Isabel Hilton, editor of chinadialogue.net, writes in the Guardian that after the euphoria of the recent Beijing Olympics wears off, China is going to have to deal with pressing problems like pollution and poverty:
A colder, greyer, post-Olympic world is coming into focus, a world in which most of China’s customers are cutting back on spending, inflation at home is running at least at 10% with no relief in sight, eroding the country’s competitiveness, and in which China must face the new challenges of maintaining high growth and social stability with the constraints of limited resources, energy shortages, concern over climate change and environmental exhaustion.
For the past decade, China’s cheap manufactured goods have helped its customers – in particular, the developed economies – to keep inflation low. Now, with its manufacturing costs rising, China is more likely to be a contributor to increasing prices internationally. Neither energy nor raw materials are likely to get cheaper, and the cost of migrant labour – hitherto the cheap input that has fuelled everything from rebuilding China’s cities to servicing its coastal factories – has risen sharply as industrial zones have spread inland and workers have found jobs closer to home. Employees have already made gains in wages and conditions, and many manufacturers, including Chinese firms, are looking at cheaper production sites.
Planners know China’s development model to date, while impressive in its results, is unsustainable: it is too carbon-intensive, too polluting and too inconsistent in its effects. Like every Asian tiger before it, China, the biggest tiger on the planet, has to meet the challenge of moving up the value chain, from T-shirts to hi-tech, from low-end production to high-value innovation, from energy-intensive to climate-friendly production. In recent years the early coastal industrial zones have begun to enter that stage, with waves of factory closures the harbingers of a new phase in the country’s development.