China, as a crucial country in the world, is suffering from a variety of costs of economic growth while the economic growth is incredibly fast in recent years.

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FOUNDATION ECONOMICS ASSIGNMENT III 2004-2005

GROUP  G

VICTOR

           

                       .I.

China, as a crucial country in the world, is suffering from a variety of costs of economic growth while the economic growth is incredibly fast in recent years. A division between rich and poor, unemployment, and various external costs, unbalance of payments, unstable exchange rate consumption of non-renewable resources and the risk of inflation and banking collapse have been the common social problems in China.

There is a huge gap between the rich and poor people in China. “The top 5 and 10% of earners in China accounted for 19.8% and 31.9% of the country’s revenue” (by Richard Spencer in “The Daily Telegraph” published in February 27th 2004). Some people enjoy high quality of living in rich metropolitans such as Shanghai. In contrast, in the poor rural areas, people seek a job in the big cities, so they cannot take care of their children; the children cannot even have an opportunity to receive education, and some of them have been suffering from starvation and diseases. As a consequence, the poor are left behind, which means rich people become richer as poor people remain poor.

A lot of people now have a risk of unemployment in China, because more and more hi-tech equipment is being used to replace the human-labour, in addition, Chinese population is much more than existing working vacancies there are not enough existing working vacancies to cope with the ever rising Chinese population. For instance, since recent years, a lot of Chinese local firms have imported technology and equipment from overseas to product efficiently and grow faster. However, new facilities mean less demand of labours, which could also mean that plenty of workers will lose their jobs as their skills are outdated. The job vacancies are so limited in comparison with the huge Chinese population. In every year, there are millions of graduates that cannot find suitable jobs. As a result, it could cause various social problems such as violence and depression leading to suicides.

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External costs of economic growth have reflected in many aspects. Under the Three Gorges Projects, more than a million people who live in Yangtze Delta lost their homes; plenty of forests were damaged to build a river dam. Even though this project can bring many benefits for Chinese economic development, nevertheless, it has created enormous environmental disaster. In addition, the low social security and working conditions have caused a bad result. For example, the number of the miners who suffer from black lung disease has been increasing by 10,000 in recent years. Furthermore, the Chinese government has to increase the expenditure ...

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