China continues to experience outstanding economic growth because of the socialistic market economy that it adopted (Cohen 2009). However, it is about time the world had a conversation about this new economic trend set by China. This paper shows how China’s progress is bad for the rest of the world.
Firstly, it endangers natural resources. The efforts by China to maintain the growth rates of GDP of approximately 10% per year registered in the past years could adversely affect the natural resources of the planet. China has a robust economy that demands more resources to maintain the new normal concerning its economic growth. It is quite evident that the world already consumes more natural resources than the earth can produce; this will worsen further with China’s economic growth. For example, the construction of Three Gorges Dam to cover for the demand for power in China faces criticism for creating environmental and social problems (Bartelmus 2009). The implication of further economic aggression could deplete or unsustainably reduce natural resources. According to free-market theory, the effect would disrupt the mechanism of demand and supply (Bonefeld 2010). The demand for limited natural resources would push commodity prices much higher while continuing to deplete natural resources. The consumers would be deprived of the liberty to participate in the market as they so choose. To a great extent, China’s economic progress is harmful to the world.
Secondly, there is a risk of market failure as a result of the invasion of low-cost Chinese products. China’s act of using its economic power to dump its goods in the global market is contrary to the ideals of free-market theory. These goods are stifling competition because they are cheap. A study by Kabadayi and Lerman (2011) shows that most of the products used in the world come from China; this is as a result of low labor costs and cheap supply materials in China. Low production costs and cheap labor is causing many companies across the world to move to China to get by the global competition. This movement would further lead to deindustrialization across the globe. Other economic problems such as unemployment would find ways into the world, thus leading to unsustainable social and political stability in most countries. Besides, because China is a significant contributor to the global economy, any slowdown in its economy would adversely affect the many closely related markets in the world (Yongding 2010). Countries exporting to the big and diverse markets in China are poised to suffer every time the buying power is low. In other words, the line of China’s economic progress will disrupt the world economy as it is designed to only work for Chinese goods and services.
In conclusion, China’s economic progress has several flaws that could be too damaging for the global economy. The world should come up with ethical standards to sustain a healthy global economy where there exists no designed dominance. Above all, the global market should be leveled to maintain a free market.
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