Jamaican in Africa

China's Economy: Last to Weaken, First to Recover

China’s growth over the last three decades is impressive, but China is not a juggernaut, but is a nation with severe structural problems and disadvantages. These problems will undermine China's growth and the author is ignoring them.

1. China lacks sufficient of arable land to feed its large population (www.worldwatch.org/nod...) . Large population and substitution of arable land for growth of urban centers, industrial growth and infrastructure projects like the three gorges dam are going to force China to purchase more food from abroad at a greater cost.
a. Countries with efficient agricultural sectors like the US will face increasing demand for agricultural products from Chinese consumers which will make them much them more profitable. In the end the cost of food to the Chinese consumer (who earns much less than his American, European and Brazilian counterpart) will force him to substitute a greater portion of his income to buy food, than to purchase consumer goods produced locally thereby reducing the domestic demand for manufactured goods.
b. As demand falls workers will get laid off, and the demand for social services in the urban centers will increase with the probability of social unrest that may begin to demand greater freedoms from the autocratic regime. The memories and resentments of the Tiananmen Square massacre, suppression of Tibetan demands for freedom, and denial of personal and religious freedom to various ethnic groups is fueling resentments that China’s current prosperity is allowing the government to manage (www.carnegieendowment....) . If the prosperity falters, these resentments will be difficult to manage and China could face internal chaos. As recently as 1993 China documented less than 9,000 episodes of social unrest, this has grown steadily, and by 2003 this number was greater than 58,000 a growth of more than 600% in less than a decade even while the economy was providing more and more Chinese with unprecedented prosperity.

2. China is currently importing a large quantity of the raw materials it needs and is expected to import an even greater portion of the raw materials it needs from unstable regions in Africa, the middle east and throughout the third world (www.cfr.org/publicatio.../) . The world today is less unstable than it was 30 years ago, and instability restricts supply causing cost to rise. The outlook is for lesser developed countries to become more unstable, thus it is reasonable to project that the cost to China for acquiring raw materials from poor nations to increase further eroding it’s competitive advantage.

3. Because China has experienced rapid growth it has also experienced increased urbanization, dramatic increase in pollution, a tremendous increase in the production in raw sewage from urban centers and degradation in the water quality and environment. The World Bank estimates that pollution costs China between 4 and 5% of GDP (web.worldbank.org/WBSI...~pagePK:34004173~piPK:... . As the pollution worsens it is reasonable to expect that the cost to reverse the pollution also increase.

a. The result of environmental degradation and increased population density in urban centers is that the population has experienced increased morbidity and mortality (AIDS wjz.com/health/AIDS.be... , cancer www.ictradiotherapy.co... , respiratory diseases like asthma www.emaxhealth.com/108... and infectious diseases like SARS) associated with crowded urban centers, pollution from industrial and domestic waste and improper use of fertilizer in an attempt to boost agricultural production.
b. China will have to divert a tremendous amount of money to address these issues. The money will have to be diverted from needs like the purchasing raw materials, funding its military growth and continued to modernization of its industrial centers.

I have carefully selected documents to support and validate my arguments in order to demonstrate that I am not responding emotionally to the author's arguments. So, before the author continues the fallacy that the US economy is terminally ill (which it is not) and suggest that China’s growth is unstoppable he should examine the facts about the Chinese economic and industrial miracle and the environmental, social, economic and healthcare pressures facing that nation. It might surprise him.