '''] of ]''' - Access to information is believed by some to be the key to the development of science and technological ideas<ref>The Information Warfare Site (U.S. Dept. of State) </ref> and PRC control over information may therefore hamper its growth in these areas. The PRC already places less strict control over the media in mainland China - an example being the growth of the Internet and the spread of increasingly commercially-driven media.<ref>Center for the Study of Intelligence (CIA) </ref> However, there are certain limits to such liberalization.<ref>The Christian Science Monitor </ref> For instance, censors are still blocking access to certain websites deemed "inappropriate" (e.g. politically sensitive, pornographic sites, etc.), including Misplaced Pages. <ref>Harvard Law School </ref> | |||
| '''] clash''' - Some of PRC's allies, particularly African and Latin American nations, are politically and/or economically unstable, which could lead to unexpected twists in foreign relations. The idea that the PRC supplied the technology for additional nuclear power to ] could make its relationships with nations like ], the ] and the ] more difficult. <ref> UCLA Asia Institute </ref> <ref>Pakistan Times </ref> <ref>MERIA </ref> PRC's "neutral" foreign policy acknowledges the right of every state to its own political system, with economic investment being beneficial to any foreign state regardless of internal affairs. Other countries have continually asserted the need for certain universal values and ideals, such as ] and ]. PRC's disregard for these considerations has led to criticism that its actions have the effect of sheltering repressive states such as ] and blocking effective action on ] in ].<ref>The Washington Post </ref> | |||
| '''Weak legal system''' - There has been a national debate about judicial independence in mainland China's closed political system. In mainland China, the government, not a court, is the final arbiter of law. Mainland China's court system is far from an independent entity that can curb government power. Instead, the courts often remain a pliable tool to reinforce that power (for instance, court rulings that favor state interests). Many judges are poorly educated in the law and are corrupt. Judges often must answer to government officials as much as to the law. Political pressure is common, and private trial committees often dictate rulings. Although there are signs of change, such as the emerging civic belief that ordinary people have "legal rights", such changes continue to meet enormous resistance within the system <ref>The New York Times </ref> <ref>BBC News </ref>. | |||
| '''] and ]''' - Western governments , human rights organizations, and groups within Chia have often criticized the PRC on its human rights record in mainland China and often use this issue to shape policies towards the PRC. For example, the US justifies continued resistance to lift its arms embargo against China, as well as that of the EU, based upon the issue of human rights. One prominent case of accusations of human rights violations comes from the ] movement, which claims that the PRC government persecutes its members in mainland China and campaigns outside of mainland China for an end to this. The government of the People's Republic sees Falun Gong an anti-national cult. These claims are not supported by the United States congress, who passed a resolution<ref> U.S. Congress (July 24, 2002) , ''Library of Congress'', retrieved July 31, 2006</ref> who have declared Falu Gong as a peaceful religion, and that the Ziang regime has created notorious government, creating '610' offices throughout the People's Republic of China with the special task of overseeing the persecution of Falun Gong members through organized brainwashing, torture, and murder. The CPC is engaging in suppressing information on the sect, including suppression of wikipedia (see ]). On the other side, several Falun Gong sympathetic media have criticized the CPC , and rejected their authority, suggesting that some prospect for political civil disobedience.There has also been unrest in the ] in the past, with calls for ] still a controversial issue.<ref>''Dateline'' SBS, 12 July 2006</ref> <ref>Jamyang Norbu </ref> <ref>University of Michigan </ref> | |||
| There have been other cases of oppression of religion in the country, such as creating obstacles in the way of the spread of ]. Christians in China assert that they have been persecuted for their beliefs and practices, such as being arrested for reading the Bible .The only legal Christian Churches (] and ]) in China are those under the ] control. Teaching in those Churches is importantly modified towards party's goals in its internal politics. By doing this they forced Christians to compromise their belief or the law to practice their beliefs (''see article on'' ]) with all the subsequent consequences for them. China's record on religious freedom remains poor, despite some improvements over the past 25 years<ref name=Wayne>,''United States Department of State''</ref>. United States Secretary Condoleeza Rice has designated China as a “country of particular concern” under the International Religious Freedom Act, which carries specific sanctions, such as barring China from consideration for certain types of aid<ref name="Wayne"/>. These issues are relevant to China's Emergence as an Economic Superpower and Its Implications for U.S. Business<ref name="Wayne"/>. | |||
| ===Economic problems=== | |||
| ], ] in western China, part of the ] strategy to bridge the growing economic gap between coastal and inner provinces.]] | |||
| '''] and uneven growth throughout the country''' - Mainland China still faces great difficulty in solving the mass unemployment problem in the urban and rural areas <ref>BBC News </ref> <ref>RAND Corporation </ref> <ref>Xinhua </ref>. Furthermore, although the eastern seaboard areas of mainland China have experienced a tremendous (often double-digit) economic growth rate and are major recipients of ] into the country, similar breakneck growth rate has been lacking in the relatively undeveloped western areas. To close the gap and to catch up with mainland China's wealthier eastern provinces, the government has initiated the ] strategy <ref>ALN </ref>, the ] initiative <ref>Asia Times </ref>, and the ] policy <ref>Chinese Government's Official Web Portal </ref>. | |||
| ]On a more micro-scale, there's also a big gap over urban-rural population wealth <ref>The World Bank </ref>. This great disparity in urban-rural income (on average, urban residents earned three times more income than their rural counterparts) <ref>Embassy of the People's Republic of China in the United States of America </ref> has caused concerns such as social discontent. 42 million mainland Chinese lived below the official poverty line in 1998 and 100 million lived on less than US$1 per day, a standard which is classified by the ] as ] <ref>The World Bank </ref>. However, the number of people living under the poverty line in the country had dropped from 250 million in 1978 to 29 million by the end of 2003 <ref>USA TODAY </ref>. The incidence of poverty in mainland China also dropped from 30.7 percent to 3.1 percent in the period <ref>China.org.cn </ref>. In response to the rural poverty, the government has taken steps such as abolishing the 2,000-year-old agricultural tax <ref>ABC News </ref>, exempting personal income tax for those receiving monthly income below 1,600 yuan <ref>BBC News </ref>, and increasing investments in rural infrastructure, education, and health services to boost consumption and development in rural areas <ref>BusinessWeek </ref>. | |||
| '''External dependency''' - The mainland Chinese economy has a great dependence on foreign trade and investments. Investment and export sectors collectively account for about 80% of mainland Chinese GDP and are still growing at close to a 30% annual rate. This is an unsustainable outcome for China (and the US on the consumption side of the global economy). Further sharp increases in investment are a recipe for capacity overhangs and deflation. Continued sharp gains in exports are a recipe for trade frictions and possibly protectionism in other countries. China is now proposing to tackle its excess saving and subpar consumption story with the same fervor evident when it went after other aspects of its growth and reform story during the past 28 years. Pilot projects already have been established in setting up a safety net, especially in the social security area; moreover, under the terms of China’s WTO accession, the opening of domestic services is likely to accelerate over the next 3-5 years, thereby relieving some of China's external dependency. <ref>Morgan Stanley </ref>. | |||
| '''Currency valuation''' - In response to mainland China's ballooning ] with the West, Western governments assert that its currency (see ]) is currently greatly undervalued <ref>Association for Asian Research </ref>. Some also assert that the PRC government has unfairly manipulated the yuan exchange rate <ref>Forex Blog </ref> <ref>Milwaukee Journal Sentinel </ref>. When the currency is thoroughly revalued, it is possible that the outsourcing of jobs to mainland China would lessen somewhat. While a stronger currency is a concern for mainland China's manufacturing industry, a positive effect could see the reduction of mainland China's over-reliance on foreign trade and investments as the current main engine for its economic growth. It will thus cause domestic consumption to increase its role in fuelling the economic growth. This type of growth would be more stable towards external economic conditions and sustainable for longer periods of time. In 2005, the share of domestic consumption in mainland China's overall GDP has fallen to slightly less than 50%, significantly below the U.S. share of 71% (most other industrialized nations such as the ], ], and ] have shares of around 60-70%) <ref>Morgan Stanley </ref> <ref>Morgan Stanley </ref>. | |||
| '''Trade imbalance''' - Mainland China's overall trade surplus has increased dramatically in recent years creating an imbalance in the world economy. For example, mainland China keeps a ] of US$200 billion with the United States <ref>U.S. Census Bureau </ref>. However, products that are labelled ''Made in China'' are not necessarily developed or designed in mainland China. In fact, 60% of mainland Chinese goods that are exported come from overseas-invested factories, according to PRC customs data (] and ] are considered overseas and separate from mainland China in PRC economic data) <ref>BusinessWeek </ref> <ref>Asia Times </ref>. Mainland China has become a focal point for ], where final products are assembled and/or tested, but not manufactured there. The main components are often imported from other countries. Thus, despite mainland China's huge trade surplus with the West, it has a ] of US$137 billion with Asian countries (Taiwan: US$58 billion, South Korea US$42 billion, Japan: US$16.5 billion) <ref>CFO </ref> <ref>The Washington Times </ref>. | |||
| '''] violation''' - The "epidemic" of ] in mainland China is spreading. For instance, U.S., European and Japanese companies had reported combined losses to mainland Chinese piracy of at least US$60 billion in 2003 <ref>U.S. Department of State </ref>. Piracy in mainland China is rampant and negatively affects everything from computer software and pharmaceuticals to clothing, auto parts and chewing gum. It affects both mainland Chinese and foreign IPR holders, and is a growing concern for major trading partners such as the United States and the European Union. Such IPR violation may reduce mainland China's creative power potential and hold back mainland China's own innovators and entrepreneurs <ref>U.S. Department of State </ref>. | |||
| '''Deteriorating environment''' - As a result of previous and current growth-at-all-costs strategy, mainland China's environment is in a state of serious degradation. Soil erosion, desertification, air pollution, loss of arable lands, and steady falling of ] especially in the north are serious problems and are estimated to cost the mainland Chinese economy billions of dollars per year. Water is already a scarce commodity in mainland China (especially in northern arid regions) where per capita water supplies are less than a quarter of the world's average. Pollution from coal causes over 250,000 deaths annually. By 2020, it is predicted that mainland China will account for up to 19 per cent of global carbon dioxide emissions. <ref>The Age </ref> To respond to these problems, the PRC government has embarked upon a number of projects such as ] project (planting billions of trees to hold back desertification) and building canals to divert water from water-abundant southern regions to arid northern regions. | |||
| '''Economic crimes''' - Due to the lack of openness of the mainland Chinese society in general, economic crimes such as corruption and collusion have become rampant among party and government officials, and this may hinder mainland China's economic growth and hurt the confidence of investors. <ref>FAS </ref> Combined with worsening social problems in mainland China (due to wide urban-rural income gap), there have been growing social discontent and about 87,000 big and small-scale demonstrations occurred throughout mainland China in 2005.<ref>The Age </ref> Most of these discontents are not political; rather they are due to economic reasons. Peasants for example, are being forced to leave their land and are compensated poorly. Their confiscated lands are then sold at a much higher price with the local officials keeping much of the profits.<ref>The Guardian </ref> <ref>People's Daily </ref> | |||
| '''] and academic quality''' - In some technology fields, mainland China is still behind its counterparts such as the United States, Russia and the European Union, and lacks in the number of leading world-class research scientists.<ref>World Economic Forum </ref> <ref>NPR </ref> Furthermore, despite the large number of university graduates produced in mainland China every year, only a relatively small fraction has sufficient quality or professional experience to work in multinational companies (MNCs).<ref>BusinessWeek </ref> <ref>People's Daily </ref> The Chinese government is trying to address the problem by giving massive injections of governmental funding into mainland Chinese universities and hopes to transform them into world-class institutions. These funds are intended for attracting top foreign-educated and overseas-born Chinese, building cutting-edge research centers, partnering with the world's best educational institutions, and developing new programs taught in English.<ref>Asia Times </ref> | |||
| ===Demographic problems=== | |||
| ] | |||
| ''']''' - A side effect of the One-child policy is mainland China's rapidly aging population, although this may stabilize over time. It is predicted that by 2020, 25% of mainland China's population will be considered retirees, so they cannot contribute to the work force. This could disadvantage its economy, but on the other hand many feel uncontrolled population growth is not a feasible option either. Although officially banned by the central government, local authorities - under the pressure of job promotion - sometimes committed forced abortions in order to enforce the One-child policy. Cultural preference over sons has also encouraged gender-based abortion including female infanticide, despite it being illegal in ]. If trends continue, there will be 30-40 million more men of marriageable age in 2020 than there are women.<ref>The Age </ref> | |||
| ===Cultural problems=== | |||
| '''Loss of history''' - The ] which China experienced in the 1960s-70s had devastated a significant part of China's historical and cultural relics. In the modern times, the government has tried to revive traditional Confucian values (political catch-phrase: "harmonious society") and embarked on public initiatives to protect and preserve Chinese cultural heritage as well as historical artifacts. However, more often than not, such initiative comes head-to-head against China's desire to modernize itself rapidly. For instance, traditional ]<ref>TIME </ref> (in ]) and ]<ref>, July 22 2006, Howard W. French, A Glimpse of the World </ref> (in ]) homes are being demolished at an alarming rate to make way for modern developments such as high-rises and wide boulevards. Even when buildings are designated as protected or historic sites, they can be knocked down in the frenzy of development. Local officials often collude with private developers or accept bribes. The encroachment of globalization (especially Western culture) has also resulted in the fading of Chinese traditions.<ref>Asia Times </ref> The impact of such loss on the society is debatable although the pursuit for raw materialism over the past few decades have left a spiritual void among the Chinese. As a result, many Chinese today are interested in rediscovering their connection with the past.<ref>Asia Times </ref> | |||
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