The document discusses China's transition to becoming a high-income country by 2030 and the challenges it faces. Rapid economic growth has led to issues like inequality, an aging population, and maintaining stability. While continued development could result in China becoming a responsible global power, population decline and social problems threaten to undermine progress unless addressed. Managing this transition period will test China's ability to reform and avoid potentially unstable outcomes.

2. The New China
Donald C. Menzel, Ph.D.
China Futures
&
the Chinese Dream
Session 6

3. Is there a 4th NEW China on the
horizon?

4. Is this the face of the 4th NEW
China?

5. Is this the face of the 4th NEW
China?

6. Portrait?
• Peaceful rise . . . gentle giant act—Tom
Friedman
• Slow motion revolution—Ian Johnson
• Rogue economic superpower—Paul Krugman
• China’s view--the future belongs to us

8. What can go right?
• Economy & employment
• Exports & Consumerism in China
• Standard of living improves
– Food
– Health
– Materialism
• Social harmony
• International respect

9. Growing Up is Hard to Do!
• The middle-income trap—High growth has
been propelled by low cost labor and easy
technology adoption but these disappear
when countries reach middle and upper
middle income levels, forcing them to find
new sources of growth.
• Chinese leaders are trying to deflate a real
estate bubble by banning most purchases of
second and third homes.

10. The World Bank:
On the Road to 2030
• Goal—to become a high income country
• China should complete its transition to a
market economy . . .
• Must focus on the quality of growth, not just
quantity of growth
• A modern society is industrialized and
urbanized and enjoys a quality of life that is on
par with the Western world.

11. What can go wrong?

12. Population
• Expansion—1.5 billion people by 2030
• Approaching zero population growth
– Birth rates are low with 1.7 per woman per
lifetime
– Need 2.1 for long-term replacement
– Due in part to 1979 population control 1-child
policy
• Aging population with life expectancy
assumed to lengthen by 2030

13. Consequence
• 2030 China’s median age will be over 41,
higher than Europe or the U.S.
• In this future China, there would be more
than three senior citizens for each young
child.
• The growing army of older people in China
are listless and lost, pessimistic and
frightened‖ says Gerard Lemos in The End
of the Chinese Dream (2012)

14. China Futures
• Demographic outlook is unfavorable
• China’s demographic trends are strikingly
similar to the Soviet Union’s a generation
ago.
• Rising nationalism? Aggressiveness?
Militarism? Or,
• Peaceful evolution and mature
international responsibility?

15. Significant Events
2013 & Beyond
• China becomes ―Americanized?‖
• China becomes a ―responsible‖ international power?
• China becomes a ―democracy‖?
• China becomes a ―failed‖ state?

17. What is the China dream?
• 1980s it was prosperity, security, stability
• Not so now—family well being, keeping a job,
not getting sick, affording medical treatment,
paying for their child’s education, having
enough to live on in their old age and
• Living in a neighborly community

18. The Happiness Factor
• Can social stability be bought by rapid
economic growth?
• Where has the “iron rice bowl” gone?
– Permanent jobs
– Extensive employer provided safety net
• Despite much lower levels of income, life
satisfaction among urban Chinese was almost
as high as in the developed world.—Richard A.
Easterlin

19. Happiness continued . . .
• 2007—only 27% of Chinese in lowest third of
the income distribution expressed satisfaction
with their financial situation, down from 42%
in 1990
• Economic growth is not enough—job security
and a social safety net are also critical to
people’s happiness
• Capitalism hasn’t made the Chinese more
satisfied with life

20. Threats
• Increasing wages for blue collar workers.
Wages have nearly tripled in the last seven
years or so.
• Slow economic growth could disrupt China’s
progress toward becoming a high income,
harmonious, and creative society.
• Managing the transition from a middle-
income to a high-income society will prove
challenging. World Bank rpt 2012

21. Social Inequality
• Deng Xiaoping’s admonishment, “To get rich is
glorious . . . “ was followed by . . .
• “Let some people get rich first . . .” And they have!
• "When China's leader Deng Xiaoping said, 'To get rich
is glorious,' I don't think he imagined that the chasm
between rich and poor in China could have serious
political implications."," Zeng Xiangquan, a labor
economist at People's University. "

22. Wealth Inequality

23. Questions
―Can China continue to prosper, while
censoring the Internet, controlling its news
media and insisting on a monopoly of political
power by the Chinese Communist Party?‖,
asks Tom Friedman.
―Can China develop its full potential by
offering its people economic freedom without
political freedom?‖

25. The End of the Chinese Dream
• China is no longer a party-state as Mao and his
successors intended.
• Instead it has become a market-state of
plutocrats seeking to dominant the Leviathan
with money if possible by force if necessary.
• The Chinese dream cultivated in the 1980s of
prosperity, security, stability and even the
beginning of freedom is at an end.—Gerard
Lemos

26. Want to know more about the
“new” China?
You can find my new multi-touch
book “The NEW China” in the
iBookstore or the text version at
Smashwords.com
Click on the images below.