Opinions - 14.03.2014 - 00:00 

China’s challenges

<br/>China is growing – and must grow. The enormous economic growth that has characterised the regions in China’s east throughout the last 30 years must now continue its success story in the interior of the country, writes HSG lecturer Josef Mondl.<br/>


14 March 2014. China’s new leadership has clearly set out the framework conditions in the current Five-Year Plan (2011-2015): in order to be able to guarantee the efficiency of the Go West campaign (initiated in 1999), 11 new economic zones were defined for the 12 provinces of Central and Western China, with about 40% of the GDP of Western China being generated in the West Triangle Economic Zone with the centres Chengdu (Sichuan province), Chongqing (direct-controlled municipality) and Xi’an (Shaanxi province) with an overall surface of 220,000 square kilometres and a population of approx. 118 million.

The country’s government is facing the complex challenge of having to administer and control two different worlds in one country: along the coastline in the East, the country is already highly developed and displays the amenities of a post-industrial society – here, people no longer need an economic growth rate of 10%; rather, they want healthy foodstuffs, clear air and pure water. At the same time in many regions in its interior, China has remained a developing country with hundreds of millions of people who still subsist in poverty – for people who still live from hand to mouth, transparency is usually of secondary importance.

The most urgent problems

The supply of safe foodstuffs, the pollution of the environment and sometimes the gross negligence displayed by officials constitute a broad front of challenges for the credibility and legitimacy of the regime. Healthy air for Beijing and other big Chinese cities, clear and pure rivers, as well as the creation of a sense of responsibility in local officials represent long-term goals; but in view of the milk scandal which shook China to its very foundations in 2008, the issue of food safety is of the greatest everyday significance and is being watched with increasing anxiety by the growing middle class, in particular, whose support President Xi Jinping and his colleagues need. Thus in the short and medium term, the crucial yardstick for the country’s new leaders will be the way in which they deal with these social and human problems.

What could China’s political structure look like in the future? Past experience shows that a high degree of urbanisation, a strong middle class, the impact of information technology, a strong currency and a stable civil society exert decisive influences on the political landscape. Thus here, too, China’s further development might well lead to more pronounced cultural and political diversity. At the same time there is a danger that the enormous economic disparities between town and country, the high degree of corruption, dissatisfaction among the rural population and the continuing destruction of the environment might unsettle the political system and the country’s stability and lead to prolonged chaos.

The economic engine must run

If China succeeds in implementing the success model of the first stage of the policy of reform and opening up (1979-2003) in the next step, too, this would lead to a new political economy characterised by innovation, growing domestic consumption, successful value creation in production, the creation of a sufficient number of jobs in the cities and the promotion of the service sector.

Failure, however, would result in increasing unemployment, social unrest, political instability and thus a dramatic decrease in economic output, which would force the government to engage in long-term crisis management.

Photo: Photocase / kallejipp

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