Managing China's Growth
All relationships are mutual, and the same goes for U.S.-China relationship. If we understand China’s growing pains and needs, we will be able to develop a mutually beneficial relationship with them. China has developed such a relationship with many countries and is interested the same with the United States.
In the past 30 years, China’s economy grew more than 10 times. It has accomplished in three decades what took many other countries three centuries or longer. But with such an economic miracle, China is suffering multiple growing pains.
The most painful development for China is the deterioration of its environment. China will catch up with the United States on the record of pollution before it catches up with the level of economic development of a developed country. Although carbon emissions per capita are still much lower in China than it in the U.S., any further deterioration would have unimaginable effects on the global environment given the size of China’s population. The Chinese people and government have realized this and invested heavily in improving the environment (see my column October 2010), but they are short of mature technologies to deal with this urgent issue in a timely fashion.
Food safety is another growing pain, as unprecedented growth puts tremendous pressure on supplies. Food safety standards have been relaxed or simply ignored. There has been no sound inspection system or matching equipment, no technology established and no well-trained personnel to do the work. A significant number of the businesspeople may have only gone through high school.
Renewable energy has become an important and growing industry for China. There are environmental issues to deal with, as well as tremendous pressure for continual development. Any visitor to China can observe the vast coverage of solar panels on top of residential and office buildings. The Chinese government provides notable incentives for the population to use renewable energy. However, the roof-top solar equipment, for instance, needs much improvement, and the Chinese government – with cash in hand – seems ready to help any business that promises energy efficiency and technology innovation.
In many if not all the cities in China, there is an industrial park for technology incubation. Local governments are competing to attract promising technologies and bright talents with a guarantee of multi-year start-up funds. Such competition also comes from wealthy individuals. There are indeed more than 130 billionaires and more than 800,000 millionaires in China. Many of them are seeking investment opportunities. These individuals are more flexible than the government as they look for investment projects. They don’t have to confine themselves within the Chinese borders. In their eyes, the United States could be an “underdeveloped” market for Chinese investors.
As China’s growth could benefit our economy in South Carolina, helping China to manage its growing pains would help our economy as well. The U.S.-China relationship should be mutually beneficial.
Dr. Xiaobo Hu is the Director of the Center for China Studies at Clemson University.