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Asia Unit China Issue #1 – Population and development
Isolation • Mountains • Himalayas • Hindu Kush • Tien Shan • Rivers • Yangtze • Yellow • Desert • Gobi • Taklimakan • Seas • Yellow • East China • South China
Impact of Geography • First civilization complex • Large territory to defend = impressive defenses and army • Religion naturalistic, belief in protection
History in a nutshell • Dynasties • Ancient Era • Xia 2100 B.C.E. • Earliest known dynasty • Imperial Era • Han Dynasty 202 B.C.E. – 220 C.E. • “Golden Age” • Confucianism dominated • Civil service exams • Public works • Qing Dynasty 1644- 1911 C.E. • Last dynasty • Ruled by the Manchu’s • China’s greatest size • Modern Era • Republic of China 1911 • Civil war between Sun-Yat-Sen and Mao Ze Dong • Communist China • People’s Republic of China 1949- Present
China’s Population Dilemma • China's Population in motion
New Policies in Place • Between 1950-200 the natural rate of increase in China was cut by 80% • Since 2000 China’s birth rate has been lower than the United States • 1980 One-Child Policy • Permit needed to have child • Benefits for those with one child • Marriage prohibited until 22 for Men and 20 for Women • Free contraceptives, abortions, and sterilizations • Consequences: • Pay fine for more than one child and obtain permit • Reprecussions such a job loss • Relaxed Rules • As China moves towards a market economy and more wealth is brought into the coastal areas some rules have been relaxed: • Family-planning “fee” • Mainly in urban areas
Communist China Repercussions:agriculture and development • Communism's effects are best gauged when compared to capitalism. In capitalism, one produces (or not) and receives compensation (or not) in an amount reflective of the value of that production to others in society. In communism, one is asked to produce in accordance with his abilities, while receiving in accordance with his needs. The difficulty here is that one has little incentive to work hard in a communist system. Unless others in society match your increased effort, your individual exertions will not lead to an increase in your standard of living. The result of this is that people will cease to put in that extra effort that separates the achievers from the pikers in capitalist society but that is of negligible consequence in communism.Since they will naturally avoid profitless extra work, the communist labor force will necessarily be less productive than its equivalent in a capitalist society. Thus, the communist system, all other things being equal, will produce less than a capitalist system. This will be felt in the standard of living of its citizens.
Agriculture • Since Communist Revolution 1949, few individuals owned private land • Government created agricultural communes consisting of several villages and hundreds of people • Hoped to promote efficiency – opposite occurred • People work harder for incentives and themselves • China today dismantled communes but hold title to land. • Villagers sign contracts entitling them to farm portions of land as private individuals, may pass on to children • Production has increased
Agriculture • Unfortunately China cannot provide enough food for its nation • New Strategies: • Nitrogen fertilizer • Phosphorus reserves • Genetic modification • Solution: • Importation • China world’s 2nd largest importer of Grain • Only behind Japan
Issue #1: Development • In the modern era, China's influence in the world economy was minimal until the late 1980s. • In the 1949 revolution, China's economic system was officially made into a communist system. Since the wide-ranging reforms of the 1980s and afterwards, many scholars assert that China can be defined as one of the leading examples of state capitalism today. • China has generally implemented reforms in a gradualist fashion. As its role in world trade has steadily grown, its importance to the international economy has also increased apace. China's foreign trade has grown faster than its GDP for the past 25 years. • The People's Republic of China (PRC) ranks since 2010 as the world's second largest economy after the United States. • It is one of the world's fastest-growing major economies, with consistent growth rates of 5% - 15% over the past 30 years. • China is also the largest exporter and second largest importer of goods in the world. • China became the world's top manufacturer in 2011, surpassing the United States .
New Industrial Regions • China is the largest manufacturer of textiles and apparel, steel, and household products • Assets: • World’s supply of low cost labor • World’s largest market for consumer products • Policy changes • 1990: China opened to transnational corporations • Foreign-owned companies opened factories to take advantage of low-cost labor • Rapid economic expansion brought in lots of $$$$$$
Government Leadership • Secretary General /President HuJintao • Newsweek named Hu the second most powerful person in the world referring to him as "the man behind the wheel of the world's most supercharged economy.” Forbes also named him the second most powerful person in the world. Hu was named the 2010 World's Most Powerful Person by Forbes Magazine. • General Secretary Hu and Premier WenJiabao inherited a China wrought with internal social, political and environmental problems. One of the biggest challenges Hu faces is the large wealth disparity between the Chinese rich and poor, for which discontent and anger mounted to a degree which wreaked havoc on communist rule. • Furthermore, the corruption plaguing China’s civil service, military, educational, judicial and medical systems sought to destroy the country bit by bit. • In the beginning of 2006, however, Hu launched the "8 Honours and 8 Disgraces" movement in a bid to promote a more selfless and moral outlook amongst the population. • China's increasingly fragile environment has caused massive urban pollution, sandstorms and the destruction of vast tracts of habitable land. • It remains to be seen if Hu, usually cautious in nature, is capable of managing the continued peaceful development of China while avoiding international incidents, at the same time presiding over an unprecedented increase in Chinese nationalist sentiment. • http://plaidavenger.com/leaders/profile/hu-jintao/
What does this mean for the United States? • U.S.-China Trade Facts • U.S. goods and services trade with China totaled $390 billion in 2009 (latest data available for goods and services trade combined). Exports totaled $85 billion; Imports totaled $305 billion. The U.S. goods and services trade deficit with China was $219 billion in 2009.\ • China is currently our 2nd largest goods trading partner with $457 billion in total (two ways) goods trade during 2010. Goods exports totaled $92 billion; Goods imports totaled $365 billion. The U.S. goods trade deficit with China was $273 billion in 2010. • Trade in services with China (exports and imports) totaled $24 billion in 2009 (latest data available). Services exports were $16 billion; Services imports were $8 billion. The U.S. services trade surplus with China was $7.5 billion in 2009.
Trade Imbalance • Trade Balance • The U.S. goods trade deficit with China was $273.1 billion in 2010, a 20.4% increase ($46.2 billion) over 2009. The U.S. goods trade deficit with China accounted for 43% of the overall U.S. goods trade deficit in 2010. • The United States has a services trade surplus of $7.5 billion with China in 2009 (latest data available), up 33% from 2008. • Investment • U.S. foreign direct investment (FDI) in China (stock) was $49.4 billion in 2009 (latest data available), a 5.9% decrease from 2008. • U.S. direct investment in China is led by the manufacturing and banking sector. • China FDI in the United States (stock) was $791 million in 2009 (latest data available), down 34.4% from 2008. • China direct investment in the U.S. was mostly in the wholesale trade sector. • Sales of services in China by majority U.S.-owned affiliates were $19.5 billion in 2008 (latest data available), while sales of services in the United States by majority China-owned firms were $432 million.
What we owe China • As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion • The largest holders were the central banks of China, Japan, the United Kingdom and Brazil. • The share held by foreign governments has grown over time, rising from 13% of the public debt in 1988to 25% in 2007. • As of May 2011 the largest single holder of U.S. government debt was China, with 36 percent of all foreign-held U.S. Treasury securities (16% of total US public debt). • China's holdings of government debt, as a percentage of all foreign-held government debt, have decreased a bit over the last year, but are up significantly since 2000 (when China held just 6 percent of all foreign-held U.S. Treasury securities).