Monday, November 3, 2008
China: Rich Country, Poor Country
We learned that China has a large and growing income inequity due to opening to the market economy in selective regions. This Forbes article tells you how China, once centrally planned economy, is changing to the market economy and becoming more open to the world and how severe imbalances China has in its areas of development. I think it's a good summary of what we covered in the class.
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I think this article covers a lot of ground in regards to China. It highlights the challenge of rapid economic growth without sufficient economic development and addresses China's new role and responsibility (?) as a global economic power. We often mention in class how capitalist economies tend to have more income inequality and negative externalities to keep costs down. China, as a transitional economy, seems to not yet have the infrastructure and regulations that an economy like the US has to offset some of the drastic differences and effects. (Although China has proposed an ambitious universal health care plan that would cover everyone by 2020.)
While it can be argued that China is still developing and so isn't ready for such regulation, if China is going to become a global influence and set an example then they should also be able to set and enforce welfare programs and more environmentally conscious regulation. Hopefully China won't ignore the well-being of its people in its rise to economic power (dismal human-rights record notwithstanding), as the consequences could negatively impact the country.
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