Challenges for the Chinese economy in the early 21st century

Thursday, 9:00-11:00, 501





The Chinese economy has achieved many different benchmarks as a result of its three decades-long economic reform. Today, China stands as the second largest economy in the world, a strong political power in the international relations arena and a major actor in promoting growth in other developing economies. This panel is interested in examining what are the challenges faced by China within, following three decades of reforms and looking into the future? Focusing on current affairs, the panel will investigate issues relevant to the Chinese economy, society, energy market and environment, which affect the Chinese population and its leadership today.


Coal or not to coal… China’s energy Scenario 2010-2050

It is generally agreed that global industrialization and modernization is responsible for release of Green House Gases (GHG) resulting in global warming and its subsequent consequences and impacts upon our lives. In accord with the Netherlands Environment Assessment Agency China has overtaken the U.S.A. to become the No. 1 emitter of GHG in the world. In 2007 China released 6.6 billion tons CO2 equivalent. As a result of international pressure, surging urban air pollution in China and the UN Climate Change Conference held in Copenhagen in December 2009 and in Can Cun December 2010, the Government of China is making strident steps to increase installation of renewable energy infrastructure and to reduce its dependence upon fossil fuels. In the current context by 2010, China plans to increase the share of renewable energies of its total installed energy capacity to 20 per cent. This is equivalent to 200 GW total installed capacity and is expected to be made up of 190 GW from hydropower installations, 4 GW from wind energy, 6 GW from biomass utilization and 450 MW from solar power.

By 2020 China has set a target to obtain 15 percent of its energy from clean energy sources- excluding large hydropower. If China’s commitment to diversify its energy supply and to become a global leader in renewable energy persists, clean energy could provide 30 percent of the nation’s energy by 2050. In order to achieve this goal, China has developed its own national strategy for renewable energies and, in cooperation with other stakeholders, will raise €50 billion for investment. Wind and solar energy are expanding particularly rapidly in China, with production of wind turbines and solar cells both doubling in 2006. China is poised to pass world solar and wind manufacturing leaders in Europe, Japan, and North America in the next three years, and it already dominates the markets for solar hot water and small hydropower.

However, data on renewable energy as a percentage of total energy presents only part of the story. With China’s dynamic economy and rapidly expanding energy demand, consumption and dependence upon fossil fuels, and in particular coal, will continue to increase. China’s carbon dioxide emissions are expected to continue to rise to above 25% of the total global CO2 emissions by 2030 and coal consumption is expected to increase by at least 35% by 2020.


Demographic Challenges in China’s Immediate Future

In the wake of China ’s One Child Policy (1979), the country faces massive demographic challenges as these cohorts reach maturity. This presentation will briefly describe the challenges faced by the country, and the potential policy responses. In particular, I will focus on China ’s high sex ratio and high dependency ratio, and how this will lead to problems in China ’s marriage market and in the country’s ability to care for its elderly. I conclude with a discussion of social insurance mechanisms necessary to ensure China ’s social and economic stability in the 21st century.


What does being the second biggest world economy mean to the Chinese people?

Earlier this year China reached the position as the 'second largest economy in the world' with a Nominal GDP of some 5 trillion US$. An amazing achievement, for an economy in which only three decades ago 54% of the population lived blow the 1 US$ a day poverty line. This strong economic position helps China to strengthen its political standing and international relations. But – what does this mean for the Chinese people?

In this presentation I will examine the impact of China's WTO accession, international relations and economic liberalization in recent years on various sectors in the Chinese economy. I will demonstrate that together with higher incomes, rising purchasing power and improvement in living standards, the Chinese population has benefitted from stronger transparency, improved technology, and better terms of trade for most of the Chinese farmers.

At the same time, several sectors in the Chinese economy have suffered from the WTO accession (such as textile, light manufacturing); Chinese labourers see higher wage differentials; rising inflation affect real income across China; poor farmers lose existing protection and do not gain sufficient access to markets and credit; export sectors with less comparative advantage begin to suffer due to gradual appreciation in the Yuan; and all the Chinese people suffer from rising environmental degradation.


China's climate change mitigation: policies and positions

It will give a background of China’s climate change mitigation policies and positions, including the new progress to meet the 20% target of energy intensity set for the 11th Five Year Plan, policy options in coming 12th Five Year Plan and positions in recent climate negotiations. It could be impressed that China is taking double strategies at international and national level. In fact, things are more complicated that what it appears. Climate change is one the greatest challenges for China to balance between the need of economic development and energy and climate security. Some driving forces behind China's rapid growth of energy consumption and emissions have to be taken into account. It will also try to explain and analyze some arguments even misunderstandings from Chinese perspectives to present a clearer whole picture.