As we enter 2014, China remains a key player in the world economy after 35 years of unprecedented economic growth. The Chinese Dream is multifaceted, embracing improved living standards, increased military strength, and a rising political force in the international arena.
A Look Ahead
China’s per capita GDP was about $8,000 in 2012, versus $48,000 in the United States; however China is already the world’s second-largest economy, and with a population of 1.3 billion people and a dream of continuous double digit GDP growth, it is very possible for China to become the world’s largest economy by the year 2020. China’s prosperity will greatly benefit the rest of the world due to China’s huge population, and the rise of its middle class economic power.
China Continues To Thrive
A key to this prosperity is maintaining a robust, but balanced economic growth, with improved environmental policies. At the end of 2013, China decided to allow market forces to rise to the top by restructuring State-owned enterprises and by welcoming international enterprises to China. This move will improve economic efficiency and innovation, and will open the door to higher value-added industries and financial institutions.
More and More…
China watchers eagerly await 2014 as more building blocks are being put in place. While the right kind of investment will remain important, the acid test will be signs of the long awaited rise in domestic household consumption as a percentage of income.
China’s Stand with the US
During 2013, the number of billionaires in China surpassed those in the US, yet a large economic inequality still remains, and many rural areas are significantly underdeveloped as compared with urban centers such as Beijing and Shanghai. China also holds very large reserves of gold and foreign currency, and could use its economic power for political influence. The Chinese military spending is growing at a rate of 13% per year, while the US military spending is declining. China might use its military strength at the right time to gain regional control in the Asia Pacific Rim region, and might threaten neighboring nations like Taiwan, Korea, Japan and even Australia.
One area of great concern to China is the environment. China’s air and waterways are polluted by various pollutants from unregulated power plants and manufacturing facilities. China will have to implement tough environmental regulations quickly; otherwise it will risk a significant shortage of clean water and a dramatic increase in chronic diseases and in human fatalities.