Chinese economic growth of the past 30 years has been most impressive. China
is a centrally-planned Communist nation that has strongly embraced its
unique version of free enterprise. By most measures, China now ranks as the
worlds fourth-largest economy, trailing only the United States, Japan, and
Germany. Given its enormous population and vast natural resources, China
could challenge Japan for economic leadership within the Pacific Rim by
2020.
Even as economic growth has been impressive, the Chinese face major
challenges in coming years. One major issue is the growing income disparity
between the newly wealthy and the majority of the population, especially
those in rural areas. Tens of millions of Chinese citizens have seen strong
economic growth boost their standards of living. However, similar numbers of
Chinese have fallen further behind.
At the same time, powerful Chinese economic growth has led to serious issues
with environmental damage. Too many cities are covered with clouds of
polluted air, while too many rivers have been poisoned with industrial
runoff. Greater environmental protection must be factored into the Chinese
growth equation in coming years, a move likely to slow future economic
gains.
Chinas financial system is also fragile, with Chinese banks holding vast
amounts of uncollectible loans. Too many loans have been made based on
political relationships and cronyism. At the same time, a vast lending
network between Chinese citizens exists which bypasses the banking system.
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