If China’s middle class continues to thrive and grow, what does that mean for the rest of the world?


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<p><figcaption class=Over the last few decades, hundreds of millions of Chinese have become part of the middle class. Associated Press Photo / NgHan Guan

Chinese Big and impressive With the achievements of the last 40 years, scholars and politicians have West decline –Contains America – As the dominant political and economic force in the world Inevitable In seemingly merciless Rise of the east..

The COVID-19 virus first struck China violently and stagnated rapid economic growth for the first time since the Great Depression.However, China’s economy grew at a tremendous rate of 18.3%. In the first quarter of 2021 Compared to 2020, the world Second largest Economy.Now many people are in China instead of the United States Promote a global recovery from a pandemic..

It is not yet clear whether this current rebound means that China has regained its previous growth rate. But if so, I believe that in the coming decades there will be a global battle over what form of government will have a dominant impact on world affairs. Western democracy or Chinese authoritarian brand?

My research With Other Examine two questions.

  • Will China Solve The Biggest Challenge to Maintain 40 Years of Growth? 7% -8% every yearWhich has driven that rising global power?

  • If China succeeds in maintaining this pace, will this benefit the rest of the world?

“Middle Income Trap”

1978, Deng Xiaoping start A transformative reform that opened China to the international community and foreign investment. In 2001, China joined World Trade Organization And I became enthusiastic about participating in the global market and value chain. As a result of these and other economic policies, China has succeeded in making rapid progress from low income to low income. Middle income country..

In other words, globalization is certainly Brought profit to China In many ways so far.Hundreds of millions of Chinese citizens after generations of endemic poverty Wages go up This will lead to an increase in disposable income. Now, after paying for basic necessities, there is extra money to save or spend on consumer goods such as fashionable clothing and tech equipment.

The profit is now Spread beyond the city centerIn the number of citizens, both rural and poor Dramatic decline, Stop by 12.89 million Only between 2016 and 2017. Rural personal consumption is increasing.As an increase in agricultural production Relieve fear Due to the effects of famine, daily life in rural areas is improving, and the expansion of non-agriculture is increasing. Rural industry Provide them with an alternative source of income.

The comfort of this growing material is Increasing happiness about life in China.. Still, when a country like China gains middle-income status, May be trapped: Neither the knowledge economy (usually a state of a high-income country) nor the left-behind low-wage economy can compete with other countries.

Influential Research This ““Middle-income trap” in many countriesThe World Bank found that of the 101 middle-income countries in 1960, only 13 had reached high-income status by 2008. Some calls “Low productivity equilibrium”. A relatively small proportion of the workforce is employed in highly skilled jobs such as health care providers, engineers and managers, rather than less skilled jobs such as farm workers, factory workers and retail clerks. cashier. The remaining 88 countries appear to be poor or remain in middle-income status.

In addition, many large and small manufacturers are in China Wage rise Along Shift their operations To countries with low labor costs such as India and Vietnam. 40,000 factories Shut down all over China Eliminate a large number of jobs each year. This means that China is milking low-skilled manufacturing for all of its value and needs new policies to sustain growth.

Educational challenges in China

The world is increasingly divided into two categories. Some countries have a high level of education and some do not. Industrialized nations, which have invested heavily in improving the quality of high schools, vocational schools and universities since the end of World War II, have largely avoided the traps of middle-income nations and advanced to high-income positions. I’m out.

For example, in Singapore, investment in the education system 12% -35% of the annual national budget It has created a well-educated, professional and prosperous middle class that has supported continued economic growth.Similarly, South Korea invests heavily in education and spends on average. 3.41% of gross domestic product Between 1970 and 2016. this is, Promoted the economic development of the country For decades.

Some expert observers believe China is likely to succeed in a similar move, Escape from the middle-income trap..But for this to happen, leadership needs to be large nationwide. Investing in that education system, From improvement rural And Profession Schools to improve universities and increase access to educational opportunities in the city.These educational investments called by economists “Improvement of human capital, ”Usually takes a long time to fully develop.

If China maintains an average annual growth rate of 7% while undergoing this workforce transformation, per capita income by 2035 will be approximately US $ 55,000, about the same as the per capita income of the United States in 2014. Become. The US workforce was at least college-educated, with 89% having a high school diploma.Even optimistic Statistical analysis By 2035, China’s education level will be much lower.

Therefore, the Chinese government will only be able to create a much higher numerical relationship between human capital and per capita income than the typical global experience so far for the next 20 years. Achieve the hope of 7% annual growth.

Another challenge is China Unfair country, There is the deepest rooted rural and urban gap in the world. Chinese”Family registerOr in the household registration system, all citizens are assigned to a local or urban family register at birth. This system affects almost every aspect of life and prioritizes the status of the city by providing virtually larger and better educational opportunities for the city’s family register owners.

as a result, 260 million Chinese countryside family register holders You do not have access to the excellent education offered in the city. They are left behind because their family register forces them to live as second-class citizens in their adopted cities, even when they move to the city center for work.Therefore, China must seriously reform Family registration system If you want to lay a safe foundation among the “educated” countries of the world.

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What does high-income China mean for the rest of the world?

Prominent Chinese scholar and Professor Scott Rosell of Stanford University Said “With prosperous China, the whole world will be much better.” He said that while the world would benefit from continued access to many low-priced products, personal prosperity would increase. We believe that China itself will benefit as citizens’ political instability diminishes.

But when such success would save millions of people from poverty and bring about broader economic growth and development, China’s characteristic socialism More desirable model Government rather than democracy practiced in the west

Chinese Communist Party wants to remain firmly Authoritarian government. In China Extensive monitoring status You can even track people’s faces, scan your phone, and even find out that someone has left home.

Government Persecution That Muslim minority Uighur citizens The Xinjiang Uygur Autonomous Region also gives you a glimpse of how China can interact with countries and people that make China uncomfortable in a world order dominated by China.

Meanwhile, China Already expanding its international influence Through the Belt and Road Initiative, which invests billions of dollars in development projects in Europe, Asia, East Africa and the Western Pacific.In the process, China Very tough, And has begun to play a dominant political role on the world stage.

It is too early to decide whether China will continue to maintain rapid economic growth or make the necessary investments and social reforms to promote most citizens to the middle class. But given its determination and progress over the last few decades, it is most likely that by the middle of the century, China will have the same wealth and political influence as the United States, and a democratic coalition could become a fact. It seems. Such China may have the power to break down the current international order into two conflicting and conflicting visions of the future of Asia and the world.

This article will be republished from conversation, A non-profit news site aimed at sharing ideas from academic experts. It was written by: Amitrajeet A. Batabyal, Rochester Institute of Technology..

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Amitrajeet A. Batabyal does not work, consult, own shares, or receive funds for any company or organization that would benefit from this article.

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