The Economic Growth of China – The Consequences and Effects on a global context

Background of the Study

Background of the Study

China started to reform as well as open up their economy from 1978 and because of that the GDP growth of China has averaged nearly 10 per cent per year, and this has simultaneously resulted in more than 800 million individuals being able to lift out of their poverty levels (Chow 2017). The rapid economic growth of China also resulted in significant improvements within their education system, access to healthcare, and other such crucial services over the same period of time. Although the high and fast paced growth of China was underpinned on their low-paid labour, exports, and manufacturing that is resource intensive it has received extensive criticism both from within as well as globally for their actions have led to environmental, economic, and social imbalances (Zhao and Tang 2018). The fast paced growth of China has made it central to significant global and regional development issues and it has been affecting the world through several ways, but most importantly, it has serious environmental consequences such as pollutions, emissions and so on (Zhang et al. 2017).

Problem Statement

The fast paced growth of China in terms of its economy has not only paved the way for rising anxieties across the entire world and especially United States but has also resulted in several consequences and implications for the rest of the world in terms of policies, trades, environment and so on (Lin and Liu 2016). China due to its economic boom has contributed significantly towards increasing the pollution levels both in their nation as well as other places of the world and especially their neighbouring regions and nations (Hye, Wizarat and Lau 2016). China’s economic growth, surprisingly has also resulted in increased unemployment due to state owned businesses being grossly inefficient. The agricultural sectors also reported a lot of disguised unemployment and direct unemployment levels (Li, Cheng and Gu 2019). For the rest of the world, other factors which are at play include the rapidly rising prices of oil, significant declines within the manufacturing sectors of the world, environmental issues as mentioned before, deficit in current account and so on, and these are considered to be the consequences of the rapid economic boom of China on the entire world (Umar et al. 2020).

Rationale

The above problem statement of this particular study which has been identified through the analysis of the current situation within China and its implications for the rest of the world within the context of the primary research question, will be resolved through conducting this research. The primary reason for conducting this research is therefore to deliver a detailed assessment or evaluation pertaining to the various factors that resulted in or have influenced the rapid economic growth of China as well as to analyse how this rapid and faced paced growth has been affecting the rest of the world in terms of the consequences and implications it brings with it (Ding, McQuoid and Karayalcin 2019). The significance of this topic lies mainly in the field of international relations as China and their relationship with other developing as well as developed countries are also being impacted due to their fast economic boom and resulting actions (Riti et al. 2017).

Problem Statement

Research Aims and Objectives

Research topic: The Economic Growth of China – The Consequences and Effects on a global context.

The primary aim of the research or study is to critically analyse the rapid economic growth of China as well as to deeply assess its effects and implications for the rest of the world. In the context of this, the research will also aim to analyse and identify the changing relations of China with the rest of the world and the various strategies they can adopt to mitigate the several developmental issues they have caused in the term of their rapid growth.

On the basis of the research aim, the research objectives are;

• To analyse the economic growth of China critically.
• To assess the implications and effects of this economic growth for the rest of the world.
• To identify and analyse the changing relations of China with the rest of the world.
• To identify and develop strategies or recommendations to mitigate the adverse effects of their economic boom.

Research Questions

On the basis of the above research aims and objectives the following research questions can be incorporated into the study so as to reach the desired results. The questions are;

RQ1: How has China achieved and maintained their economic growth? What factors contributed to this economic growth?

RQ2: What are the implications and effects of this economic growth of China for the rest of the world?

RQ3: How does the economic growth of China influence their relationships with the rest of the world?

RQ4: What are some recommendations or strategies that can be adopted so as to mitigate the adverse effects of China’s economic boom?

Research Hypothesis

H0: There are no such impacts pertaining to China’s economic growth for the rest of the world.

H1: There are significant impacts pertaining to China’s economic growth for the rest of the world.

The Economic Growth of China

Due to the fast paced growth of the Chinese economy China is now recognised as a country who belongs to the upper middle income class (Zhou et al. 2018). Although the Chinese economic high growth has reached a limit which directly contributes to environmental, economic, and social imbalances in a global context due to China’s dependence on resource intensive manufacturing, labour that is low paid, and excessive exports (Wu et al. 2019). According to Boamah et al. (2017) the last few years have witnessed a decline or slight moderation in the Chinese economic growth due to their frequent emergence of structural constraints, increasingly slow productivity, significant decline in the growth of the labor force, and lastly their diminishing returns to the investment. According to Wu, Zhuo and Wu (2017) the primary challenge that is currently faced by China is to identify and incorporate new growth driving factors into their economic system while at the same time addressing the environmental and social legacies pertaining to the conventional Chinese development path. The problem also pertains to the economic growth exceeding the institutional development pace which leads to several reform and institutional gaps that is necessary for China to address so as to ensure a sustainable and high quality growth path that will have very little to no negative impacts for the rest of the world (Zhang and Gao 2016).

Rationale

The Implications and Effects of Chinese Economic Growth for the Rest of the World

According to Wang and Su (2019) there are several effects and implications that has been observed and recorded in the past pertaining to China’s rapid economic development and its impact on a global context. The first and most important element is pollution as it significantly contributes to global warming and climate change. The manufacturing as well as other operations within China contribute to water, land and air pollution that not only affect their neighbouring regions but also the rest of the world wherever China exports their technologies (Pan and Mishra 2018). Chinese businesses and enterprises are also known to contribute significantly in increasingly the carbon emissions level wherever they operate in the world. Secondly, China was a deciding body for raising the oil prices which has impacted places like the United Kingdoms and others and have also multiplied the incentive to lessen or reduce the oil consumption and develop other alternatives (which is not really a disadvantage in terms of the environment) (Wu et al. 2017). Thirdly, the rise of the Chinese industry for manufactured goods has resulted in the decline of manufacturing processes of other large nations such as the US, UK, Europe.

The Changing Relations of China with the Rest of the World

Due to the increase in the relative exposure of the world towards China and the decrease of China’s exposure to the world, many confirms the signs of the stresses within the relationship between China and that particular region. Frequent trade disputes are receiving great attention and therefore media attention as well. Changing relationships are also giving rise to new laws and rules pertaining to the critical evaluation of the Chinese technology flows and has also marked a rise in the protectionism of other nations. The changing relationships have also witnessed a steep rise in the geopolitical tensions which have also become heated. This paves the way for an uncertain future in the relationship between China and rest of the world that will impact extensively in business and trade, education, policies, laws and so much more. China has established and maintained their integration with the rest of the world on the basis of eight dimensions which include trade, firms, capital, people, technology, data, culture, and environmental impact. The shift within the exposure that entails an increase in the world’s exposure towards China and a fall in China’s exposure to the world on the basis of three dimensions which include capital, trade, and technology.  

Research Aims and Objectives

Recommendations to Mitigate the Adverse Effects of their Economic Boom

There are several areas in which China can put in additional efforts to come up with effective strategies and recommendations so as to mitigate the adverse effects of China’s economic boom (Tong and Yu 2018). The areas in which China can invest in so as to mitigate their adverse effects are as follows; promoting a more greener growth by effectively reducing their marine plastic, air, water, and soil pollution from their business and other such operations; they can also strengthen their management of sustainable natural resources so that their exploitation can be addressed; promoting ways and strategies to lower the carbon emissions within cities, businesses and transportation by facilitating a transition to a much lesser carbon energy pathway (Zafar et al. 2019). Several other studies have also provided few recommendations pertaining to the sharing of the benefits of economic growth with other cities and regions who have not yet made such advanacements and require external support to get by (Su and Liu 2016). Many experts have focused on advancing the fiscal and market reforms through the improvement of the competitive environment as well as the development of the private sector.

Research Philosophy

The research philosophy is mostly utilised within studies to create an in depth analysis as well as assist with the expansion of the research. Research philosophy helps to set the research paradigm and is crucial for determining the research methodology context. There are three primary research philosophy types which are used extensively within contemporary researches and those include realism, positivism, and interpretivism. Where the interpretivism paradigm is mainly used to evaluate the operations, management, as well as functions of the research, the positivism method mainly criticises as well as analyses the logical concepts found within the study. On the other hand, realism is a paradigm that uses a mixed approach. The current study will undertake the positivism philosophy to study the notions and theories critically in the context of the Chinese economic growth and their worldwide impact so as to generate detailed conclusions.

Research Design

The research design includes the type of approach the research will be taking while conducting the study. Primarily, there are three research designs which are used extensively and these include explanatory, exploratory, and analytical designs. The explanatory research approach utilises methods that can create significant connection between two or more research variables, whereas the exploratory research involves assessing the entire topic in the initial stage, and lastly the analytical design is utilised to assess and then understand the research in a descriptive manner. This study will employ the explanatory method which will help to create a link between the research variables and come to a suitable conclusion through appropriate evidence to back it up. The research will deploy mixed method secondary approach.

Research Questions

Data Collection

The data for this research will be collected with the help of secondary sources which will be taken from previous studies and researches as well as case studies pertaining to or are related to the topic of economic growth in China and its consequences for the world. Literature review for this study will be carried out by deploying the action research process. The action research will include analysis of the articles and journals collected from relevant online sources.

Sampling and Sample Size

The sampling method and sample size of this current research will be most definitely influenced by the type of research the authors have conducted in their research paper from which data is being collected. It is necessary to describe the population, time scales and other significant attributes so that the audiences can check for themselves the valiadity of the secondary researches from which data has been collected for analysis. The studies that will be chosen for conducting and informing this research will have the time stamp of 2015 to 2021 so as to make sure that the collected data is up to date.

Data Analysis

The qualitative analysis is used for making thematic representations from the primary study concepts and the quantitative analysis includes structured analysis through the use of graphical representations, numerics, and charts so as to make comprehensive comparisons and analyses. The particular study will deploy a mixed method of data analysis for relevant previous researches by using comparative statistics and graphs as well as thematic analysis of the identified research variables as well as the data that will be collected from the secondary sources.

Ethical Considerations

When the research will be conducted the researcher will follow strict ethical protocols by correctly referencing and citing the literature taken from previous studies and researches and anybody who participates or engages with the research must be briefed about the purpose of the research in detail and the reason for conducting this. There will be no pressure on anybody as they will be allowed to remain flexible throughout the research process. The authenticity of the data will also be maintained whenever information from other papers and researches are being collected. It is necessary to check the authenticity and validity of the data as well as their relevance to the case before writing the final research report.  

Limitations of the Study

The primary limitation of this study is using only secondary sources for the purpose of data collection. Secondary resources may be time saving and also a quick access to information and data which has been already verified by other researchers and experts, but it also limits the gain of a fresh perspective which is imperative to conduct a current and relevant research with all correct contemporary information. Secondary researches also limits the opportunity to generate new ideas and ways as the main and other significant points have already been made in the previous papers.

Research Hypothesis

Conclusion

Therefore, in conclusion, it can be said that the issue of economic growth of China has a tremendous impact and has its consequences across the globe. This is further highlighted by the growing consensus of the environmental concerns across the globe, considering the contemporary context. Therefore, this topic of the research has its relevance not only in China, but across world wide borders. This proposed research is aimed to utilized a secondary research analysis on the basis of action research in order to deduce the contemporary issues and discuss them in detail in the context of international relations.

Reference List

Boamah, K., Du, J., Bediako, I., Boamah, A., Abdul-Rasheed, A. and Owusu, S., 2017. Carbon dioxide emission and economic growth of China-the role of international trade. Environmental Science & Pollution Research, 24(14).

Chow, G.C., 2017. Capital formation and economic growth in China (pp. 1186-1221). Brill.

Ding, Y., McQuoid, A. and Karayalcin, C., 2019. Fiscal decentralization, fiscal reform, and economic growth in china. China Economic Review, 53, pp.152-167.

Hye, Q.M.A., Wizarat, S. and Lau, W.Y., 2016. The impact of trade openness on economic growth in China: An empirical analysis. The Journal of Asian Finance, Economics, and Business, 3(3), pp.27-37.

Li, Z.G., Cheng, H. and Gu, T.Y., 2019. Research on dynamic relationship between natural gas consumption and economic growth in China. Structural Change and Economic Dynamics, 49, pp.334-339.

Lin, B. and Liu, C., 2016. Why is electricity consumption inconsistent with economic growth in China?. Energy Policy, 88, pp.310-316.

Pan, L. and Mishra, V., 2018. Stock market development and economic growth: Empirical evidence from China. Economic Modelling, 68, pp.661-673.

Riti, J.S., Song, D., Shu, Y. and Kamah, M., 2017. Decoupling CO2 emission and economic growth in China: is there consistency in estimation results in analyzing environmental Kuznets curve?. Journal of Cleaner Production, 166, pp.1448-1461.

Su, Y. and Liu, Z., 2016. The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities. China Economic Review, 37, pp.97-109.

Tong, T. and Yu, T.E., 2018. Transportation and economic growth in China: A heterogeneous panel cointegration and causality analysis. Journal of Transport Geography, 73, pp.120-130.

Umar, M., Ji, X., Kirikkaleli, D., Shahbaz, M. and Zhou, X., 2020. Environmental cost of natural resources utilization and economic growth: Can China shift some burden through globalization for sustainable development?. Sustainable Development, 28(6), pp.1678-1688.

Wang, Q. and Su, M., 2019. The effects of urbanization and industrialization on decoupling economic growth from carbon emission–a case study of China. Sustainable Cities and Society, 51, p.101758.

Wu, J., Zhuo, S. and Wu, Z., 2017. National innovation system, social entrepreneurship, and rural economic growth in China. Technological Forecasting and Social Change, 121, pp.238-250.

Wu, T., Perrings, C., Kinzig, A., Collins, J.P., Minteer, B.A. and Daszak, P., 2017. Economic growth, urbanization, globalization, and the risks of emerging infectious diseases in China: a review. Ambio, 46(1), pp.18-29.

Wu, W., Cheng, Y., Lin, X. and Yao, X., 2019. How does the implementation of the Policy of Electricity Substitution influence green economic growth in China?. Energy policy, 131, pp.251-261.

Zafar, M.W., Shahbaz, M., Hou, F. and Sinha, A., 2019. From nonrenewable to renewable energy and its impact on economic growth: the role of research & development expenditures in Asia-Pacific Economic Cooperation countries. Journal of cleaner production, 212, pp.1166-1178.

Zhang, C., Zhou, K., Yang, S. and Shao, Z., 2017. On electricity consumption and economic growth in China. Renewable and Sustainable Energy Reviews, 76, pp.353-368.

Zhang, L. and Gao, J., 2016. Exploring the effects of international tourism on China's economic growth, energy consumption and environmental pollution: Evidence from a regional panel analysis. Renewable and Sustainable Energy Reviews, 53, pp.225-234.

Zhao, J. and Tang, J., 2018. Industrial structure change and economic growth: A China-Russia comparison. China Economic Review, 47, pp.219-233.

Zhou, G., Gong, K., Luo, S. and Xu, G., 2018. Inclusive finance, human capital and regional economic growth in China. Sustainability, 10(4), p.1194.