The Rise of China
The World Bank raised China’s growth forecast from 6.5% to 7.2% in 2009. This figure was better than expected by analysts. A £356 Billion stimulus package has helped the economy in this growth, but exports are still down as the world accommodates the cut backs of the financial crisis.
The rest of the world, excluding China, is expected to shrink its aggregate GDP by 3%. Chinese growth is expected to remain respectable this year and next.
The Problems with China’s Growth
China’s economic growth in the last 30 years comes to huge environmental cost. Damage occurs to both the people in China, and the country’s reputation.
Recently, China overtook the USA as the biggest carbon dioxide emitter in the world. It is also the world’s biggest consumer of coal – the cheapest yet most polluting form of energy. ¼ of global coal reserves are found here, and the nation depends on it to provide more than 2/3 of its energy needs.
How Pollution affects China:
- 2/3 of the world’s most polluted cities are found in China
- 400000 people die of pollution related diseases each year
- 1/3 of China is affected by Acid rain.
Environmental damage costs the country approximately 5% of its economic output each year.
Impact on the rest of the world
China’s growth within the BRIC’s and the rest of the world has lead to it having a range of influence in different areas.
The Shanghai Co-operation Organisation is a group made up of China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. The organisation, created in 2001, was set up to curb extremism in the region.
China submitted a £6Billion loan to the organisation in 2009, in an attempt to assist the other nations with their economic growth. In addition to this, President Hu also offered to send delegations to SCO nations to assist with trade and investment. As the second largest economy in the world, Chinese expertise could be very useful in these nations.
Since the creation of the SCO, its objectives have changed. It is now being used as a base for economic co-operation and advances, rather than to tackle problems. The idea of a single energy market is being discussed, with some analysts believing China is trying to increase its influence in these highly strategic ex-Soviet nations of Central Asia. In recent months, China has increased lending to Russian companies. China is Russia’s second largest trade partner after Europe, with total trade between the two nations being over $80Billion. These increased links are being seen as an attempt to increase influence, regarding energy and China’s energy security.