The Organisation for Economic Co-operation and Development (OECD) has recently forecast that China is set to overtake the US as the world's largest exporter and to surpass Britain, France and Italy as the world's fourth largest economy by 2010.
China was already the world's third largest trading nation in 2004 with US $1.16 trillion of trade, 35.7 % up from the previous year.
Recent US and EU China Chambers of Commerce surveys find that 75% of US and 61% of EU companies in China are profitable to very profitable, with 86% remaining optimistic about the future in spite of various concerns.
With the Associated Press report in Shanghai heralding the launch of China's second manned space mission on 13 October, is China sailing on course towards the sunny pleasure-dome of Xanadu?
Threatening dark clouds are clearly on the horizon, if not already overhead.
Minxin Pei of the US Carnegie Endowment for International Peace predicts that even at a much reduced growth rate of 5%, China would reach a per capita income level of US $ 7,000 in 35 years. He warns of an impossible society too strained by its current ailments if left untreated.
The red flag has been hoisted not only by US commentators but also by China's Ministry of Labour and Social Security in the China Daily on 22 August. Income disparity is said to have reached the crucial 'yellow' stage and if unabated, would worsen to the 'red' stage in 2010.
Accordingly to the National Bureau of Statistics, 10% of China's richest enjoy 45% of the nation's wealth while the poorest 10% share only 1.4%.
With persistent rural under-employment and reports of rapacious corruption especially at the village level, the Ministry of Public Security has highlighted a serious rise of 'mass incidents' or unrests to 74,000 in 2004, or over 8 per hour, a ten-fold increase over a decade.
Moreover, most of the vast masses of rural poor have no health insurance and little access to health care. With market reforms, most medical and health institutions have become profit-making businesses beyond their reach, according to a recent report on Reform of China's Medical and Healthcare System published jointly by the State Council and the World Health Organisation.
China's basic livelihood is also increasingly threatened by a looming water shortage. The World Bank has estimated that China's per capita fresh-water resource is only one-third of the world's average and half of the East Asia and Pacific average. Worse still, such limited resource is very unevenly distributed. 36% of China's land south of the Yangtze accounts for 80% of the available water supply while 64 % of the land north of the Yangtze shares 20% of the water. Also, let's not forget that China has a fifth of the world's population but only 7% of the arable land.
The water problem is exacerbated by widespread pollution. The State Environmental Protection Administration finds that industrial and human wastes have polluted all seven of China's main rivers and 25 out of 27 of its largest lakes.
China is likewise poorly endowed in its much needed energy resources, especially fossil oil. Its per capita oil consumption is but one-seventh of the developed countries' average while it accounts for only 8% (against US's 25%) of world consumption. But it is already the world's second largest oil consumer and drives one-third of the world's demand growth.
China's global quest for oil resources is pitching it against the world's major powers especially US and Japan. (See my back-number in this column on China is Everywhere, Everyday).
Indeed, China's rising global economic reach is generating increasing concerns and frictions amongst developed and developing countries alike, as jobs are lost and exports threatened in products ranging from textiles to other household goods.
The chart of increment weather or stormy clouds is by no means complete. China, after all, is a vast and diverse country with a land mass 16 times the size of France. But evidently, these problems already appear high up in the national agenda.
It is no coincidence that 'people-based', 'balanced', and 'sustainable' development was given more prominence than sheer GDP growth in the last National People's Congress in March this year. (See my back number in this column on National and International Dynamics of the 11th Five Year Plan (2006-10).)
It is also telling that one of the first measures Premier Wen introduced on assuming office was to order the phasing out of rural taxes. That was a precursor to the growing emphasis on addressing the so-called 'Three Rural' issues: agriculture, villages, and farmers.
Various national, regional and provincial development plans are coordinated to achieve the avowed objective of spreading economic development more evenly towards the backward provinces, especially in the North-East and the Central and Western Regions.
A deputy environment minister recently acknowledged openly to Der Spiegel that for the same unit value of production, China uses seven times more resources than Japan, six times more than the US, and even three times more than India. There is growing awareness than energy economy and alternative energy are important linchpins for national survival.
China is already the world's third largest bio-fuel producer, making 1 billion gallons of ethanol last year. 'Green' and 'blue' developments also increasingly feature in provincial or even city-level quantifiable work plans.
Examples of some these strategies, such as the so-called 'Pan-Pearl River Delta 9 + 2' blueprint, are embodied in my latest presentation on 'Dynamic Perspectives of the Pearl River Delta in the Coming Decades' under 'Publications'.
At the same time, an internal economy is growing fast, with the top 100 million consumers expected to reach Western standards of living by 2020. This should reduce over-reliance on exports.
Efforts, however limited, are also being made to nurture the development of 'grassroot' as well as 'intra-party' democracy' The provincial government of Sichuan, one of the largest provinces in China, has recently issued a directive that all townships are 'in principle' required to hold democratic elections for party secretaries this December. If materialised, this would be the first time direct elections for local party secretaries are held on a provincial scale.
A modern 'civil society' is showing signs of developing. There is more emphasis on the rule by law and increasing appreciation of the rule of law. Use of public opinion polls by city officials is not unheard of. Leaders ranging from President Hu and Premier Wen to some mayors of small local prefectures are openly acknowledging the use of the internet to obtain feedback on policies from the masses. Indeed, strategies to address some of the non-political issues are likely to be reflected in the forthcoming Fifth Plenum of the Party's Central Committee from 8 to 11 October.
In any case, the immensity and complexity of China's development challenges are daunting. If there are any crossroads, they would appear to be multi-dimensional and are unlikely to remain immutable.
One interpretation seems credible. If China is to rise at all, it simply cannot afford to do so other than peacefully.
Andrew K P Leung, SBS, FRSA
