Has China's recent economic growth been able to sustain itself? It certainly has had the backing of the Chinese government and there have been positive indications that the economy will continue to grow. For the most part, they seem to be able to weather any storm. Will China's economic growth to be able to sustain its rapid rise or will it soon begin to stall? If so, what measures should the U.S. take in order to protect itself?
At this point in time, there are signs that China's economy is slowing down somewhat. The slowing down comes from both a domestic issue as well as an external factor. While there may not be a sudden crisis on the horizon, there are plenty of warning signs. If China were to continue with these economic growth trends, it would undoubtedly result in a much more dramatic slowdown down the road.
For starters, the Chinese government has begun to institute some beneficial programs for small and medium sized businesses (SMEs). The main one of these is the Special Economic Zone (SEZ), which is a set of industrial zones in China focused on specific industry sectors. This program seems to be working, at least so far, with the growth of certain industries in the zones showing significant signs of improvement. Unfortunately, this initiative is still relatively new, so it is unclear just how effective it would be until it is rolled out more fully.
One concern that analysts have is whether the continued growth will be sustained. The answer would be, at least so far, yes. However, some economists argue that it is necessary to make some structural changes to the current system before the country can truly become an economic powerhouse. They would also argue that these changes would need to happen quickly in order to avoid the negative consequences of a possible global economic crisis.
The question, then, becomes would the Chinese government have the staying power to enact such policies? Another worry that some have about the sustainability of the Chinese economy would be that a significant shift in the economy's direction could occur, with negative consequences for the Chinese people and the country. Some fear that with the pace of improvement that is . . . . . . occurring now, a major change may be coming soon. There is also some skepticism about the long term effects of continuing economic growth on China's overall quality of life.
One thing that is clear is that there is no sign of the rapid economic growth that many are expecting. Whether or not this is a sustainable rate remains to be seen. Meanwhile, it appears that while there is potential for tremendous improvement, it is not being utilized fully. If anything, this means that whatever improvements come would likely pale in comparison to what is to come in the future.