Impossible Challenge for China

Impossible Challenge for China

The 21st century is perceived to be the Asia Pacific century, which is a connotation to imply that the 21st century will be dominated by Asia Pacific countries, especially China, which is poised to be the next superpower. As of May 15, 2013, the United States of America was still the world’s No. 1 economy with China being second. The past century was marked with advancement in trade, warfare, energy, education, and information technology. Despite these developments in China and the rest of the world, the United States stayed at the top of the world. There were several projections that China would surpass the U.S. economy, but this will not materialize soon due to a number of factors ailing China’s political social and economic development. While China may surpass the United States in terms of purchasing power parity in a few more years to come as projected by Organization for Economic Cooperation and Development (OECD) in 2012, the U.S. economy will still remain the dominant force. The United States will continue to be competitively ahead on most political and economic indicators related to the living standards and quality of life. Although China has the biggest population of 1.3 billion people, it is still not close to surpassing the U.S. economy in the near future. This essay focuses on China as a widely cited threat to the global position of the United States outlining the reasons why the U.S. will still sustain its competitive advantage in the future. There are several factors undermining the country’s economic development mentioned in plagiarism free essay. Among them are illiteracy, communism, resource depletion, language barrier, unfavorable demographic trends, polluted environment and persistent internal discontent.

Factors Undermining the Superiority of China on the Global Scale

China is a capitalist country still dominated by the structures and policies of the communist party. China is a one party state and this comes with quite a number of challenges at both national and global fronts. Due to globalization, local businesses are transformed to meet global demands. One of the critical aspects of international trade and cooperation under globalization is democracy. For countries to trade freely and form pacts, decision and choices have to be made through free and fair electoral processes. Whatever happens at the international level should be replicated or mirrored internally and vice versa. This aspect makes the United States have an upper hand in creating and sustaining international relations with other states. Such relationships translate to trade and military blocks. Consequently, the United Stated continues to enjoy a larger market share for its export of products and services. Communism also creates a huge gap between the rich and the poor. China’s communist policies led to inequitable distribution of resources in the country leading to displacement of over 40 million citizens in the process of economic development. This was marked with various demonstrations and riots which affect its overall growth and global picture. Furthermore, the anti-Japan protests in China resulted in Japanese industry reducing its investment in China by shifting investments into Southeast Asia. For instance, at the end of October, 2012, Nissan announced to be moving to Southeast Asia market. Such trends continue to topple China’s economic growth and effort to be a superpower. A superpower should be able to address such a social problem within a very short period of time, which is yet to be realized. The functional disputes that marked the preparation for the transformation of the Communist Party leadership in 2012 also negatively impacted on the country’s bid to be the world’s superpower. Political disputes and functional scandals would affect policy formulation and governance. Political instability is a decrementing factor in either social or economic aspects of development. The United States enjoys political stability which lays a stable foundation for both social and economic development.

The Communist Party is also characterized by censorship of information and political speech, especially on the internet. According to Reporters Without Borders, China is perceived to be having very low level of freedom index in the world. That is, as of 2013 it is ranked173 out of 179 sampled states. The Communist government still suppresses demonstrations of grieved individuals and organizations as a means of quelling what is perceived as a threat to social stability. A powerful and pervasive media control also affects the country’s market forces. The communist government is regularly criticized by non-governmental organizations (NGOs), as well as foreign governments such as the United States. Such alleged valuations include torture, forced confessions and detention without trial. Moreover, some liberal Chinese politicians and scholars have advocated for democratization which is strongly opposed by more conservative fellows.

Another factor undermining China’s chances of becoming a superpower in the future is language limitation. Official language in China is Standard Chinese. Other recognized regional languages include Zhuang, Mongolian, Tibetan and Uyghur. Communication plays an important role in all aspects of human activities. Central to communication is a common language. China is limited at the global scale by the fact that English, which is a widely used language of communication in the world, is the country’s secondary language. Most countries transact business operations in English. English is also a mostly accepted language in industries such as mining, education, automotive, medicine insurance, banking and aviation. The United States has leverage over China in reference to language because of its racial diversification. Some of the languages spoken in the U.S that have popularity in other continents include Spanish, Italian, and French. Most Chinese would need a translator to transact with other people. This limits the speed and efficiency in communication with other parties in the global economy.

Another limiting factor is illiteracy level as compared to the USA. As of January 2013, the U.S had a literacy level of 99.0% as compared to 90.0% in China. Evans compares a single skilled worker in the United States to four Chinese workers in manufacturing sectors. This is owed to free and compulsory education in the United States. The United States also has intensively invested in Research and Development as compared to China. The U.S. army and most of the U.S. based companies such as McDonald’s and Wal-Mart are characterized by strong R&D capabilities. This gives most of the American entrepreneurs an upper hand in the global market. China is also disadvantaged by the fact that the U.S. holds several intellectual rights in pharmacy, Information Technology and aviation. These rights exist in the form of trade names, patents, copyrights and trademarks. For example, Apple, Microsoft and Oracle are American firms.

China is also facing energy challenges. Despite being the world’s fastest growing economy, its economy is highly energy intensive and inefficient. In 2010, China became the world’s largest energy consumer. In spite of technological advances in the energy sector, 70 percent of its energy needs rely on coal. Extensive use of non renewable source of energy such as coal has led to emission of large quantities of carbon dioxide to the atmosphere, which is responsible for ozone depletion and global warming. China is also characterized with lax environmental protection and regulations, leaving China among 20 of the world’s most pollute cities. According to the Ministry of Water Recourses, nearly 300 million citizens do not have access to clean drinking water, and by the late 2011, two fifths of China’s rivers had been polluted by agricultural and industrial waste.

China’s currency is also argued to be undervalued as compared to the U.S. dollar. In fact, most of the international transactions between China and other countries, for example, African states are settled in the U.S dollars. This gives the United States a competitive advantage over China in terms of financial settlements. The United States also enjoys its long term relationships with the members of the World Trade Organization. The People`s Republic of China (PRC) is also limited by the rapid expansion of debt as cited by Fitch Ratings. As of 15 May 2013, PRC was downgraded by Fitch Ratings from AA- to A+ as a result of underlying structural weakness. According to various economic analysts, the debt is seen as China’s critical economic risk. This degrade assumed that there would be no considerable geopolitical conflict, for example, a territorial conflict between China and Japan or an outbreak of war on the Korean Peninsula due to prevailing North Korea’s military threats to the rest of the world. Territorial conflicts adversely affect China’s global position since it largely relies on export trade. For example, the North Korean crisis which Beijing has been heightening behind the scenes, is affecting the net exports from China. This is characterized by border closures. China’s regional trade with South Korea is also affected since the Pyongyang’s regime seems to be targeting South Korean economy through threats. Given that South Korea is a globalized economy, due to the fact that North Korea is disrupting trade in the south, the network with China, Japan and the rest of the world is affected hence affecting China’s growth.

The People’s Republic of China is also making itself an adversary for its crucial trade partner, the United States. According to James Clapper, the director of National Intelligence, China has been central in the Advanced Persistent Cyber attacks (APTs) targeted on the U.S. infrastructure and financial institutions. PRC has become the United States` number one cyber threat. This has led to diplomatic wrangles between Beijing and Washington, which is unhealthy for China’s growth. It is a bad picture for China to be named by its key customer as a threat to its security and infrastructure. Chinese subtle and hostile diplomatic policies with the U.S. are also pushing its economy to the edge during this period of geopolitical risks and economic fragility. For example, its financial support to Zimbabwe contravenes the U.S. business policy. The impact of a disruption on the global village is adverse, as experienced during the 2008/2009 financial crisis. Therefore, China’s policy makers should open up to the rest of the world to minimize the possible damages in the event of repeat of the same. China exports $2.021 trillion of its products (17 percent is exported to the USA). Its sour relations with the U.S make its economy vulnerable to other economic hurdles.

According to research conducted of the Heritage Foundation, China faces a high unemployment rate of 27.1% as compared to 14.0% in the U.S. This translates to poverty and poor living standards in China. Poverty is the root cause of most social problems in China. For example, poverty has led to the emergence of street families and mushrooming of substandard housing outside cities such as Shanghai. Such dwellings lead to increased rates of crimes and the spread of diseases. Instead of the government investing in the key sectors of its economy, it is forced to strain its budget and cater for such issues. China also has life expectancy of 74.840 years as compared to 78.490 years in the U.S.

There are several factors undermining the China’s economic development and superiority on the global scale. Among them are illiteracy, communism and hostile diplomatic policies, resource depletion, poverty, language barrier, unfavorable demographic trends, territorial conflicts, polluted environment and persistent internal discontent. While the Chinese economy may be projected to surpass the United States on the basis of the Purchasing Power Parity (PPP) in less than a decade, the U.S. will continue to dominate on most indicators pertaining to security, education, the quality of life and living standards. However, China’s aggressive economic development may eventually lead to the country being progressively more challenging to the U.S. in such spheres as cyber warfare and diplomacy. To summarize, the growth of China's domestic market simultaneously expands the market share for the U.S. companies, hence the USA continues to gain more power by selling its products in China.

 

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