Free Essay: Problems Facing China’s Economy
China has maintained an average growth rate of about 8% since 1978. According to the Western Standards, this is an amazing rate. This is because, major economies like the U.K has registered a growth of 2.5%, making it a contrast. However, despite this commendable growth over the years, China grapples with an array of challenges. In this paper, we shall discuss leading problems that face China today.
The first problem is pollution. This is a huge problem in China’s industrialized cities. Of great concern is the record highest in car ownership, leading to smog from automobiles. This greatly affects the quality of China’s air. There is limited control of pollution, with untreated and raw sewage finding its way into rivers. Thus, the lives of Chinese are at stake. Diseases, which stem from massive pollution are looming.
Another major problem in the world’s second populous nation is shortage of electricity. The high economic growth in China has resulted into high demand for electricity, straining the already overwhelmed infrastructure. Consequently, there have been efforts to curb this, by initiating power projects like the Three Gorges Dam. Nonetheless, this has left the public disappointed as the project has grave effects on the environment. Environmentalists have raised a red flag, saying the dam, will ham natural habitat for many species.
Another problem facing China is the growing disparity between the poor and the rich. In particular, the country’s economic growth has mainly favored south and eastern regions, leaving vast majority in extreme poverty. While this is the case, the Northern part of China lags behind. Here, farmers struggle to make ends meet, forcing many people to migrate to the southern region. Even though China has engaged various efforts to deal with this, it is clear that the problem is far from ending.
Property boom also faces China. Experts argue that China is trapped into its projected property boom. For example, Beijing and parts of South East have witnessed exponential rise in house prices. The fear is that this could burst, breeding negative equity for the economy. Like many other developing nations of the world, China too struggles with the problem of unemployment. This sounds ridiculous, having in mind that the country has recorded an economic growth of 8% for decades consequently. In explaining this, economist say China still has many state owned enterprises, which hurt the country’s economy because they are highly inefficient. Because of privatization and modernization, most of the workers in these firms are left jobless. Unemployment is also high in the agricultural sector.
Furthermore, China’s inefficient banking sector is not only a problem but also a major concern. The sector has a history of creating bad loans, which end up hurting the economy. According to statistics, many loans in banks go unpaid. This has been seen blamed on the government’s interference with the industry. Despite these challenges, China’s economy is promising, with opportunities. To achieve some of the targets, China has no otherwise but to fix major problems plaguing its progress. In recent years, it has expanded its foreign investment, especially in Africa, posing a threat to Western nations, which have dominated Africa’s international relations.
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