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China: Now and in the Future

China Chinese economy Chinese military poverty income inequality superpower South China Sea East Asia developed country

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#1
BarkEater93

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China has often been regarded to be the potential next superpower. It has the world’s second largest economy, and it still has an impressive growth rate. Millions of people have escaped poverty and moved to China’s modernizing cities. The country has made some striking achievements in technological research. Big progress in automation and switching to renewable energies seem promising. Chinese companies are investing heavily in Africa, among other places. And the Chinese military has been acquiring lots of new equipment and building enormous islands in the South China Sea.
 
Despite all of this, China still has many obstacles to go over if it’s to become the next superpower. Not only that; the figures that Xi and most economists present are misleading. There’s a lot going on behind the flashy headlines that are not hard to see, but rarely acknowledged. I take the unpopular view that China will NOT become a superpower; and far from being a challenger to the United States. In fact, I think China will be facing ever growing internal problems and that the country will destabilize. 
 
I’m going to follow up with a series of posts on what these obstacles are, and then after taking them into consideration, say what I think actually lies ahead for China. 
 

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#2
BarkEater93

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Poverty and Inequality

 

I could write many pages on this but I’ll try to stick to the most important figures and sum it all up.

Here’s a map depicting the average GDP per capita (in US dollars) of China’s provinces. Data is from 2015.

 

20161001_CNM992.png

 

What’s apparent is the huge divide in wealth between the coastal provinces (plus Inner Mongolia) and the interior. The wealthier provinces coloured in red, purple and brown account for a small fraction of the country’s land area, and although they are more densely populated, they also account for only 28% of the population. So all of the areas of China coloured in the various shades of pink, almost three quarters of the population, earn less than the average GDP per capita of such countries as Peru and Indonesia (both of which are over $10,000). And I haven’t even taken into account the huge disparity between urban and rural populations yet.

 

1459995211127_e13FiveYearPlan-c2_473923.

Source: National Bureau of Statistics of China

 

This graph shows that in 2015, urban households were on average earning almost three times as much as rural ones. The average annual disposable income of a rural household was 11,422 yuan (about $1,800 2015 US dollars).

 

But China has rapidly been urbanizing, right? True, many people have moved into China’s cities, but as of last year some 44% of the population was still rural. And the vast majority of this rural population have incomes comparable to those in Sub-Saharan Africa. Many of these people still rely on subsistence farming, don’t have electricity or a proper education.

 

When Xi Jinping or the World Bank say that 700 million Chinese have been taken out of poverty, it doesn’t say that much. What is the threshold for poverty? How are all of those people doing?

 

The threshold that the World Bank uses for extreme poverty is $3.10 a day. In 2013, only 150 million Chinese were living under this threshold. Seems like a really good figure. However, this is a very low standard; there are not many populations under this threshold anyways. A household could be making $4.00 a day and still be crippling poor.

 

The Chinese hierarchy can be summed like this: the poor people can be represented by a large cake; the growing but still very small middle-class are like the frosting concealing most of the cake underneath; with the elites sprinkled on top.

 

China has done some extraordinary things. This is not to belittle the truly epic transformation that has taken place. Many millions of people have moved to the cities and have become wealthy. But many more millions have not. And China still has a loooooong way to go before it can become a developed nation with a prosperous population.



#3
TranscendingGod

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China's middle class is now larger than the United States. http://www.telegraph...-the-world.html

 

While you're absolutely right that it is still developing, the sheer scale of the country gives it enormous potential where even considering the disparity between the coastal and rural regions we are seeing amazing growth that, barring anything catastrophic, will lead to China overtaking the United States as the economic superpower in the next decade. Of course the disparity between coastal and urban populations when compared to their rural counterparts is not a phenomenon constrained to China but to all countries to some extent. 

 

This disparity is as evident in the United States as it is in China. https://www.washingt...=.615ae93ca311 

 

The case is the same with India. 

 

Anyways China is obviously becoming the leader in many fronts including some of the largest which include robotics, "green" energy, and computer chips. China is the largest producer of wind turbines, solar panels, and has the largest market for growth in robotics. 

 

Anyways people have been touting China's demise ever since others were touting its rise. As of yet even given the less than concrete nature of its internal economic data China is considered by most economist to be growing apace second only to India when we speak of major economies. 

 

Oh yeah China is coming  to dominate the phone industry as well with companies like Xiaomi, Huawei, and others. They are also the largest market for automobiles. A lot of other stuff. 


The growth of computation is doubly exponential growth. 


#4
TranscendingGod

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Also I find it interesting that you talk about Sub-Saharan Africa considering the very gains that Africa is making. Africa will soon be the fastest growing region in the world and in fact many countries in Africa already have the largest rates of growth albeit with most being in parts other than Sub-Saharan Africa. 


The growth of computation is doubly exponential growth. 


#5
BarkEater93

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China's middle class is now larger than the United States. http://www.telegraph...-the-world.html

 

See, that's one of the big problems with these statistical figures; the article says 109 million people are now in the middle class, and it's the biggest in the world, but so is China's total population. What about all those other 1.2 BILLION people? This would be impressive if these 109 million people were in their own country, but they're not. They can't just pretend that all of these other 1.2 billion people (or even half that), don't exist.  

 

 

This disparity is as evident in the United States as it is in China. https://www.washingt...=.615ae93ca311�

 

You don't have the immense slums sitting beside high-rise urban centres in the U.S. like you do in China. Nowhere in the U.S. is there a state in a truly Third World condition beside another in a First World condition (or resembling one). Wealth is much more evenly distributed across the American states. It isn't cocentrated in one region. Sure West Virginia has quite a bit lower GDP per capita than New York State, but the difference in the standard of living is nothing when comparing Guizhou with Beijing. Someone making $4,800 a year in Guizhou (the average) is struggling to keep a roof over their head, getting enough food to survive on and likely isn't properly educated. Someone making $17,100 in Beijing (the average there) isn't exactly middle class by American standards, but is probably able to get along.

 

 

Anyways China is obviously becoming the leader in many fronts including some of the largest which include robotics, "green" energy, and computer chips. China is the largest producer of wind turbines, solar panels, and has the largest market for growth in robotics. 

 

Again, China may be the largest wind turbine and solar panel producer in the world, but it's also the world's largest total energy producer. About half of all the world's coal consumption is in China. Coal-burning still accounts for about three-quarters of its energy consumption. And many new coal-firing plants are still being constructed. 

 

 

Also I find it interesting that you talk about Sub-Saharan Africa considering the very gains that Africa is making. Africa will soon be the fastest growing region in the world and in fact many countries in Africa already have the largest rates of growth albeit with most being in parts other than Sub-Saharan Africa. 

 

True. Many African economies are growing very fast, especially those in East Africa (Kenya, Tanzania). I think many of them have bright economic futures. But look at what they're starting with. They also have a loooong way to go. They're still the most impoverished region in the world. So when I say rural Chinese live in conditions comparable to those in Sub-Saharan Africa, I mean they live in conditions among the poorest in the world.



#6
TranscendingGod

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Well the point was never that China is as equitable or as developed as the United States but rather that China would not become a superpower. I think many people would already consider it an economic superpower and I don't think many who do not yet think that think it will never attain that status.

Also China's coal use has already peaked. They have cancelled hundreds of coal plants.

The growth of computation is doubly exponential growth. 


#7
BarkEater93

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Well the point was never that China is as equitable or as developed as the United States but rather that China would not become a superpower. I think many people would already consider it an economic superpower and I don't think many who do not yet think that think it will never attain that status.

 

Oh I'm not done yet, I haven't even scratched the surface. I only mentioned one aspect; one of the obstacles that China faces. I'm going to talk about China's economy and more in other posts.

 

 

Also China's coal use has already peaked. They have cancelled hundreds of coal plants. 

 

Maybe. Coal demand may have peaked but plants are still being built at a rapid rate: https://www.theguard...say-campaigners

 

It's hard to know from so many conflicting reports on how much coal they really burn: http://www.cnbc.com/...mate-talks.html

 

China is a master of disguise, they've done it with their poverty, their energy consumption, and so many other things that I'm going to mention.



#8
BarkEater93

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So these are going to be much lengthier posts than I thought, there’s a lot to explain so I’m going to break them up. 
 
Military
 
So we all know China has the largest standing army in the world. It’s not surprising given that it’s a country of 1.4 billion people. The military has also been amassing tons of equipment in recent years. But just like any other Chinese figures, we have to look beyond that, and ask some crucial questions: How much experience do the Chinese have with this equipment, or of being on the battlefield? When’s the last time China has engaged in a conflict in a significant capacity? Is their army well organized? Are there any places nearby that the military can use to easily expand and project power?
 
I’ll start by answering the last question, since geography is very important in a military’s focus. Geographically, China is an isolated country. There are barriers or obstacles in many directions that help prevent it from being invaded, but it also makes it difficult to project its military power beyond its immediate vicinity.
Due south there is deep jungle, to the southwest the Himalayas and Pamirs, to the west the remote Kazak steppes, to the north the Gobi Desert and to the northeast the vast Siberian wilderness. Sure, these aren’t total barriers if you could just fly over them, but imagine the logistical nightmare it would be if China and India went to war and they had to fly all their equipment and personnel over the Himalayas. It just wouldn’t be worth the risk. The logical place then that the Chinese military could easily expand would be through the sea, from along the Pacific Coast. So you’d think, given that the sea is so important to them (and I haven’t even touched upon how important it is for them to secure their sea trade routes), that they would have a strong navy. Lets see…
 
Historically naval power equaled total power, and that remains true today. Most of the great powers in history had strong navies: the Ancient Romans, the Ottomans, Ancient China (especially during the Ming and Qing Dynasties), the Empire of Japan, the French, the British… you name it. Having a strong navy is pretty much a prerequisite for being a superpower. Today the world’s superpower, the United States, has by far the world’s strongest navy. Not only does it have the volume and the equipment (the total combined deck space of its aircraft carriers are more than twice of the rest of the world combined), it has the experience (continuously and in major combat since the early nineteenth century). So CHINA NEEDS TO HAVE A STRONG NAVY IF IT WANTS TO EXPAND ITS MILITARY POWER IN A MEANINGFUL WAY.
 
The U.S. has a strong presence in the Eastern Pacific. If China wanted to secure its hold in the sea it would face several other nearby, hostile powers. Japan has one of the world’s largest and most experienced navies. Taiwan, being an island country, has a substantial navy. The Philippines is an island nation with its own navy, and although China-Filipino relations have warmed in recent months, Duterte is just playing with China, as well as the U.S. He is bouncing between both and trying to profit from the tensions that the Philippines is in the middle of, the tension that is in the South China Sea; as evidenced by what Duterte ordered today ahead of the Trump/Xi talks.
 
So China faces many nearby hostile powers with their own substantial navies. Does China’s measure up? 
 
To be continued… 


#9
Zeitgeist123

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Despite all the hype, I really do not think that China will become a superpower like the US. My view on this has been consistent within all these years. They will become an economic power thats for sure.


“Philosophy is a pretty toy if one indulges in it with moderation at the right time of life. But if one pursues it further than one should, it is absolute ruin." - Callicles to Socrates


#10
tornado64

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China's middle class is now larger than the United States. http://www.telegraph...-the-world.html

 

See, that's one of the big problems with these statistical figures; the article says 109 million people are now in the middle class, and it's the biggest in the world, but so is China's total population. What about all those other 1.2 BILLION people? This would be impressive if these 109 million people were in their own country, but they're not. They can't just pretend that all of these other 1.2 billion people (or even half that), don't exist. 

 

To the question whether China will become a superpower or about its economic capabilities these other people outside the manufacturing bases and coastal provinces in fact don't matter that much.

The coastal provinces alone would make a respectable economic power.

About the navy: China might have the second strongest navy after the US by 2030 or so.



#11
BarkEater93

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 these other people outside the manufacturing bases and coastal provinces in fact don't matter that much.

 

  :fie: you're saying 1.2 BILLION people (!) don't matter that much, the vast majority of China's population? That's a dangerous attitude to take. An attitude like this, which the Chinese government has taken, is what breeds social unrest, causing a country to destabilize. 

 

 

About the navy: China might have the second strongest navy after the US by 2030 or so.

 

We'll see about that. What's important is how the Chinese navy is RIGHT NOW, especially since it's now being tested. And right now, as I'm going to explain, it's very weak.

 

And look at the hurdles it faces and the competition it has. Research about the American navy presence in the East Pacific. It's huge. The USN in general is immense, very experienced and very powerful. Most Americans (and lots of non-Americans) take it for granted. The Americans could form a blockade around China and cut of its sea trade routes if it thought it needed to.



#12
caltrek

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...or it could simply continue trading with China...


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#13
BarkEater93

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...or it could simply continue trading with China...

 Sure, if they maintained  (at least somewhat) peaceful relations, but if not...

 

The U.S. has been weaning off of Chinese exports, and is now less dependent on them than ever. China, well, they need access to sea trade routes, it's a national priority.

 

In the event of war the U.S. could cut off trade with China. It would suffer damage but it wouldn't be an existential risk. China, however, needs the U.S. to maintain open passage in the East Pacific. A blockage would be a huge existential risk for China. That's one of the reasons why I think China would never go to war against the U.S.



#14
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China, however, needs the U.S. to maintain open passage in the East Pacific. 

 

Sorry, meant to say West Pacific... I think I'll just say Asian Pacific from now on ;)



#15
BarkEater93

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     The current Peoples Liberation Army Navy (PLAN) was formed in 1950, soon after the Communists took power and the PRC was formed. Throughout the 50’s and 60’s the Soviets provided the Chinese navy with advisors, equipment, technology, and logistical support. So although the navy had grown modestly, the Chinese were dependent on the Soviets for support. 
 
    After the Sino-Soviet split, China was forced to provide for their navy on their own. It didn’t go so well in the decade or so after the split. The navy remained small and was mainly a brown-water force (restricted to fluvial environments).
 
     With the implementation of economic reforms in 1979, not only the navy but China’s military as a whole took a backseat to make resources for economic development. It wasn’t until the 1990’s that the PLAN finally turned their focus to the seas. However, after decades of being in stagnation to make way for the economy, and the decades before that when it was heavily reliant on the Soviets, it didn’t have much to start with. 
 
     Although the PLAN has since been rapidly growing (with over 255,000 personnel it’s now the second largest in the world), it’s still a novice, highly inexperienced force surrounded by highly experienced ones. Nearby Japan has had continuous experience with the seas for centuries. So has the United States, which maintains a strong presence in the Asian Pacific. In contrast, China has only been a green-water navy (one that operates in the ocean but only within the vicinity of the country’s coast) since 2009, and is very far from being a blue-water navy (one that operates across an entire ocean). The U.S. has not only been a blue-water navy, but THE global blue-water navy, for many decades. China has had aspirations to become a blue-water navy for a long time, but it has a very long and difficult way to get there.
 
     Ancient China once had a very strong ocean navy (not just in terms of quantity but also in quality, which is most important). That changed with the collapse of the Qing Dynasty in 1912. There have been many generations between then and the current spurt back to the ocean.
 
     Ultimately, what’s more important than the size of a navy is its quality, its experience and its geographical position. And especially with China, which I make reference to often, size doesn’t mean a whole lot. China still acquires most of its naval equipment (or at the very least their parts) from other countries, and thus has very little experience making their own. China’s first aircraft carrier (which has only been in use since the last few months) originally came from the Soviets. And of course, still being reliant on other countries for naval parts and expertise is not good, because those countries could easily refuse to provide further assistance. 


#16
BarkEater93

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     I should also mention that having one aircraft carrier doesn’t mean much if you don’t have an admiral with the experience to handle a battle carrier group, along with the experience of landing planes on the deck and the coordination that goes with it, which the PLAN has yet to achieve. In contrast, the U.S. has had experience with battle carrier groups since the Second World War.
 
      Now, the People’s Liberation Army (PLA). 
    The PLA, throughout its history, has operated more as an internal security force than a conventional army like the U.S. China’s geography and the physical barriers that surround the country make it hard for the army to invade and project power. Culturally, China has traditionally been an isolationist country as well; the turmoil and regionalism that the country faced in its history from foreign European influence helped shape that. China never gets itself involved in far-away conflicts; the only inter-state conflicts that it has gone into are ones with its neighbours (Korea, Taiwan, Vietnam).
 
     The last conflict that China has fought in beyond its border was the Sino-Vietnamese War in 1979. That war was brief (it only last three weeks), and was hardly a test of the PLA’s abilities. The last war that China got itself in with significant capacity was in Vietnam, almost fifty years ago. So there has been a generational gap in the PLA’s experience with inter-state warfare.
 
     The last time the PLA was deployed, regardless of circumstance, in any significant way, was during the Tiananmen Square protests in 1989. So in recent times, the PLA has had very little experience in combat in any way. 


#17
BarkEater93

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Economy
 
     China’s economy is often what is hailed the most by those who think the country will become a superpower. It’s the world’s second largest and it has had impressive growth rates for most of the last 30 years. Being the second-largest economy doesn’t necessarily make it strong or healthy though. The fact is, having this monumental growth is not sustainable; it can’t continue indefinitely. Chinese society has been shaped by this economic growth spurt so much that even a small decrease in GDP growth could have huge consequences.
 
     Most other countries in East Asia have had similar economic evolutions; they were high growth, low wage countries that maintained impressive growth rates for a while, and then when the economies could no longer sustain themselves, these countries’ economies shifted to become more mature and stable, but that also meant stagnation, to say the least. Japan went through this in the late 80’s; the Four Asian Tigers in the late 90’s. China is beginning to go through this now. The problem is that unlike Japan or South Korea or Taiwan, China is still a developing country with over a billion people still living in Third World poverty and extreme inequality. China’s economic transition therefore will not be smooth, if it can even make it (which I don’t think it will) and is more than likely to destabilize the country. 
 
     To use as a comparison, let’s see what Japan was like in the 1970’s and 1980’s. Japan’s economy was booming. Most Westerners thought that Japan would emerge as a potential great power and competitor of the United States. Japanese cars shipped abroad were damaging American car companies. Japan had built lots of new infrastructure and modernized its cities. Japan’s economy quickly grew to become the world’s third largest, after the U.S. and the Soviet Union. Americans were sure Japan would dominate in the future. Look at the film Blade Runner (1982), it depicted a Los Angeles in 2019 dominated by Japanese culture and language, and now we know how far off that was. Once Japan’s asset bubble burst, it took a while for the outside world to really notice. Several years after the bubble burst, news articles and even economists were still talking about the Japanese miracle. It took a while for reality to sink in. A similar situation is happening right now in China (especially since the Chinese have been very deceitful with their economic data).
 
Blade_Runner_spinner_flyby.png
   
     Consider this: Many a Chinese in, say Guangdong (or any other coastal region), have more connections with Wal-Mart or other American companies than they do with the people in the interior or even with the policies coming out of Beijing. Foreign influence is heavy around the Chinese coast. Drive around Shenzhen and you see a Wal-Mart there, a McDonalds here, bilingual Mandarin and English signs… Meanwhile, rural areas and much of the interior, instead of doing business with the Americans or other foreigners, are tied down with internal affairs. It’s another aspect of the great urban-rural and coastal-interior divides.
 
114645qvb19ww0svq87qu7.jpg
 
     See where I’m going here? Yes, history is repeating itself, as it so often does. What led to the collapse of the Qing Dynasty? Foreign actors, the Europeans, had a huge economic influence in China, particularly along the coast. Coastal people clung to and were dependent on European markets, but they also got rich (not to mention addicted to Opium). Meanwhile, the interior people got disconnected and remained impoverished. This made the economy fragile, it caused rebellion, and eventually the Manchus were overthrown. The Republic of China was formed to try and consolidate power. It didn’t work: China would go through an era of regionalism conquered by warlords and a bloody civil war before the communist regime was placed and China was reunified. Of course the circumstances this time are different; I don’t think China will collapse or go through another major civil war, but the processes are similar, and the result; I think, will be China returning to a period of regionalism and turmoil.
 
     What has Xi been doing lately? Why has he been making so many purges and suppressing the Chinese Communist Party? Is he becoming a dictator? That’ll be next… 


#18
tornado64

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 these other people outside the manufacturing bases and coastal provinces in fact don't matter that much.

 

  :fie: you're saying 1.2 BILLION people (!) don't matter that much, the vast majority of China's population? That's a dangerous attitude to take. An attitude like this, which the Chinese government has taken, is what breeds social unrest, causing a country to destabilize. 

 

 

About the navy: China might have the second strongest navy after the US by 2030 or so.

 

We'll see about that. What's important is how the Chinese navy is RIGHT NOW, especially since it's now being tested. And right now, as I'm going to explain, it's very weak.

 

And look at the hurdles it faces and the competition it has. Research about the American navy presence in the East Pacific. It's huge. The USN in general is immense, very experienced and very powerful. Most Americans (and lots of non-Americans) take it for granted. The Americans could form a blockade around China and cut of its sea trade routes if it thought it needed to.

 

 

I didn't talk about anything near 1.2 Billion, because about 94% of the population live in the East part of China. 

The provinces completely below the Heihe-Tengchong line alone would still be one of the largest economies in the world and absolutely dominate many markets like e.g. electronics. If Guangdong Province (where I live) was a country it would have the 15th largest economy in the world.

I definitely agree there is a huge divide in income between rural and city population, I'm certainly biased, because even though I travelled to most of the provinces in China I spent most of my time in Guangzhou, Beijing and Shenzhen, which are all booming Tier 1 cities and it's breathtaking to see the speed at which everything is developing here.



#19
TranscendingGod

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 "China is still a developing country with over a billion people still living in Third World poverty and extreme inequality."

 

This is the thing i partially disagree with (more than the other things anyways). Mainly the claim that over a billion people are still living in "Third World poverty and extreme inequality." as China is certainly a developing country but it has made enough progress where only the areas worst off could even possibly be considered "Third World" and even then scantily so. China is almost on a per capita basis equivalent to a country like Mexico which is nothing like your description. Simply ask anyone who's ever been to the country. These countries are developing but their situation is not nearly as bad as you describe it as attested to by the above resident of China. 

 

Certainly the claim that over a billion people are still living in those conditions requires overwhelming evidence. After all that would be literally the majority of people. Do you think that such a country would be the second richest economy in the world with only 300 million people actually being wealthy enough to consider them something other than residing in "Third World poverty"? Such a claim would require those 300 million to have an equivalent consumption to Americans and to have a per capita income equivalent to the United States. An absurdity to be sure. 

 

Such a claim would be an absurdity even when speaking of such a country as India which is about where China was a dozen years ago. I think that your picture of China is one of China in the 90's and not the China of 2017. 


The growth of computation is doubly exponential growth. 


#20
BarkEater93

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I didn't talk about anything near 1.2 Billion, because about 94% of the population live in the East part of China. 

The provinces completely below the Heihe-Tengchong line alone would still be one of the largest economies in the world and absolutely dominate many markets like e.g. electronics. If Guangdong Province (where I live) was a country it would have the 15th largest economy in the world.
I definitely agree there is a huge divide in income between rural and city population, I'm certainly biased, because even though I travelled to most of the provinces in China I spent most of my time in Guangzhou, Beijing and Shenzhen, which are all booming Tier 1 cities and it's breathtaking to see the speed at which everything is developing here.

 

You're right, most Chinese live below the Heihe-Tengchong line. And???.... 

 

It's way too simplified to support your argument. It still includes the vast majority of China's poverty, including poor provinces like Jiangxi. Please refer back to the map in post #2 to get a more detailed picture. Maybe you can find an even better map. When I said coastal provinces, I meant Guangdong, Fujian, Zhejiang, Shanghai, Jiangsu, Shandong, Tianjin, Beijing, Liaoning, and Inner Mongolia. The majority of China's wealth, yet only 28% of the population. And within those provinces there's a huge gap between rich and poor.

 

Your're right, alone Guangdong would have a large economy by international standards. And so???....

 

It doesn't say much if we're talking about poverty. India is the world's seventh largest economy, Canada the tenth... doesn't say anything about each country's poverty. If its the economy you want to talk about, then lets talk about that.

 

Guangdong is still a part of China, it's not its own country. In my last post I said that I think China will return to a period of regionalism; politically, socially... What you said supports that. 

 

I'm keen to know more about where you live in Guangdong, I think Shenzhen would be a really cool city to visit.







Also tagged with one or more of these keywords: China, Chinese economy, Chinese military, poverty, income inequality, superpower, South China Sea, East Asia, developed country

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