China's environmental challenges are illustrated by the following incidents and reports. The Chinese government has indicated that it is taking steps to reduce energy consumption, boost enforcement of environmental laws and regulations, reduce coal usage by expanding the use of cleaner fuels such as natural gas to general power, and relocate high-polluting factories away from large urban areas, although such efforts have had mixed results on the overall level of pollution in China.
The relative lack of the rule of law in China has led to widespread government corruption, financial speculation, and misallocation of investment funds. In many cases, government "connections," not market forces, are the main determinant of successful firms in China.
The relative lack of the rule of law and widespread government corruption in China limit competition and undermine the efficient allocation of goods and services in the economy.
The Chinese government's anticorruption watchdog reported that , officials were found guilty of corruption in China has reportedly sought cooperation with the United States to obtain extradition of alleged corrupt officials who have fled to the United States.
Some analysts contend that President's Xi anticorruption drive is more about consolidating his own political than instituting reforms. The meeting focused on the need to enhance the rule of law in China, but emphasized the leading role of the Communist Party in the legal system.
China maintains a weak and relatively decentralized government structure to regulate economic activity in China. Laws and regulations often go unenforced or are ignored by local government officials.
As a result, many firms cut corners in order to maximize profits. This has led to a proliferation of unsafe food and consumer products being sold in China or exported abroad. Lack of government enforcement of food safety laws led to a massive recall of melamine-tainted infant milk formula that reportedly killed at least four children and sickened 53, others in Transparency International's Corruption Perception Index for ranked China 79 th out of countries and territories, up from 72 nd in Many economists contend that China's demographic policies, particularly its one-child policy first implemented in , are beginning to have a significant impact on the Chinese economy.
For example, according to a McKinsey Global Institute study, China's fertility rate fell from about 5. The existence of a large and underemployed labor force was a significant factor in China's rapid economic growth when economic reforms were first introduced.
Such a large labor force meant that firms in China had access to a nearly endless supply of low-cost labor, which helped enable many firms to become more profitable, which in turn led them to boost investment and production. Some economists contend that China is beginning to lose this labor advantage. According to the Chinese government, the size of its working age population ages 16 to 59 peaked at million in , but then fell for seven consecutive years to million in The Chinese government projects that its working age population will drop to million by and to million by If these projections prove accurate, the Chines working age population could drop by million individuals The one-child policy has also resulted in a rapidly aging society in China.
China's Hukou household registration system also poses challenges to the government. First introduced in , the Chinese Hukou household registration system is a categorization of its citizens based on both their place of residence and eligibility for certain socioeconomic benefits. Hukou is issued through a registration process administered by local authorities and solidified into inheritable social identities.
The Chinese government imposed the system with the purpose of regulating population distribution, especially in regard to cities. Since economic reforms were begun in , hundreds of millions of people have been allowed to leave their home towns to work in urban areas, such as Shanghai. This forces such workers to save a very high level of their income to pay for these services. Due to China's desire to increase the urbanization of its population, combat demographic disparities, and boost domestic consumption, the Chinese government is currently considering implementing new reforms to the Hukou system.
President Xi's report to the 19 th Party Congress in November stated that socialism with Chinese characteristics had entered a new era. He stated that China would work to become a "moderately prosperous society in all respects" by Major goals include boosting living standards for poor and rural people, addressing income disparities e. We will work faster to build China into a manufacturer of quality and develop advanced manufacturing, promote further integration of the internet, big data, and artificial intelligence with the real economy, and foster new growth areas and drivers of growth in medium-high end consumption, innovation-driven development, the green and low-carbon economy, the sharing economy, modern supply chains, and human capital services.
We will support traditional industries in upgrading themselves and accelerate development of modern service industries to elevate them to international standards. We will move Chinese industries up to the medium-high end of the global value chain, and foster a number of world-class advanced manufacturing clusters. The report indicated that China would continue to pursue trade and investment reforms, noting the following:.
We will adopt policies to promote high-standard liberalization and facilitation of trade and investment; we will implement the system of pre-establishment national treatment plus a negative list across the board, significantly ease market access, further open the service sector, and protect the legitimate rights and interests of foreign investors. All businesses registered in China will be treated equally.
However, the report emphasized the continued importance of the state sector and the government's continued role in various economic sectors:. We will improve the systems for managing different types of state assets, and reform the system of authorized operation of state capital.
In the state-owned sector, we will step up improved distribution, structural adjustment, and strategic reorganization. We will work to see that state assets maintain and increase their value; we will support state capital in becoming stronger, doing better, and growing bigger, and take effective measures to prevent the loss of state assets. We will further reform of state-owned enterprises, develop mixed-ownership economic entities, and turn Chinese enterprises into world-class, globally competitive firms.
The Belt and Road Initiative calls for joint contribution and it has a clear focus, which is to promote infrastructure construction and connectivity, strengthen coordination on economic policies, enhance complementarity of development strategies and boost interconnected development to achieve common prosperity. This initiative is from China, but it belongs to the world.
It is rooted in history, but it is oriented toward the future. It focuses on the Asian, European and African continents, but it is open to all partners. I am confident that the launch of the Belt and Road Initiative will create a broader and more dynamic platform for Asia-Pacific cooperation. Infrastructure development is in fact only one of BRI's five components which include strengthened regional political cooperation, unimpeded trade, financial integration and people-to-people exchanges.
Taken together, BRI's different components serve Beijing's vision for regional integration under its helm. It is a top-level design for which the central government has mobilized the country's political, diplomatic, intellectual, economic and financial resources.
It is mainly conceived as a response to the most pressing internal and external economic and strategic challenges faced by China, and as an instrument at the service of the PRC's vision for itself as the uncontested leading power in the region in the coming decades. As such, it is a grand strategy. Many aspects of the BRI initiative remain unclear, including which and how many countries will participate, how much China will spend to finance the initiative, and what projects will fall under the BRI.
For example, the government's China Belt and Road Portal currently lists profiles of 70 countries on its website. The initiative could provide a big boost to China's economy and soft power image. China hopes to gain a better return on its foreign exchange reserves, create new overseas business opportunities for Chinese firms, create new markets for industries currently experiencing overcapacity, and stimulate economic development in poorer regions of China.
Secretary of State Rex Tillerson criticized certain aspects of Belt and Road initiative in remarks made in October We have watched the activities and actions of others in the region, in particular China, and the financing mechanisms it brings to many of these countries which result in saddling them with enormous levels of debt.
They don't often create the jobs, which infrastructure projects should be tremendous job creators in these economies, but too often, foreign workers are brought in to execute these infrastructure projects. Financing is structured in a way that makes it very difficult for them to obtain future financing, and oftentimes has very subtle triggers in the financing that results in financing default and the conversion of debt to equity.
China has undertaken other major financial initiatives as well. The new bank aims to fund infrastructure projects in developing countries. The "Made in China " initiative, announced in , is one of several recently announced ambitious projects aimed at increasing the competitiveness of Chinese industries, fostering Chinese brands, boosting innovation, and reducing China's reliance on foreign technology by making China a major or dominant global manufacturer of various technologies.
An updated version of the plan released in January said China aimed to become the world's leading manufacturer of telecommunication, railway, and electrical power equipment by , and that China's robotics, high-end automation, and new energy vehicles industries would globally rank second or third by In an interview on November 3, , U.
Trade Representative Robert Lighthizer stated that China's Made in China initiative was "a very, very serious challenge, not just to us, but to Europe, Japan and the global trading system.
China's rapid economic growth and emergence as a major economic power have given China's leadership increased confidence in its economic model. Many believe the key challenges for the United States are to convince China that 1 it has a stake in maintaining the international trading system, which is largely responsible for its economic rise, and should take a more active leadership role in maintaining that system; and 2 further economic and trade reforms are the surest way for China to grow and modernize its economy.
Lowering trade and investment barriers would boost competition in China, lower costs for consumers, increase economic efficiency, and spur innovation. However, many U. IP-intensive firms. Opinions differ as to the most effective way to deal with China on major economic issues.
Some support a policy of engagement with China using various forums. Others support a somewhat mixed policy of using engagement when possible, coupled with a more aggressive use of the WTO dispute settlement procedures to address China's unfair trade policies. While China's financial support of infrastructure projects in numerous countries could produce positive economic results, U.
Implementation of the reforms began in Some companies use China as part of their global supply chain for manufactured parts, which are then exported and assembled elsewhere. Other firms have shifted the production of finished products from other countries mainly in Asia to China; they import parts and materials into China for final assembly. Trade Issues , by Wayne M. Purchasing power parities are a method used to measure and compare the economic data of other countries expressed in U.
That method adjusts the data to reflect differences in prices across countries. This method is discussed in more detail later in the report. This reference appears to have meant that it did not matter whether an economic policy was considered to be "capitalist" or "socialist," what really mattered was whether that policy would boost the economy and living standards.
Many analysts contend that Deng's push to implement economic reforms was largely motivated by a belief that they would boost economic growth and thus strengthen the power of the Chinese Communist Party. China's economic growth slowed significantly followed the aftermath of the Tiananmen massacre that occurred in June Several countries, including the United States, imposed trade sanctions against China, and Chinese economic reforms were essentially put on hold.
China's real GDP growth rate fell from In , economic reforms were restarted and foreign sanctions against China were reduced or removed, and real GDP grew by 9. Japan was able to become a high-income economy, but since the mids, its economic growth has been relatively stagnant.
The classifications are determined by per capita income ranges the thresholds of which are adjusted annually. These include low-income economies, lower-middle-income economies, upper-middle-income countries, and high-income countries. PPP data reflect what the value of China's goods and services would be if they were sold in the United States.
Industrial output is defined by the Chinese government as the total volume of final industrial products produced and industrial services provided during a given period. Source: China Statistical Yearbook. The composition of Chinese FDI sectors has changed over the past few years. Chinese manufacturers quickly became modern, innovative, high-tech companies. Local Chinese governments pushed the Japanese to teach their core technologies to Chinese engineers.
Not long after, Chinese companies used those same technologies to land railway projects across the globe. In a similar fashion, China forced foreign automotive companies operating in China to give up crucial knowledge to Chinese companies working on renewable energy vehicles.
Beijing hopes to become the center of the electric car industry. Forcing foreign companies to share their technology if they wish to operate in China is very normal. If they comply, their regulatory approval process will go much smoother. Nowadays, investments are no longer used to scale up, but to support high-tech. This move into the technology sector requires less labor and is expected to keep the economy going.
It aimed for an economy propelled by innovation in the future. And China is realizing this extremely fast. The majority of those investments went into the manufacturing and services sector. Besides FDIs, debt also drives the Chinese economy. Meanwhile, another ACD country, Japan, restricted its borrowing. This resulted in GDP growth falling to nearly zero. However, some analysts predicted a number of sectors will slow as government fiscal and monetary support is reduced.
Yue Su, the Economist Intelligence Unit's principal economist for China, while the latest figures show that the country's economic recovery is broad-based, some production and export activity could have been "front-loaded" into the first quarter, suggesting slower growth ahead.
The figures nevertheless suggest China has continued to gain economic momentum. Comparing growth for the last quarter with the last quarter of , the Chinese economy grew by a far smaller 0. Helped by strict virus containment measures and emergency relief for businesses, the economy has recovered steadily since the pandemic hit.
Despite a calamitous start to the year, China was the only major economy to register growth in albeit its weakest in decades, at 2. In the early years, the World Bank brought international experience to help design economic reform strategies, improve project management, and address key bottlenecks to growth.
Joint flagship studies have been important for deepening the dialogue on policies and Bank programs and provided a model for other middle-income countries. World Bank-financed projects introduced innovations or piloted new approaches and serve as platforms for knowledge exchange. Many of them also placed a major emphasis on the environment and climate change.
Here are some of our recent projects and results in China:. The Hunan Subnational Governance and Rural Public Service Delivery Program for Results , approved in February , assists the province in delivering more equitable and efficient public services in rural areas.
The financing supports measures to strengthen local debt management and provide results-oriented transfers aimed at reducing disparities in the quality of basic education in rural areas.
It would also introduce greater accountability by making budget information more transparent and accessible to citizens. The China Food Safety Improvement Project , approved in March , helps China improve food safety management at both the national and targeted subnational levels, and reduce food safety risks.
The Emerging Infectious Diseases Prevention, Preparedness and Response Project , approved in June , supports China in strengthening national and provincial systems to reduce the risk of zoonotic and other emerging health threats. The project introduces a multi-sectoral approach that brings together responses from public health, agriculture and food, as well as the environment and wildlife sectors.
Jointly prepared with IFC, the project promotes a more transparent service and financing model through a public-private partnership, which is performance-based and focuses on improved service delivery to customers.
The project will contribute to domestic and global public goods by protecting the environment through reduced discharge of untreated wastewater into the tributaries of the Yangtze River. The Renewable Energy and Battery Storage Promotion Project , approved in June , aims to increase the integration and utilization of renewable energy by deploying battery storage systems at scale in China.
The program is helping China address the challenge of population aging by developing a comprehensive policy and institutional framework for elderly care in the southwestern Guizhou Province, one of the poorest provinces in the country.
The support is focused on increasing equitable access to a basic package of care services for the elderly and strengthening the quality of services and the efficiency of the aged care system.
The Innovative Financing for Air Pollution Control in Jing-Jin-Ji Program , supports the Hua Xia Bank in providing enterprises with financing to reduce air pollutants and carbon emissions by increasing energy efficiency, investing in clean energy, and tightening air pollution control.
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