Current Challenges to China - Moving-Forward-from-Crises-2

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Dec 11, 2013 (3 years and 5 months ago)


Current Challenges to China

Session 6


Imbalance between Economic Great Leap
Forward & Stagnation of Political Reform

Imbalance between the Rich & the Poor

Imbalance between Wealth Increase & Integrity

Imbalance between Economic Growth &
Environment Deterioration


I. Imbalance between Economic Great Leap
Forward and Stagnation of Political Reform

GDP has grown at an annual average rate
of 9.5 % from 1978 to 2010

China becomes world’s second largest
economy in 2011 (10

in 1978)

Largest exporter, second largest importer,
second largest trading nation in the world
in 2011

Foreign exchange reserves: $3.2 trillion
(Mar 2011; ranked
) (2.3 billion in 1978)

Political Reform

Political stability is the priority

The Tiananmen Square Incident’s impact

No independent judiciary

No independent media

Corruption in China

People's Republic of China

from widespread
. For 2010,
China was ranked 78 of 179 countries in
Transparency International's

Perceptions Index


In 2009, according to internal Party reports,
there were 106,000 officials found guilty of
corruption, an increase of 2.5 percent on
the previous year. The number of officials
caught embezzling more than one million
yuan (US$146,000) went up by 19 percent
over the year. With no independent
oversight like NGOs or free media,
corruption has flourished.

Xi Jinping and Barack Obama: two leaders facing very
different crises

Bloomberg investigation

estimated the total private wealth of
incoming president Xi's family at close to
$1bn. A New York Times inquiry put that of
outgoing premier
Wen Jiabao's family at
about $2.7bn
. The news agency has also
reported that relatives of disgraced
politician Bo Xilai accumulated at least
$136m in assets.


Timothy Garton Ash

The Guardian
, Wednesday 7 November 2012


Zheng Xiaoyu

Zhèng Xiǎoyú; December 21, 1944

July 10,
2007) was director of the
State Food and
Drug Administration

of the People's Republic
of China. He was sentenced to death in the
first instance trial


No.1 Intermediate

on May 29, 2007.

He was

on July 10, 2007 for corruption

and possibly
tainted products in
Mainland Chin


Lai Changxing,
"China's most wanted
fugitive." Within a decade he was the
country's biggest private car importer. He
imported foreign products like cars,
cigarettes and was responsible for one
sixth of the national oil imports at one

The smuggling ring fraudulently avoid
US$3.6 billion in taxes and fees


Lan Fu

is a former deputy mayor of
Xiamen Municipality
. He was
convicted in 2000 on corruption charges
related to a
6 billion smuggling
racket and is currently serving a life
sentence in prison


Chen Liangyu, major of Shanghai and a
member of the
, was
sentenced to 18 years in prison for
accepting $340,000 in bribes

Wen Jiabao’s talk at a news conference following the
close of the National People's Congress, March 14, 2012

New problems arise, including income disparity, lack of
credibility and corruption, and to resolve these problems
requires economic reform and political reform,” he
insisted. “This is an urgent task.”

"China has come to a critical stage," Wen said. "Without
successful political structural reform, it is impossible for
us to fully institute economic structure reform. And the
gains we have made in this area may be lost. New
problems that have cropped up in China's society will
not be fundamentally resolved. And such historical
tragedy as the Cultural Revolution may happen again."

The China’s 18

Party Congress

Corruption could cause” the collapse of
the party and the fall of the state.”

China’s development is “unbalanced,
ordinated and unsustainable.”

Hu Jintao,

Party Secretary

Consequences of Corruption

Corruption undermines the legitimacy of
the CCP, adds to economic inequality,
undermines the environment, and fuels
social unrest.

“mass protests”

more than 180,000 in

Historic stakes are higher in China than in US


As Kenneth Lieberthal of the Brookings Institution put
it during a Hong Kong debate organized by
Intelligence Squared

arguing against the motion

“China Picks Better Leaders than the West”

“You look at any mature democracy, and
no one worries about the stability of the
system… They worry about individual
leaders, they worry about particular policies,
but the system is stable… In China, they
worry about the stability of the system every
single day.”

Discussion 1

Why didn’t China’s economic progress
bring corresponding political reform?

II. Imbalance between
the Rich and Poor

Gap between the urban and rural areas

Gap between the costal China & inner

Gap between the rich and poor

Physical map of China

II. Imbalance between the Rich and Poor

Gini index of China

According to the data publicized by World Bank,
the Gini coefficient in China has increased from
0.16 before Reform and Opening policy was
introduced to 0.47 at present. It has passed 0.4
the warning line and is higher than all the
developed countries.

According to World Bank's report, only 29
countries' Gini coefficient are higher than China but
27 are from Latin America and Africa. Only 2 are
from Asia and they are Malaysia and Philippines.
What a grim situation!


The Chinese Luxury Consumer White Paper
2012, released on Tuesday, suggested that
there are 2.7 million high net worth individuals in
China with personal assets of more than 6
million yuan ($950,000).

There are 63,500 ultra
high net worth individuals
with assets of more than 100 million yuan, an
increase of 10 percent compared with last year.


12 million people were considered as
urban poor in 1993, i.e. 3.6 per cent of
the total urban population, but by 2006
the figure had jumped to more than 22
million, i.e. 4.1 per cent of the total
urban population

Migrants (130 million migrants


90% of poverty in China is still in rural

In 2009, according to the China’s
National Bureau of Statistics, the urban
per capita annual income at US$2525
was approximately three times that of
the rural per capita annual income

A City School

A school in the


“Wealth Drain”

nearly 60% of people who have more
than 10 million yuan ($1.53 million)
claim that they either consider
emigration abroad (47%) or have
completed the process (27%).

III. Imbalance between Wealth
Increase and Integrity Decline

Since 1978 400 million people have been lifted out
of poverty in China

about 75 percent of the
world's total poverty reduction over the last century.

Lawrence Summers has recently pointed out that
during the Industrial Revolution the average
European's living standards rose about 50 percent
over the course of his lifetime (then about 40
years). In Asia, principally China, he calculates, the
average person's living
standards are set to rise by
10,000 percent in one lifetime!

Newsweek, Issue 1, 2008


In 1990, China’s average per capita national income
was around $350. Within a decade, there was a
threefold increase, taking the figure to $1,000. At the
end of 2008, the figure tripled yet again and China’s
average per capita
national income

reached another
high of $3,000. Per capita GDP (2010): $7,600
(purchasing power parity)

US Dept. of State

If China’s average national income continues to rise at
an annual rate of 8%, the country’s per capita income
will reach $8,500 by 2020 and will touch the $20,000
mark by 2030. Hence, China’s
average per capita

will exceed the current income of Taiwan and

A child receives treatment for kidney
stones after consuming tainted milk


or thin voxel, is
logarithmic species
are mainly used to

growth of lean meat

Little Yue Yue

Does the death of Xiao Yueyue tell us
something about modern China?

Xiao Yueyue was a 2 year
old girl ran over
by two cars and ignored by 18 people
before someone came to help her. She
later died of her injuries.

“How can I be proud of my China if we are
a nation of 1.4bn cold hearts?”

Lijia Zhang

Fang Zhouzi:

Anti academic

Discussion 2

Why did people’s integrity decline while
their material wealth increased?

IV. Imbalance between Economic Growth &
Environment Deterioration

“Made in China” is the largest brand
product in the world, which made China
the second largest economy globally.

What is the cost of this economic

Land Challenge to China

Only 7 % arable land supports 20 % population of
the world

28 % of its territory turned to desert

An estimated 100 square miles of land is lost to
desert per year

400 million people are adversely affected by

Sandstorm brings 330,000 tons sand to Beijing
one night in April 2006

Water Challenge to China (2)

Water Resources:

With 20% of the world’s population but only 7% of global
water resources (China has only one
fifth as much water per
capita as the United States).

More than half of China’s 660 cities suffer from water
shortages, affecting 160 million people.

The per capita water volume in China is one fourth of the
world average.

90% of cities’ groundwater and 75% of



As a result of widespread water pollution, 700 million people
drink contaminated water every day.

Energy Challenge to China (3)

Energy crisis:

China’s development is a powerful driving force behind
the global economic growth. In 1990
2002, China was
placed first, with a contribution as high as 27.1%.

China has passed the U.S. to become the world's biggest
energy consumer in 2010.

Climate change leads to rise of sea level. A one
rise in sea level would inundate 92,000 square kilometres
of China’s coast, thereby displacing 67 million.

Only 1 percent of the country’s 560 million city inhabitants
(2007) breathe air deemed safe by the
European Union

The U.S. is also by far the biggest per
capita energy
consumer, with the average American burning five times
as much energy annually as the average Chinese citizen.


On average
Chinese steelmakers

use one
fifth more energy per ton than the estimated
international average. The World Bank says
that cement manufacturers need 45% more
power and ethylene producers need 70%
more power than producers elsewhere.

Greenhouse Gas

In 2008, China surpassed the United States as the
largest global emitter of greenhouse gases by
volume. (On a per capita basis, however,
Americans emit five times as much
greenhouse gas as Chinese.) The increase in
China's emissions is primarily due to the
country's reliance on coal, which accounts for
over two
thirds of its energy consumption. It
contributes to sulfur dioxide emissions causing
acid rain, which falls on over 30 percent of the

Energy Footprint


Environment pollution and related
health issue cost China 9 % of the
annual income in 2008,
World Bank

The government received six hundred
thousand environment
complaints in 2006, a figure that has
risen roughly 30 percent each year
since 2002.

The Chinese Are Coming

Discussion 3

Can China’s economic development
model be sustainable?


Deng’s Economic Reform overcame the critical crisis
of Mao’s era, and restored the legitimacy of the
Chinese Communist Party. After the efforts of only
one generation, China made a historical miracle
and made China the second largest economy.
However, rapid economic growth has brought a
series of problems: imbalance between economic
increase and political stagnation; imbalance
between the rich and poor; imbalance between
material wealth growth and integrity declination;
imbalance between economic development and
environmental deterioration. China faces a new
critical crisis domestically.


Xie Xie

Zai Jian