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Mon, Nov 1st 2010, 23:26

Dariusz Lesniak, NYU: SCPS, Bronze Contributor (17)

Unless China can shift it's market orientation towards itself, rather than being the inexpensive producer for the globe, the Communist party will have more to worry about than U.S.-Chinese rivalry.

Fri, Nov 5th 2010, 10:24

Bernard Koranteng Osafo, Discoverytel Ghana Ltd, (2)

I think china is on the right path to be a major global power given the fact it has recently overtaken japan to the world No. 2 economic power house,china should be careful of the US if it really want to ascertain it rightful place in todays global economy

Sat, Nov 13th 2010, 18:27

Mary Ellen Morris-Delaney, New York University, Center for Global Affairs, SCPS, Bronze Contributor (12)

China's economic growth has been remarkable. Whether it can sustain it, is certainly the biggest question. In order for China to sustain its rise, it must first resolve several pressing issues within its country, the most important of which, in my opinion, is the current and growing wealth disparity. The Gini coefficient for China (which measures the gap between the poorest and wealthiest) is over 0.45; it was 0.2 only a few decades ago. This disparity is a direct result of Deng's policies to develop the coastal regions first and create the weathly upper and middle classes. Although China has drastically reduced its number of poor living below $1/day, in a population of over 1.3 billion, it still has a tremendous population of "near poor". This, is where the risk of instability lies. These people will demand better services, better wages, greater social networks, and food and water security as China's wealth increases. The Communist Party is well aware of the power of the masses to create political change. China cannot expect to continue its rise on a sustained basis without confronting and addressing the issues confronting its less economically advantaged masses.

Mon, Nov 15th 2010, 21:50

Alexander M. Vinograd, NYU , Bronze Contributor (15)

Mary, I agree. One of the biggest problems China will face in transitioning from a export driven market to a more consumption based economy is increasing wage inequalities. As the price of wages increase in labor intensive industries, they become less competitive relative to other world markets. Churning may allow a country to reinvent itself, and become stronger and more competitive in industries where it has a comparative advantage, however it can also easily destroy other industry, rendering certain cities, residents and workers destitute. In a country with the population and size of China, the government must be extremely attentive to social unrest and labor movements. A free market based system and further liberalization may not be in the immediate best interest of the Chinese Communist Party, as it would undermine the current political systems stability, especially in light of the most recent financial crises and the effects it is having on its biggest export market. The government has resorted to unfairly subsidize industries and maintain a weak currency to maintain its present growth levels and thus political stability.

Stronger domestic institutions will be necessary to allow the government to mitigate the effects of a volatile market place and address the concerns of the labor force. There is a necessity for the government to intervene in periods of high unemployment through the implementation of proper safety nets, as well as effective work and education programs that do not currently exist. Technological innovation and foreign investment should lead the way for sustainable long term growth and the rise of the Chinese middle class, however, it is left to see how adamant the government is to reform both domestically and with its trading partners abroad.

Mon, Nov 15th 2010, 21:51

Alexander M. Vinograd, NYU , Bronze Contributor (15)

Mary, I agree. One of the biggest problems China will face in transitioning from a export driven market to a more consumption based economy is increasing wage inequalities. As the price of wages increase in labor intensive industries, they become less competitive relative to other world markets. Churning may allow a country to reinvent itself, and become stronger and more competitive in industries where it has a comparative advantage, however it can also easily destroy other industry, rendering certain cities, residents and workers destitute. In a country with the population and size of China, the government must be extremely attentive to social unrest and labor movements. A free market based system and further liberalization may not be in the immediate best interest of the Chinese Communist Party, as it would undermine the current political systems stability, especially in light of the most recent financial crises and the effects it is having on its biggest export market. The government has resorted to unfairly subsidize industries and maintain a weak currency to maintain its present growth levels and thus political stability.

Stronger domestic institutions will be necessary to allow the government to mitigate the effects of a volatile market place and address the concerns of the labor force. There is a necessity for the government to intervene in periods of high unemployment through the implementation of proper safety nets, as well as effective work and education programs that do not currently exist. Technological innovation and foreign investment should lead the way for sustainable long term growth and the rise of the Chinese middle class, however, it is left to see how adamant the government is to reform both domestically and with its trading partners abroad.

Mon, Nov 15th 2010, 21:51

Alexander M. Vinograd, NYU , Bronze Contributor (15)

Mary, I agree. One of the biggest problems China will face in transitioning from a export driven market to a more consumption based economy is increasing wage inequalities. As the price of wages increase in labor intensive industries, they become less competitive relative to other world markets. Churning may allow a country to reinvent itself, and become stronger and more competitive in industries where it has a comparative advantage, however it can also easily destroy other industry, rendering certain cities, residents and workers destitute. In a country with the population and size of China, the government must be extremely attentive to social unrest and labor movements. A free market based system and further liberalization may not be in the immediate best interest of the Chinese Communist Party, as it would undermine the current political systems stability, especially in light of the most recent financial crises and the effects it is having on its biggest export market. The government has resorted to unfairly subsidize industries and maintain a weak currency to maintain its present growth levels and thus political stability.

Stronger domestic institutions will be necessary to allow the government to mitigate the effects of a volatile market place and address the concerns of the labor force. There is a necessity for the government to intervene in periods of high unemployment through the implementation of proper safety nets, as well as effective work and education programs that do not currently exist. Technological innovation and foreign investment should lead the way for sustainable long term growth and the rise of the Chinese middle class, however, it is left to see how adamant the government is to reform both domestically and with its trading partners abroad.