Reaction Paper China

China is said to be “the rising power” these days and that it will become the world’s center of power just like the United States used to be before 2007. It’s the world’s most populous country with a population of roughly 1.3 billion and the biggest middle income class. According to the National Bureau of Statistics, china has the second largest nominal GDP and as of 2012. China is the largest holder of US public debt. For the last couple years though, China has been investing in raising its GDP for various reasons. Will the spending of 1 to 1.39 trillion Dollars worthwhile the investment?
China’s middle class is rising and growing at a very fast pace, not specialized in creating a wealthy class but creating on the other hand, what’s called urbanization. The infrastructure to accommodate China’s huge population is certainly adequate but the problem relies in the population density though. China has one of the lowest population densities. This country needs also to resolve the problem of uneven growth, with geographic regions growing faster than others.
In a sense, if the giant public project is put in place to reach out to the problems that China is facing, it will enable the economy to grow more, to create a strong workforce and a big industrialized country. It will also fix the healthcare and education systems. This will also fix the weak value of China’s currency. On the other hand, such a big investment could cause some trouble to china’s economy if this is not managed and controlled the right way. The imbalances that China has been having are not only due to the value of its currency, or the rise of its middle income class that is growing so fast. Currently China is exporting more than it consumes today, and exports are expected to slow down in the upcoming years. Political issues that are rising up also can make it hard to determine the way the investment made will affect the economy.

To conclude, I guess that the investment to grow such a big country