"China's Short-term and Long-term Economic Goals and Prospects"

"China’s Short-term and Long-term Economic Goals and Prospects"

Recession. Really? Not another causational interpretation of the current global economic depression, its respective consequences and national responsive attempts. Well, yeah…but I am by no means seeking to fashion an unbearable redundancy in blogging about this topically inescapable reality that occupies a position of disproportionate prominence in seemingly every media of information we expose ourselves too. And, hey, at least it’s not about the U.S. this time; at least not entirely…this recession is systemically global, so be reasonable. In coping with this current recession, the Republic of China faces some interesting challenge in determining helpful policy responses. China’s current status can be summarized as such: after enjoying a 9% growth rate through the first three quarters of 2008, China’s GDP suffered a significant decline in growth rate to just 2.6% in the fourth quarter of that year. The Chinese government and the IMF as well as other outside analysts continue to project growth-rate numbers significantly higher than actual quarter-to-quarter growth, and consequently “the pace of China’s growth slowdown has consistently exceeded the expectations of the Chinese government and most outside analysts.” This “unanticipated nature of the decline in China,” has had significant ramifications for the rest of the world, as its slowdown “attributable primarily to macroeconomic and exchange rate policies and other domestic factors,” including a dramatic drop in export growth to -17.5 percent in 2009 “has been greatly exacerbated by an unexpectedly deep economic collapse in US, EU, and Japan.” In seeking to achieve an agreeable resolve to its currently depressing status (pun intended;), the Chinese government is faced with this dilemma: “short-run political expediency versus long-term economic efficiency.” While China’s devotion of 7% percent of GDP or 4 trillion Yuan ($586 million) to economic stimulus in 2008, open to extension and expansion as the recession advances thereafter, revitalizing its historical economic habits, seem to encourage growth that is unsustainable. Throughout China, “under the cover of economic emergency, the local governments will now ignore the recently-strengthened laws on environmental protection, worker safety, and medical insurance in order to encourage investment.” It remains utterly clear that “the present mode of economic development has given China the dirtiest air in the world, is polluting more and more of the water resources, and, is, possibly changing the climate pattern within China.” At present, China faces the additional environmental concern of managing its formidable water shortage, as currently “China uses 67 to 75 percent of the 800 to 900 billion cubic meters of water available annually, and present trends in water consumption would project the usage rate in 2030 to be 78 to 100 percent.” Obviously this is a limiting factor in the way of pursuing any sort of sustainable growth. So in trying to determine the best possible resolve to China’s current recessionary situation, what would Rawls delegate precedence to, the short or long term economic goals, and general well-being of the least-advantaged, here being those made the worst off by the ramifications of China’s economic downturn?

Source of Reference :
http://www.brookings.edu/testimony/2009/0217_chinas_economy_woo.aspx?p=1