Ta-Chih Hsiao

China’s rise over the past thirty years has been rapid and massive and has had an impact on everybody’s life. From 1979 to 2006 its economic growth rate was the highest of any large country in history. The World Bank estimates China’s contribution to world economic growth between 1980 and 2000 at 14%. The International Monetary Fund reports that China is the world’s second largest economy in terms of purchasing power and may overtake Germany as the world’s largest exporter in 2008. In our daily life, over 70% of the products sold by Walmart are made in China.

In order to achieve such economic success in such a short period sacrifices have been made in the area of civil rights. The Chinese people have tacitly consented to this, not only due to government enforcement but also due to their eager quest for wealth. The Chinese government believes that economic growth is the best solution for maintaining a stable society, and it has tried to convince the Chinese people that the economic growth will continue.

But will the future be as simple as this? Apparently not, for at least three reasons: income inequality and social disparity, population structure, and environmental pollution.

The rise of income inequality in China is the natural result of market forces. Indeed, it somewhat encourages economic growth. However, history tells us that inequality and disparity are strongly linked to social instability. In spite of this some Chinese government policies artificially exacerbate, rather than mitigate this inequality. A controversial Chinese government policy that is increasing economic disparity is the policy of “letting a class getting rich first.” As proposed by Deng Xiaoping this idea is to let one class of people get rich and then have them help other people become wealthy. However, the consequence has been economic activity in the private sector that resulted in collusion between officials and “this class” of people, thereby creating serious inequality and social disparity.

The second challenge for China is its population structure. There are two serious problems, and both of them are linked to the One-Child policy. The first is the aging population, and the other is imbalance in the male-female ratio. The Chinese government views the One-Child policy as a solution to alleviate overpopulation and social and environmental problems in China. However, it has caused the population structure gradually to become skewed toward a higher age. As One-child policy children grow up China no longer has the demographic dividend it previously enjoyed in the global labor market. And because of the poor social security and retirement systems every young person needs to provide support for two parents and four grandparents. This is known as the “4-2-1” family problem in China.

The other undesired outcome of the One-Child policy is an imbalance in the male-female ratio because of the preference for baby boys in Chinese society. In 2005 the male-female ratio was about 118 to 100, which is significantly higher than in the other Asian countries. Many Chinese males, especially those with low income or little education, obviously will have difficulties in finding wives. Both of these problems may not only retard economic growth but lead to social instability in China.

The problem of environmental pollution is another urgent challenge for China. In 2005 the Ministry for Water Resources P. R. China reported that about 25,000 kilometers of Chinese rivers failed to meet the water quality standards for aquatic life and about 90 percent of the stretches of rivers near urban areas were seriously polluted. At the same time China is facing serious water shortages. It has about only 7 percent of the world’s water resources but roughly 20 percent of population. Moreover, most of the water is located in the south of China. The north relies largely on groundwater, which is being depleted. Air pollution is also a serious problem. In 2006 China overtook the U.S. as the biggest CO2 emitter in the world, and it is also the largest source of sulfur dioxide emissions. In addition, China produces about 28% of the global emissions of mercury.

These statistics suggests that China is reaching a breaking point. However, most of Chinese people are not aware of how serious the problem is. They live with it because they believe that economic growth must come first. But natural resources are not free and sometimes their cost is not affordable.

Economic growth and environment protection are two ends of a seesaw that the Chinese government should be searching to balance, rather than choosing only the former.