If China’s middle class continues to thrive and grow, what does that mean for the rest of the world?
Over the last few decades, hundreds of millions of Chinese have become part of the middle class. The Associated Press / Ng Han Guan China’s massive and impressive achievements over the last 40 years discuss whether the western decline as the world’s dominant political economy is inevitable in a seemingly relentless rise. It spurred scholars and politicians. 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 has grown tremendously by 18.3% in the first quarter of 2021 compared to 2020, maintaining its strong position as the world’s second largest economy. Many now believe that China, not the United States, could drive 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 it will cause a global dispute over what form of government will have a dominant impact on world affairs in the coming decades. My study and other studies consider two questions. Will China solve the biggest challenge to maintain a 40-year growth rate of 7% to 8% per year, which is driving the rise of global power? If China succeeds in maintaining this pace, will this benefit the rest of the world? “Middle Income Trap” In 1978, Deng Xiaoping launched a transformative reform that opened China to the international community and foreign investment. In 2001, China joined the World Trade Organization and enthusiastically participated in the global market and value chain. As a result of these and other economic policies, China has succeeded in rapidly developing from a low-income country to a middle-income country. In other words, globalization has certainly benefited China in many ways. After generations of endemic poverty, hundreds of millions of Chinese have seen rising wages, leading to higher disposable income. Now, after paying for basic essentials, there is extra money to save or spend on consumer goods such as fashionable clothing and tech equipment. Profit now extends beyond urban areas, with the number of both rural and poor citizens declining dramatically, with a decline of 12.89 million in 2016-2017 alone. Rural personal consumption is increasing. As increased agricultural production eases the fear of famine, the daily lives of rural communities are improving, and the expansion of non-agricultural rural industries provides them with an alternative source of income. This growing material comfort enhances the happiness of living in China. Still, when a country like China gains middle-income status, it can be trapped. Behind you will not be able to compete with other countries in either the knowledge economy (usually the state of a high-income country) or the low-wage economy it left behind. The World Bank has reached high-income countries by 2008, out of 101 middle-income countries in 1960, in an influential survey of many countries on this “middle-income trap.” It turns out that only 13 countries have done so. A relatively small percentage of the total workforce employed in high-skilled jobs such as health care providers, engineers and managers, rather than low-skilled jobs such as agricultural and factory workers, “low productivity balance” Because there is something called. , Or a retail store clerk and cashier. The remaining 88 countries appear to be poor or remain in middle-income status. In addition, many large and small manufacturers are responding to rising wages in China by moving their operations to countries with lower labor costs, such as India and Vietnam. Every year, 40,000 factories are closed across China, losing large numbers of jobs. This means that China is milking low-skilled manufacturing for all 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, a well-educated, professional and prosperous middle class has supported continued economic growth by investing 12% to 35% of the annual national budget in the education system. Was born. Similarly, South Korea has invested heavily in education, spending an average of 3.41% of GDP between 1970 and 2016. This has led to the emergence of a well-educated workforce that has promoted the country’s economic development for decades. Some expert observers believe that China is likely to succeed in a similar move and escape the trap of middle-income countries. But to do this, leadership needs to make large, nationwide investments in education systems, from improving rural and vocational schools to improving universities and increasing access to urban educational opportunities. There is. These education investments, which economists call “improvement of human capital,” usually take 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 shows that 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 that China is an unfair country and has the deepest rooted rural and urban gaps in the world. Under China’s “family register” or 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 family register owners in the city. As a result, 260 million rural Chinese family register owners do not have access to higher 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 its family register system if it wants to lay a safe foundation among the “educated” countries of the world. [Understand key political developments, each week. Subscribe to The Conversation’s election newsletter.] What does high-income China mean for the rest of the world? “With a prosperous China, the whole world would be much better,” said Scott Rosell, a prominent Chinese scholar and professor at Stanford University. He believes that while the world will benefit from continued access to many low-priced commodities, China itself will benefit as personal prosperity diminishes public political instability. .. But such success, when it comes to saving millions of people from poverty and bringing about broader economic growth and development, is preferable to the democracy practiced in the West by socialism with Chinese characteristics. It may suggest to developing countries that it is a model of government. The Chinese Communist Party wants to remain a solid authoritarian government. In China, vast surveillance nations can track people’s faces, scan phones and even know when someone leaves home. Government persecution of Muslim minority Uighur citizens in the Xinjiang Uighur Autonomous Region also gives a glimpse of how China interacts with countries and people who offend China in a Chinese-dominated world order. Meanwhile, China has already expanded its international influence through the Belt and Road Initiative, investing billions of dollars in development projects in Europe, Asia, East Africa and the Western Pacific. In the process, China is steadily demanding and embracing 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 has been republished by The Conversation, a non-profit news site aimed at sharing ideas from academic experts. It was written by Amitrajeet A. Batabyal of the Rochester Institute of Technology. Read more: Why China’s attempts to curb criticism from foreign media are likely to fail Rethinking the US-China battle: Is China really threatening the power of the US abroad? Amitrajeet A. Batabyal does not work, consult, own shares, or receive funds for any company or organization that would benefit from this article.