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China: Post-Olympic Economic Future Challenging

By: CaraTan Date: 19 September 2008

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Beijing, 19 Sep. Olympic excitement has worn off, and now the country is back to reality. Despite having organized the biggest, costliest, and most-publicized Olympic Games ever, with nary a hiccup, economic worries are setting in.

The first omen was in mid-September when an illegal dump for mining waste collapsed, killing 259 people. The accident, which has hundreds of people missing, happened in the Xiangfen county of Shanxi province. The waste was made up of liquid iron-ore, which flooded the village and a market.

Then, at least 6,244 infants became sick from melamine in baby milk formula, and at least three have died. According to a report by The Independent, when the first baby died in May, the matter was kept quiet so as not to upset the upcoming Olympics. But now, the situation is making headlines intentionally, and Chinese are losing faith in their government.

The Chinese government has an “inspection-free” status which trusted brands receive due to their supposedly-superior quality. Now that so-called status has been removed. Online postings and sign-offs of disgruntled Chinese have read, "We work hard for six months, then suddenly we return to the pre-Olympic era” and, "Foreign milk costs money, domestic milk costs lives".

The population’s anger over domestic products and the lack of faith in China-made items doesn’t help the nation’s emergence into the global economy. It is already being stifled, says Nobel Prize winner Joseph Stiglitz, through US and EU double-standards and protectionist policies of giving large farming subsidies to domestic producers. This brings the price of cotton so low that China has to buy from the US. (Additionally, it puts tens of millions of African and Indian farmers out of work).

The US places import restrictions on products they do not produce, like textiles, which hurts those producers like China. Of course they US can always say they have free and fair trade by citing the lack of restrictions placed on imports of things like high-tech products, which the US has an advantage in producing. Where does this leave China?

Unemployment and inflation are other worries. An uneasy government is on the watch for protests after the Chinese market dropped to a 22-month low just days ago.

Despite protests about Tibet’s status, China’s unsatisfactory human rights record, treatment of minorities, and lack of freedoms of expression and assembly, China just wants to be accepted on a global stage, and respected for the formidable nation that it is. It has succeeded to some degree with the Olympics, but still has a long ways to go. “…the international political troubles our nation faces exceeds our ability to respond,” said Yan Xuetong, from Tsinghua University’s Institute of International Studies in Beijing.

China has a long way to go. Its economy is still smaller than California’s, although is nowhere near its potential. Politically, its communist structure and policies do not synch well with the nations China seeks to compete and cooperate with. Moreover, the west is doing little to allow China the free and fair trade it preaches.

Chen Xiulian, EconomyWatch.com