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China on the Rise

Image from the Economist

For years now, we’ve been warned of the “rising dragon”, China’s inevitable rise to superpower status. These warnings have come packaged with dire predictions and changing estimates of when the country will overtake the U.S. economy. These predictions have been made for centuries. Even Napoleon famously said of China, “Let her sleep, for when she wakes, she will shake the world.” Now, China has risen from its slumber, more awake then ever.

Last week, it was announced that after four decades of being the world’s 2nd largest economy, Japan would most likely lose the status to China this year. But what does all this mean? Only talking about China’s growing foreign reserves, the increasing power of its companies, and rising clout in the international arena overlooks some key realities. Yes, China has made incredible strides in domestic economic growth and its business and financial sectors. While doing all this, China has firmly held to its tenets of capitalism with “Chinese characteristics”. But, while we listen to all these ambitious predictions, we should keep some sobering facts in mind.

* Will China grow old before it gets rich? China’s one-child policy, while successful in managing its population growth has given birth to new problems. Basically, there will be one child to support a set of parents, or one couple to support four parents. This could be a huge drain on the smaller labor force.

* The Minorities Issue As we’ve seen in the past couple years, the violent protests in Tibet in 2008 and the conflict in Xinjiang last summer illustrate the problems China faces in its minority-populated provinces.

* Social Conflict Some predict that as the Chinese become wealthier, they will begin to demand individual, political rights. Whether or not this is true, China’s middle class serves as an enormous source of potential conflict. If the economy were to hit a rough patch and employment became a larger problem, growing resentment in Chinese society would become  a source of great concern for the government.

The most important thing to keep in mind is the multi-faceted nature of China’s rise. There are no guarantees in this world. Let’s  look beyond the headlines.

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Categories: Uncategorized
  1. Emily B
    February 24, 2010 at 4:14 pm

    Beware of the Dragon!!

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