Politics of the Developing World

A Critical View of China in the Developing World

Politics of the Developing World

Photo by Toby Yang on Unsplash

The World Trade Organization lists hundreds of developing countries and underdeveloped countries with many positioned to become larger players in world affairs and politics. In the last three decades the country of most significance on the list of developing countries is China. The growth of Chinese economics and political strength are the two factors with the most impact on the politics of the developing world.

Beijing initiated economic programs in 1979 which pulled more people from the grip of poverty than all aid programs in the world (Voigt, 2010). To understand the rapid development of the Chinese one merely needs to view the statistics.

In 1981, about 85 percent of Chinese were living on less that $1 a day; by 2005, only 15.9 percent of the population was living in extreme poverty. During that time 600 million people — or 10 percent of the population of the planet — escaped poverty in China. This year, [2010] China eclipses Japan as the world’s second largest economy.

The economic disparity between the United States, European Union and the developing world has been closing at a faster rate than in the years before 1990. Largely this is due to globalization via the internet, outsourcing, and free trade. In China’s case the country capitalized on manufacturing and allowing American businesses to operate facilities within its borders. While this form of American outsourcing has increased jobs in China and increased the profitability of these corporations the model for this type of economic strategy is questionable.

In order for China to make the cost of setup and maintain profitability for the companies entering China, the Chinese government had to pin its economy to the American dollar. By virtue to this act the Chinese purposely undervalue their currency in order to maintain the low wages and job growth. Superficially this tactic seems to have worked in that it has raised the standard of living in China and created a middle class (Voigt, 2010). This strategy has not been adopted in most of the countries considered developing because there is a flaw in the concept which cannot be overlooked. Essentially, by pegging the Chinese dollar to the American dollar the Chinese have created a market that is unsustainable in the long-term because it does not allow for individual growth and prosperity among the masses of citizens. By maintaining a low Yen value the Chinese are not allowing for market factors such as competition and market freedom to increase. The result has been an increase in jobs but only a small increase in quality of life for some Chinese.

In contrast to the Chinese approach, India has increased its quality of life as well as increased jobs for its people. By not pinning its money to any country and maintaining a free market, India has greatly increased the strength of its economy. The same outsourcing in India that takes place in China has significantly more impact on the workers lives and on the economy in general. This shows a strong difference in economic policy and in government involvement.

Part of the changes in the developing world has been the acceptance of free market initiatives (Voigt, 2010). This means lowering or removing trade barriers and creating means for easier trade and currency exchange. In part with these changes are also due to the adoption of certain ideas such as ethical supply chain management and diversity training. The adoption of ethical supply chain management means that workers in developing countries are not taken advantage of by being forced to work for wages that cannot maintain their cost of living. For example, Starbucks is dedicated to maintaining ethical supply relations with coffee farmers in developing countries. This is often at the expense of customers in the developed nations such as the United States and EU.

Although China is the second largest economy in the world it is still considered a developing country. This in part because of China’s refusal to allow a free market initiative. This would mean releasing the Yen from the dollar and this would create a market where competition could grow. By maintaining such as low value on its currency other developing nations cannot compete with China. This creates tensions amongst many of these nations as other developing countries see China as a threat.

Currently member nations of the WTO that are listed as developing countries have placed tremendous pressure against China to free its market (WTO, 2011).. This pressure has remained largely ignored until the current financial crisis started in 2009. As the markets in the US and in the EU began floundering the Chinese economy seemed to remain strong. However, this is only an illusion created by the constant control of market factors. For instance, the Chinese government forces banks to give loans for public projects, at very low interest rates. This type of control shows a very forceful government involvement in the economy. Essentially, because the government controls every aspect of its economy the market is stifled except for money coming in from foreign companies outsourcing. Economists such as Paul Romer of Stanford University express trepidation when it concerns China’s economy. Romer and other economists believe that China is headed for an economic collapse because of its lack of freemarket and dependency on foreign industry outsourcing. This worry places tension on US and Chinese relations as the American economy has suffered in part due to a lack of jobs. These economists and the WTO worry that China has created not just an unsustainable market for itself but is proliferating the instability to larger countries which have been stable (WTO, 2011).

China draws a great deal of scrutiny from economists, the WTO, but also from environmental groups. The Chinese have been exporting foods and many other items which have on several occasions not met with the standards of safety in the US and the EU. One example is the growing of organic foods and shipping them to the US. Because China controls its flow of information so strongly, there is little transparency in the farming and in the manufacturing processes.

Critics claim China’s fledgling organic industry is plagued by lax standards, inadequate oversight, exploitation of workers, and practices such as using human waste to fertilize fields, which isn’t the kind of “organic” the USDA and most consumers support. One U.S. consultant working there considers meeting U.S. Agriculture Dept. standards a joke, since “U.S. laws do not work in China” (Brady, 2006).

There seems to be a very large difference in standards when dealing with China and this creates a tremendous amount of tension with other developing countries. It is not hard to understand this problem when one realizes that some of the same foods that are processed the same way in India as in China would not be allowed to enter the US. This is because India has a greater degree of transparency in its farming process (Brady, 2006). So by China not playing by the rules it is allowed a greater freedom in the market than other developing countries.

Environmental problems do not cease with food. All developing countries face certain environmental issues such as safe drinking water and food, as well as medical and public health services. Developing countries often give importance to economic growth at the expense of environmental issues. This reality makes addressing these issues very difficult. China has created a great deal of tension by its blatant disregard to environmental concerns. For instance, in China, negative health impacts are growing due to fluorine and arsenic pollution in the air and drinking water. As well, China’s use of aerosols has garnered international attention. In addition, the local ecological damage and impacts on water resources as a result of construction of the Three Gorges Dam on the Changjiang (Yangtze) River have attracted international concerns. This is a growing tension in the international community as China seems to have no regard for international policy (National Institute for Environmental Studies, 2011).

The tensions do not end there, but also increase on a political level. Countries like North and South Korea continue to bicker and tensions rise as these countries cannot seem to communicate and find balance. The one thing that seems to separate countries in the developing world and keep them from cooperating is ideological differences (Teune, 2002). China as a communist country is opposed in values to countries like the US and the EU. It would be naïve to overlook the obvious problems of these differences. Almost anywhere one finds tensions between developing countries it is almost always as a result of either philosophic or religious differences (Teune, 2002). There has yet to be a Middle Eastern Country that has successfully incorporated a democratic system of government. Yet free markets seem to only thrive in democratic countries. China is the one country that may break the rule but this is an unknown quantity since the economic methods employed by the Chinese might fail in the long run.

One must wonder if globalization is truly helping the development of countries or if it is merely creating more tension amongst developing countries. Countries like China, North Korea, and other nondemocratic nations seem to desire to trade and make profit in the Global economy but are unwilling to play by the rules which in many ways are opposed to their ideologies. In the Middle East, several times countries have tried to adopt free market initiatives but these countries are always in violation of the Islamic faith when they attempt to make these changes. In the future, the developing countries might benefit more by taking these factors into account.

References

Kevin Voigt (2010) Business 360Is China a developing country? CNN.com, http://business.blogs.cnn.com/2010/10/12/is-china-a-developing-country/

Diane Brady Why the Stink Over China’s Organic Food? Mainland farms are going natural — if natural means large, government-run farms that don’t meet USDA standards OCTOBER 16, 2006 http://www.businessweek.com/magazine/content/06_42/b4005007.htm

World Trade Organization (2011) Who are the developing countries in the WTO? http://www.wto.org/english/tratop_e/devel_e/d1who_e.htm

National Institute for Environmental Studies (2011) Environmental Issues in Developing Countries Retrieved from http://www.nies.go.jp/gaiyo/panf2002/developing/developing- e.html

Teune, H. (2002). Globalizations and Democratizations: Forces and Counterforces

Political Science Department University of Pennsylvania Retrieved www.polisci.upenn.edu/faculty/bios/Pubs/Teune8.doc

~Citation~

Vincent Triola. Sun, Mar 14, 2021. Politics of the Developing World Retrieved from https://vincenttriola.com/blogs/ten-years-of-academic-writing/politics-of-the-developing-world

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