Future of China in 2030: Panda Power

Introduction

Birth of a superpower

2009 - 2015

In a shocking move, the Chinese government agreed to take significant steps to reverse its negative impact on the environment at the Copenhagen Climate Conference 2009. In a statement released in September 2009, Chinese government officials pledged to reduce carbon emissions by 30% by the year 2030 and vowed to take the lead in the race to develop and commercialize a range of low carbon technologies. The last announcement of environmental regulations, standing in contrast to the U.S. avoidance to sign the carbon treaty, had emphasized the Chinese government’s moral superiority in the eyes of the nation, increasing a sense of nationalism within the country. Government officials stated that in order to ensure the country’s environmental future, it had to move towards a less carbon-intensive economy. These commitments, in addition to hosting world events such as the 2008 Beijing Olympics and 2010 World Expo in Shanghai, placed China in an influential position on the world stage.

While new environmental initiatives and world events strengthened China’s position globally, politicians in China were still seriously shaken by the 2008-2009 financial crises. They realized that their historical reliance on exports and the American dollar was not a viable long-term solution. The government understood that it would need to stimulate internal consumption in order to balance the nation’s GDP. If no changes had been made, the short-term public works-focused stimulus spending projects, although effective, were only of a limited scope and would have certainly lead to dangerous overcapacities in the future. Moreover, the government understood that narrowing the income gap between rural and urban residents while balancing the development of coastal and interior regions was necessary in order to ensure economic and social stability.

The first step towards strengthening their economic position was to balance economic development and recover from the 2008-09 recession; although China was still achieving 8% GDP growth in 2009, it was a far cry from the 10%+ growth the country had experienced the decade prior. In an effort to generate domestic consumption and increase local entrepreneurship, the Chinese government legalized private lending in late 2010. To avoid the risk of excessive debt-based consumption, the Chinese government heavily regulated lending practices. Legalized private lending coupled with the return of demand in the export market into 2011 allowed China to resume to its previous economic growth and finally overtake Japan to become the second largest economy in the world. The Beijing government made large investments in health care and education as a first step toward alleviating the growing social disparity. As incomes and the cost of labour grew throughout 2011 and 2012, the Chinese government realized that the country would have to move to more productive, service-oriented markets to ensure continued economic growth. In order to build the intellectual capital necessary to move into these high-value and innovative industries, the government invested heavily in universities and education programs. The goal was to emerge as a global leader in low carbon technology and related innovation. Only China, argued the government, with its strong central authority, had the focus of power required to make the large sweeping changes necessary to quickly realign to an environmental way of doing business and to capitalize on this. Relying on the great Chinese tradition of invention and creativity, the government founded environmental academies where the best and the brightest were assembled to come up with new and creative solutions to the environmental problems facing the world. Two years later the first of these academies opened its doors and within eighteen months China started selling environmental products and services to the rest of the world. This new growth engine enjoyed great demand both domestically and abroad, helping to perpetuate the already impressive economic growth. The Communist party did not miss this opportunity to further promote its regime as a prosperous contrast to the prolonged and stumbling recovery of Western democratic nations. National pride and support for the central government was at an all-time high.

At the same time, fearing a catastrophic population collapse caused by a heavily skewed gender imbalance, the Chinese government decided to incentivize families to bear female children under a revised one-child policy. The government was concerned not only about the future of the Chinese people, but also that the increasingly male-heavy population would have unknown consequences on childhood development and lead to future social unrest.

By 2015 confidence in the Communist party leadership had grown, investments in social welfare and low-carbon technology were being made and national cohesion had been enhanced. Government corruption had been significantly reduced through increased transparency, which subsequently increased the people’s faith in the government. China had finally begun to come out of its shell and take a role fitting to its success and size as one of the global superpowers. It was time to build on this momentum and make the changes necessary to finish the job.