Several centuries before, Napoleon once had said: “China is a sleeping giant. When she awakes, she will shake the world.” Since 1978, the former Chinese leader Deng Xiao Ping launched a market reform (reform and opening up), had contributed to the rapid economic growth and social development in China. China then opened up it market to the world. Due to its favorable manufacturing conditions, successfully attracting foreign investment and now become the world largest export country. As a world factory, China’s economy is interconnected with every continent, all around the world. It is now the second largest economy and is playing an influential and vital role in global economy(, 2014). It is believed to pull ahead the US in 2019(Giles, 2014).The rapid economic growth not only increases China’s influence in the world, but also intensifies the internal problem of the rising giant, which may pose a challenge to its global position and hinder its internal strength.

The polarization of the rural and urban brings China into a contradictory condition. While the East of the country is in prosperity, the west of the country is in poverty. For example, the cosmopolitan cities are mostly positioned in the east, like Shanghai and Beijing, are the business center and technological-advanced cities. But the west is agricultural-based and underdeveloped where poverty is a common phenomenon(Rural Poverty Portal, 2014). The urban-rural divide drives China into polarization in the society and contributes to uneven distribution of wealth in the country.According to the International Fund for Agriculture, the urban income is more than three times than rural income. The widening gap between rural and urban causes income inequality.


The problem of income inequality is getting worse in the last three decades. According to a research “Income inequality in Today’s China”, the growing income inequality can be partly attributed to the development policy by the government. Development in China tended to favor the coastal region (urban) rather than the inland (rural)(Journalist’s resource, 2014), making the east more develop than the west. China’s Gini coefficient stood at 0.474 in 2012, which revealed the severe income inequality in the country(Journalist’s resource, 2014). The economic disparity between urban and rural is among the largest in the world (China Profile, 2014). The income inequality and social polarization led to social discontent and contradiction between Chinese people. While the rich are living in modernized cities, the poor are still living in the undeveloped rural.

Moreover, China is under the risk of the property bubble. Property construction keeps increasing in the country even there is excess supply. There are so many unsold properties that make “ghost towns” in some cities. It is believed that China government keeps funding the property construction for the sake of maintaining the high GDP growth(Tamny, 2013).

China property 3

No doubt that the burst of the property bubble in China would have global significance as China is now the world’s second largest economy(Tepper, 2014). Though the speed and the scale have been slow down, it is still the major risk of the government.The imbalance growth and urbanization, and the property bubble caused by blindly pursuit of GDP, may sway its economic position in the world.The Chinese government should put afford to sustainable and balanced development in the country in order to tackle its internal problem and safeguard its position in the world.

By: Hilary Chan


Giles, C. (2014). China poised to pass US as world’s leading economic power this year – [online] Financial Times. Available at: [Accessed 20Nov. 2014].

Journalist’s resource, (2014).Income Inequality in China and the urban-rural divide. [online] Available at: [Accessed 20Nov. 2014].

Rural Poverty Portal, (2014).Rural Poverty Portal. [online] Available at: [Accessed 19Nov. 2014].

Tamny, J. (2013). China’s ‘Ghost Cities’ Have Nothing On The ‘Ghost Country’ That Is The U.S.. [online] Forbes. Available at: [Accessed 18 Nov. 2014].

Tepper, T. (2014).Why a Chinese Housing Collapse Wouldn’t Be That Terrible. [online] Available at: [Accessed 18 Nov. 2014]., (2014).China Overview. [online] Available at: [Accessed 19Nov. 2014].


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