ABSTRACT
One of the most visible changes to China’s security policies since the period of the Deng Xiaoping reforms of the late 1970s has been the increasing overlap between Beijing’s growing economic interests and its strategic concerns. China’s economic power has continued to mature on an international scale since the 1990s, with the country achieving the status of second largest global economy behind the United States as of early 2011, with some studies suggesting that the Chinese economy may surpass the total GDP of the United States in 2016 or shortly thereafter. 1 While some analysts have even suggested that China has already surpassed American economic power at least from certain viewpoints (such as purchasing power parity (PPP)), 2 others have noted that China’s economy still faces a long period of continuing reform with many domestic challenges yet to be overcome. A 2013 book on China’s international power acknowledged the country’s great economic gains of the past three decades, but noted that the Chinese economy remained overly dependent on exports at the expense of domestic development, and with its lack of multinational corporations and global brands, the study concluded, China is a ‘partial economic power’. 3
Although China’s economic growth remains impressive, there is still a host of considerable economic challenges facing the country’s policymakers. China’s large population presents a unique set of challenges to Beijing’s economic policies. As Chinese political analyst Zheng Bijian noted, China faces a ‘multiplication/division’ conundrum, namely that any socio-economic problems, even small ones, have the potential of being multiplied by 1.3 billion, China’s current population, and any economic gains, regardless of size, must be divided among those same 1.3 billion Chinese citizens. 4 Despite China’s impressive overall growth, per capita income remains low by Western standards, estimated by the World Bank to be approximately US$6,560 in 2013. 5 Other socio-economic issues, including corruption and mismanagement, the challenges of developing a welfare state, reforming the country’s large agricultural sector, growing urbanization (estimated to be at 53.7 per cent of the population in early 2014), 6 and income inequality, especially between coast and interior, continue to challenge the Chinese government. Deng’s suggestion that the country should ‘let some people get rich first’ did assist with the reform process by opening the doors to more robust economic growth, but also created widening income
gaps between richer and poorer citizens that are still major policy concerns today. According to a January 2014 report by China’s National Bureau of Statistics, the Gini Coefficient in China stood at 0.47 in 2013, up from 0.42 per cent in 2009. 7 As any figure above 0.4 is seen as an indicator of potential public unrest, it has been a priority for Beijing since the start of the reform era to better address underdevelopment levels, especially in the country’s interior.
