China has become the 2nd largest economy in the World today; and will become the largest if the government and people maintain there pact -”authoritarian one party rule in exchange for rapid economic development”. Takethe5th will link to articles that illuminate the progress China is making towards achieving that end. This first article originates with Marketwatch and of course deals with the economic challenges faced by China. It is very ironic that Marketwatch is calling for an often much maligned “social safety net” for China.
After an unprecedented three decades of 10% annual growth in gross domestic product (GDP), in which hundreds of millions of its people were lifted out of poverty as the country became the workshop of the world, China faces a more difficult second act.
Its government must spread the wealth beyond the great coastal cities of Beijing, Shanghai, Guangzhou, and Shenzhen to deep in the interior. It must find work for its young people while providing for a growing number of retirees. It must encourage people to spend more and save less to “rebalance” the economy away from exporting and towards domestic consumption.
How the Communist Party-run government handles this transition will determine whether it will retain the support of the Chinese people, despite its inherently undemocratic nature, and avoid the social upheavals that are the bane of all authoritarian states. It will also decide how great a power China will become. …. China needs to develop a stronger social safety net, raise incomes in the rural areas, and boost employment in the service sector. We certainly saw evidence of the latter on our trip. A growing army of hotel and restaurant workers serve tens of millions of visitors from inside China and abroad.
The safety net is key. Right now, many Chinese retire early — often with government pensions. But by 2015, there will be some 200 million Chinese aged 60 and over and a shrinking population to support them, thanks to the one-child policy instituted in 1978. With the Communist-era benefits dismantled, Chinese feel they must save more to take care of living and medical expenses in their old age.
The article provides an on-the-scene view of some of the major current economic and political issues percolating in China. Well worth the read.