According to an article from the Wall Street Journal two weeks ago, China will face three major problems in the coming years. The problems involve: the nation’s changing demographics, the increasing strain on energy and environmental resources, and widening social inequalities between the rich and poor.
On China’s growing top-heavy demographics, the article offered:
The precedents aren’t encouraging. Many developing countries in Latin America and the Middle East stagnated after periods of rapid growth. Economists sometimes call this the “middle-income trap” because so many countries have failed to achieve consistent growth that would deliver higher prosperity.
In the next few years, China will cross the threshold to a majority-urban society. China’s urbanization rate is about 40% to 45% now, well below levels of about 75% in most of Western Europe and Latin America, but statistics show that growth in China’s urban population is already slowing
The “demographic dividend” from a young and growing work force may have been responsible for a quarter of China’s growth to date, says Wang Dewen, a demographer at the Chinese Academy of Social Sciences. In the future, he and other scholars argue, China will have to grow by making more productive use of fewer resources — working not just harder, but smarter.
Regarding the increasing strains on energy and environmental resources, the Wall Street wrote,
China’s growth has depleted global supplies of energy and raw materials, as well as its own resources of clean air, fertile land and drinkable water. Without improvements in efficiency, China’s expansion will be constrained by the finite supply of such essentials. In recent months, the nation has been plagued by shortages of gasoline and electricity, illustrating the limits to its consumption.
So far, China’s government is falling behind in its drive to cut the amount of energy required to produce each yuan of economic output. It managed a reduction of just 2.9% in the first half, less than last year’s 3.7%. Economists say China’s low state-set prices for energy need to become more market-based to create pressure to conserve
Regarding the growing social inequity, the paper explained:
Just 30 years after it began moving away from socialism, China has become one of the world’s most unequal societies, based on measures of the gap between richest and poorest.
Addressing that will require repairing a dilapidated network of social services — something the government says it is working on.
“The party will need to take itself on in very difficult ways to address this issue,” says Minxin Pei, a China scholar at the Carnegie Endowment for International Peace in Washington. Addressing inequality “will be a wedge issue among the ruling elites — not just an issue that divides the haves and the have nots.”
What do people feel is the prospect for China’s developments in the coming years?
I am particularly worried about the demographics. Japan is facing a long-term stagnation partly because of its top-heavy demographics. Will China succumb to the same fate? I am also concerned that the environmental problems will only aggrevate the problem – as old people develop diseases associated with excess pollution.
Energy and resource limitations are definitely another concern. There is no way for China to industrialize the same way of the West. The burden on global resources will be too great. Will China become energy efficient in time? Will technology be China’s savior? Will intelligent urban planning do the trick? Or will Chinese learn to live happily with less resources per capita?
Finally – social inequity. Is China about to explode or are things under control? What can be done to reduce this gap? Will the Chinese become fatigued from the almost single-minded focus on economic development that has dominated the national psyche for the last 30 or so years?