Rapid Economic Development Case Study — China Flashcards
Location & importance, industrial structure of economy, role of TNCs, changing political & trading relationships, international aid, environmental impacts, effect on quality of life
Regional, National, International Importance
World’s largest importer/exporter;
String of Pearls — network of places of military and commercial facilities and relationships;
“World’s factory”;
Consumes 50% world’s raw material;
Aid to Africa in return for natural resources;
Location
East Asia;
Borders with 14 countries (some of which are Vietnam, India, Mongolia, Thailand, Nepal, and Russia);
Coast with South China Sea and Pacific Ocean;
Himalayan Mountains
Social + Cultural Context
One child policy to reduce population size; Birth rate: 12.3/1000; Infant mortality rate 12/1000; Life expectancy: 75.7 years; GDP per Capita (PPP): $15,400 in 2016; Literacy rate: 94.6%; Death rate: 7.8/1000 Population: around 1.3 billion; Most people between ages of 25-55
Political Context
Communist — one party since 1949;
1978 Peng Xioping: ‘open door policy’ —> welcomed TNCs + open the country to foreign investment and
encouraged development of a market economy and
private sectors (market oriented economy)
Environmental Context
Pollution from industries;
Cancer villages;
High pollution in big cities like Beijing on East coast;
World’s largest polluter
Industrial/Employment Structure
Less people working in primary sector compared to nearly 50% in 2003;
Slightly more people working in secondary sector (10% increase from 1986 to 2012);
More people working in tertiary sector (tripled from 1986 to 2012)
Role of Transnational Corporations: Industrial Development
Boost development through FDI + jobs;
TNCs are attracted to China due to the market they provide;
TNCs can set up and leave just as quickly. If China’s wages rise as Trade Unions develop, some TNCs will leave. Currently, they make up 30% of China’s sales so China is heavily dependent on them
Role of Transnational Corporations: Advantages
Creation of jobs (direct and indirect);
Stable income and more reliable than farming;
Improved education and skills;
Investment in infrastructure, eg, new roads, helps locals as well as TNC;
Increased local spending by workers;
FDI from TNCs increases;
Help to exploit natural resources;
Better developed economic base for the country;
Opens markets and trading with other countries;
Increases local demand for goods and services which increases government (or private sector) investment
Role of Transnational Corporations: Disadvantages
Fewer workers employed considering the scale of investment;
Poorer working conditions for workers;
Damage to the environment by ignoring local laws;
Profits going to companies rather than locals;
Little reinvestment in the local area;
Jobs are insecure. If labor costs increase, the company may move elsewhere — country becomes too dependent on TNCs;
Natural resources being over-exploited
Political and Trading Relationships
One of biggest importers and exporters worldwide;
‘String of Pearls’: geopolitical theory showing sphere of influence by building ports, military bases, and surveillance facilities in the region;
China wants to control South China Sea —> control over oil trade;
Only Pakistan, Russia, Malaysia, Indonesia agree with China’s views;
Top 5 faster growing routes mostly in SE Asia (Vietnam, Thailand, Indonesia), also growing trade links with Brazil and S Africa;
If China’s economy was to slump, only N America + Europe would suffer a medium risk, everyone else is high risk;
Provides aid to whole of SE Asia + E Africa. Used as political tool (soft-diplomacy), with conditions: China wants resources and their support in voting in large organizations
International Aid and Impacts
Tied aid: When one country donates money or resources to another but with conditions attached. These conditions will often be in the HICs favor;
Development aid: Involves providing local communities with education and skills for sustainable development, usually through NGOs;
Emergency aid: Aid given after sudden disasters, commonly natural disasters;
Charitable aid: Funded by donations and charities by the public through organizations such as Oxfam;
Multilateral aid: Aid given through international organizations (e.g. world bank) rather than by one specific country;
Bilateral aid: Aid given by one country (donor) to another country (recipient), can make the receiving country more dependent on aid;
Foreign aid into China: To promote Tibet, human rights, democracy initiatives;
China’s soft diplomacy: Construction to benefit other countries —> instead of money, ‘stadium diplomacy’ - uses Africa’s most popular sport. For China —> boosts trade, investments and diplomatic relations in Africa - hydro-electric power —> access to resources - copper mines;
Soft power: Power of persuasion —> follow their ideas + policies if make them attractive
Environmental Impacts of Economic Development: Biodiversity/Cancer Villages
Hunting down animals to extinction for body parts (eg, elephants + rhinos);
Cut down trees to make more farmland, bamboo plantations, timber…;
Cancer villages: contaminated water from industries, people most affected are from smaller villages near industries (eastern side of China)
Environmental Impacts of Economic Development: Air Quality
China is largest producer of air pollution —> 27%;
Smog;
Beijing is 40x over for chemical;
80% of China’s 367 cities failed to meet government regulations for small particles;
China is largest consumer/producer of coal;
Uses 50% of world’s coal supply
Environmental Impacts of Economic Development: Water Quality
North is dry vs South is wet — all agriculture in North;
Severe water stress;
50% water is too polluted to consume;
1/4 water cannot be used for industrial use;
Heavy metal contaminate (mercury) that is very hard to get rid of due to industries removing waste in rivers
Environmental Impacts of Economic Development: Desertification
Caused by deforestation (due to more agricultural land being built);
Causes arable lands which turns into desert (sand storms due to sand erosion);
1/4 of china’s total land is desert and this takes 300 years to reverse;
Desertification causes eco migrants
because land is not arable;
9.6 million square km has been deforested;
Population pressure + conversion of forests into farmland/hydroelectric are the causes of deforestation
Environmental Impacts of Economic Development: Resource Use
40-50% of global production of copper,steel, zinc, aluminium is consumed by china;
Imports half the planet’s tropical logs;
1/4 of china’s carbon emissions is produced by making goods for exports
Effects of Economic Activity on Quality of Life
The wealthier population’s quality of life improves (they are generally happier than the poorer population);
Poorer population quality of life deteriorates — they must work harder to have basic accommodation;
Urban areas have higher quality of life than rural areas;
Global scale: China has lower life quality;
% spent in housing has increased more than
anywhere else — houses are harder to get
