BarcelonaThe economic slowdown, the real estate and financial crisis, the aging of the population and the growth of inequalities are some of the great challenges that will mark the future of the Chinese economic miracle. Beijing has sought to consolidate its position in the world in a game of alliances and global tensions. Let’s review some of the figures that help explain China today and mark how the Asian giant it can be tomorrow.
China is one of the fastest aging countries in the world. It now has 200 million people over the age of 65, who represent 14.2% of the population. The Asian giant’s population growth has slowed: after increasing by around 0.5% between 2005 and 2016, its population grew by just 0.03% last year. That is why the one-child policy was abandoned. Next year, China (1,410 million inhabitants) will cease to be the most populous country in the world: it will be India (1,390 million), where 86,000 babies are born every day, compared to China’s 49,400.
China is the world’s largest emitter of CO2 in absolute terms, but not per capita (in 2020 Americans emitted an average of 14.86 tons of CO2, compared to 8.05 for the Chinese, who also produce for all the world). It burns almost 50% of the world’s coal, and two thousand workers die in its mines every year according to official data, but at the same time it is the world’s leading investor in clean energy. The pandemic, the housing crisis and investment in renewables have reduced emissions by 8%. Beijing’s goal is to achieve climate neutrality by 2060.
The world’s second largest economy has suffered a significant slowdown. Already under heavy pressure from problems in the real estate sector and weakening global demand for Chinese-made goods, the surge in covid-19 cases raises fears of even lower results. After growing at rates of between 7% and 10%, international bodies have lowered forecasts for 2022 to between 3.3% and 4.3% due to external and internal uncertainties. The Chinese authorities have set a target of 5.5%.
The gap between rich and poor or between urban and rural China remains far above most developed countries and also the Asian average. The Gini index, which assesses social inequality, stood at 0.468 in 2020 (0 means that the entire population has the same income and 1 that a single person concentrates it all and the rest have nothing). Inequality narrowed between 2008 and 2015, but shot up again afterwards. President Xi Jinping has promised to alleviate this with the policy of “common prosperity”, but it has not worked.
China has experienced four decades of intense urbanization. The population living in cities has more than tripled since 1982. This has also meant a growth in internal migrants, which reached 376 million in 2020, 25% of the total population. Since last year, however, prices and the pace of home sales have collapsed and the real estate sector is falling into a huge slump. The public sector, companies and families have taken on more than 250% of GDP.
Although it is the second economic power in the world, China ranks 85th out of 189 countries in the human development index ranking. This index assesses three dimensions: a long and healthy life, access to knowledge and a decent standard of living. One of the elements that explain the draconian covid zero strategy is precisely the lack of a health system capable of dealing with the impact of the pandemic on such a large population and which, moreover, is poorly vaccinated.
The controversial purchase by China of a sector of the port of Hamburg has been the latest controversy. China has already bought 100 ports in 63 countries. And it is that Beijing is focusing on the purchase and construction of large infrastructures, with projects underway on the five continents. Chinese companies will also build the high-speed train that will link Hungary, Serbia and Greece. In Spain, Chinese investments have increased by 90% in the last year: they are concentrated in tourism, food and sport.
China has bought $970 billion in US Treasuries. Despite growing political tensions with the Joe Biden government over Taiwan, Beijing has not stopped buying US debt. The objectives are twofold: to slow the fall of the yuan, which has fallen 9.3% against the dollar, and to have a weapon of pressure in the negotiations with Washington. But at the same time, China does not want the value of American debt to collapse, because that would also mean heavy losses.
Sources: World Bank, US Treasury Department, UNDP, China National Bureau of Statistics, Carbon Brief.
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