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The Suffering of China as a Result of Economic Growth

The Suffering of China as a Result of Economic Growth

China, as a crucial country in the world, is suffering from a variety

of costs of economic growth while the economic growth is incredibly

fast in recent years. A division between rich and poor, unemployment,

and various external costs, unbalance of payments, unstable exchange

rate consumption of non-renewable resources and the risk of inflation

and banking collapse have been the common social problems in China.

There is a huge gap between the rich and poor people in China. “The

top 5 and 10% of earners in China accounted for 19.8% and 31.9% of the

country’s revenue” (by Richard Spencer in “The Daily Telegraph”

published in February 27th 2004). Some people enjoy high quality of

living in rich metropolitans such as Shanghai. In contrast, in the

poor rural areas, people seek a job in the big cities, so they cannot

take care of their children; the children cannot even have an

opportunity to receive education, and some of them have been suffering

from starvation and diseases. As a consequence, the poor are left

behind, which means rich people become richer as poor people remain

poor.

A lot of people now have a risk of unemployment in China, because more

and more hi-tech equipment is being used to replace the human-labour,

in addition, Chinese population is much more than existing working

vacancies there are not enough existing working vacancies to cope with

the ever rising Chinese population. For instance, since recent years,

a lot of Chinese local firms have imported technology and equipment

from overseas to product efficiently and grow faster. However, new

facilities mean less demand of labours, which could also mean that

plenty of workers will lose their jobs as their skills are outdated.

The job vacancies are so limited in comparison with the huge Chinese

population. In every year, there are millions of graduates that cannot

find suitable jobs. As a result, it could cause various social

problems such as violence and depression leading to suicides.

External costs of economic growth have reflected in many aspects.

Under the Three Gorges Projects, more than a million people who live

in Yangtze Delta lost their homes; plenty of forests were damaged to

build a river dam. Even though this project can bring many benefits

for Chinese economic development, nevertheless, it...

... middle of paper ...

...ecentralised management, which mean to set a motive

collectively but allow the local state organs to set its own rules

separately, because different region could have different economic

situation such as a wide gap between the rich and the poor.

By using trade policy, the Chinese government should increase the

currency exchange rate to balance the payments, which means let

imports equal to exports. However, nowadays, Chinese Yuan is suffering

from devaluation which is due to it pegged to the falling U.S. dollar.

Therefore, to solve this problem would be very complicated.

In conclusion, Chinese government has faced a lot of problems of

economic growth, which compel it to adopt some effective policies.

Monetary policy, fiscal policy, direct policy and trade policy are

effective in different aspects. However, the precondition is to avoid

inflation in this fast economic growth.

Reference:

Warner, Jerry “handouts and notes” 2005

Anderton, Alain 2003

Spencer, Richard in “the Daily Telegraph” published in Feb. 27th.2004

Spencer, Richard in “The Daily Telegraph” published in Nov.2004

Goff, Peter in the “the Sunday telegraph” published in Feb. 20th. 2005

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