China’s economic growth
China’s growth and what it means for development elsewhere.
What’s the problem?
China’s seen unprecedented growth, lifting 500 million of its citizens out of poverty since 1981. But what are the impacts of China’s growth on the rest of the developing world?
China has a massive population, pays rock-bottom wages (150 million Chinese are still unemployed, which keeps wages down), and it has an educated workforce and good infrastructure, so it can produce cheap goods. Which is great for consumers, but bad for millions of poor country producers who can’t compete on price. Booming Chinese demand for goods is also contributing to the rise in food prices around the world.
What needs to happen?
Historically, poor countries have been encouraged to industrialise in order to grow economically. But perhaps they’ll need to think about specialising in different areas – such as agriculture or tourism – rather than try and complete with China directly. It’ll be a long time before China runs out of cheap labour and has to raise the prices of its goods.
Some economists are even calling for Africa to be protected from China, for example by Europe giving special preferences to African goods over Chinese, to help shield poor countries there.
More analysis and debate on this topic on FP2P.org
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