Chinese Development and its Growth – An overview

China GDPRecently, during China’s 18th Party Congress, Chinese government defined the leadership of the Communist Party that will govern the country for the next 10 years. There was nothing new in the choice of Xi Jinping to succeed Hu Jintao in the president position. In fact political analysts had foreseen who would be the next president. The delegates from different regions of China, all of them from the Communist Party, just met to ratify the leadership decision. The Chinese political system does not use the popular vote. Its entire leadership is indicated by leaders who are wielding power. The Chinese government does not intend to make any kind of political change to enable popular participation. They do not even want to consider it. This is a very typical behavior of communist dictatorships. Indeed, they fear any kind of change that awaken popular demands and nurture the risk of social convulsions. It could bring political instability in a country with over 1.3 billion people, according to 2011 data. Not only by the amount of people involved, but also for its ethnic, religious and linguistic diversity. Although the country is dominated by ethnic Han representing over 91% of the population, it also has 55 other ethnics groups which constitutes more than 105 million people. There are dangerous nationalist aspirations, especially in its western provinces of Xinjiang and Tibet, near Central Asia, where the government faces separatist organizations that carry out terrorists attacks and seek political independence.

The main goal of the Chinese government is the economic and social development that removed more than 300 million people out of poverty over the past two decades allowing the country to become an economic power. China in 2010 assumed the second world economy position with $5.9 trillion GDP (Gross Domestic Product) in 2010, surpassing Japan. The first position still belongs to the U.S. which held an astonishing $15 trillion GDP in 2011 compared to the $7.2 trillion Chinese GDP in the same year. In 2011 just the Chinese international reserves were $3.3 trillion which was far larger than Brazil’s GDP of $2.4 trillion in the same year. These staggering figures show how fast the Chinese economy has grown. According Homi Kharas – senior fellow and deputy director for the Global Economy and Development Program at the Brookings Institution, China is expected to leave a position from 150 million people in the middle class in 2010 to 670 million in 2021, which is a huge and amazing step forward to reduce the poverty. These are impressive figures that cannot be unnoticed. Moreover, China has kept remarkable annual growth rates. From 1980 to 2004 the GDP grew by an average of 9.5% per year. This year the GDP forecast is expected to reach 7.8%. According to the IMF – International Monetary Fund, the Chinese growth in 2013 probably is to exceed a rate of 8.2% keeping this progress for the next four years. It is a high rate applied over a GDP already quite high. In 2017, it is expected to reach an impressive $13.2 trillion dollars GDP.

To keep the economy in constant rising, China needs to guarantee the supply of raw materials, especially oil and natural gas, which has led the country to perform supply agreements with several countries, such as Brazil, Ecuador, Venezuela, Chad, Angola, Australia, Russia, among others. The goal is also to increase its strategic reserves and reduce dependence from a few sources in the Middle East region concentrated in countries such as Saudi Arabia and Iran. Aligned with these requirements to ensure other sources of supply, China has also adopted military actions in the SCS – South China Sea claiming region ownership, which is recognized as a rich region in natural resources. This dispute to control the SCS has conducted the country to the risk of armed clashes, particularly with the Philippines and Vietnam.

The Chinese has also disputed with the Japanese the control of the Diaoyu archipelago in the East China Sea; a region with high possibilities to explore deposits of oil and natural gas. They have also sought to make investments in nonrenewable energy supply sources in Myanmar and Kazakhstan to construct oil and gas pipelines to provide energy to its industries. These countries are neighbors reducing the risk of a high dependence of sources far away from its territory.

Although China is defined as a communist country, there is no broad socialization of wealth obtained in recent years. This situation has worried the communist authorities, fearful of the growing of financial gaps between social classes. At least 400 million Chinese still live with less than $2 per day; it means 29.8% of the inhabitants, according to data from the World Bank in 2008. China has been affected by global economic crisis as well. To react against this situation the country intends to invest more than $126.98 billion in 25 urban rail projects along with other projects for ports, roads, waterways and sewage treatment centers, according to ChinaDaily.com.cn last September. These projects will benefit others economic sectors like cement, iron, steel, construction, equipment and other basic industries. These are problems to be faced by countries that opted by a capitalist economy model to boost the development and break off with the delay and poverty.

The Chinese are aware to keep the country’s development on a firm foundation they need massive investments in Research and Development (R&D). They have done it. Last year China spent $139.7 billion in R&D, which is 1.83% of its GDP in 2011 according ChinaDaily.com.cn on February 2012. During the last three decades the government defined across the country ten research regions, each one in charge of different technology specialties. In these regions there are companies settled with annual revenues around $665 billion according Exame, a Brazilian Magazine on November 2012. It is clear, the Chinese government does not just want to produce in China, but also to create the project and control the technology in their own country. They know what they want and what they must do to reach their goals. They are working steadily and with organization through its five-year plans to increase its development. These figures show just a few about the efforts which have been done by Hu Jintao administration. To keep the economy working and growing is the challenge to be faced by the new administration that will lead the country for the next 10 years.

Let us see what is going to happen next.

Raimundo Oliveira

Social and Political Cientist.

About Oliveira

I'm a Social Scientist interested to study and provide analysis of global relevant issues. I'm bachelor in Social Sciences at Federal Fluminense University, and also earned Logistics degree from Paulista University and postgraduate in Business Management at INPG / Castelo Branco University, Brazil. For professional contact send an email to rrsoliveira@hotmail.com
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