Political Science

At the beginning of the industrial revolution, the Chinese were economically and politically advanced just like the western economies in urbanization, per capita consumption, markets, institutions, technological dynamism, life experiences and land yields. The painfully evident divergence between the West and China by 1900 got its foundations on the start of industrial revolution (Pomeranz, 2000, p.382). However, since the market reforms that were made in china by the beginning of 1978, the economic growth of China have been increasing at approximately 10 cent per year. In the recent past, the economy of China has been among the fastest growing economies in the world and the country is gaining its old economic as well as political position that existed before the great divergence in the 1900s.  According to international official data, this growth has further accelerated since 2000. Internationally approved measures of the growth of Chinas economy reveal that this growth could be even higher than was officially reported. The analysis contained in this paper brings out the future of China in terms of global political and economic power and success (Keidel 2007, par, 1).

Chinas current political economy
Today, China has the longest constant period of fast expansion since the reforms began. This expansion surge satirically received motivation during SARS pandemic of 2003. Government investment promotions planned to counteract the epidemics effect turned to be pointless and therefore excessive. However good financial control over the cash circulating and additional steps controlled overinvestment in bubble-prone sectors. The officially reported retail price and consumer inflation measured less than two per cent by 2006 (Keidel 2007, par, 9).

Chinas economic growth rate since early 1990s has properly outdone the twentieth century global growth records. This is especially comparable to Japan and the East Asian economies such as South Korea, Singapore, and Taiwan. Chinas size and population makes it hard to compare its current level of development with other historical time periods of other countries. Since 1978, the countrys GDP has experienced very wrenching changes. After increasing prices of farm products significantly in the year1979, China transformed her socialist communes to family unit farming in early 1980s.  It also formed banks and changed government budgetary funding for ventures with loans from banks. Later in the1980s, the country transferred the operational control of its industrial units from the Communist Party secretaries to the factory managers and gave them incentives for making money. By late 1990s a good number of state ventures had been purchased by private interests. At the same time banks had already been changed to operate progressively more as businesses. Government budgets moved from a system of slush fund cubbyholes into a modern tax revenue system (Keidei 2007, par.9), with spending regulation, based on one-treasury account.

The people have moved in drove to urban regions, education brings quality pay in almost all jobs, and the public education via nine grades is universal. Limited-access public roads network across all provinces, and an internet and telecommunications backbone extends to the county towns and further. Chinas integration in the intercontinental community goes beyond what South Korea or even Japan ever reached at this phase of their development. Its embrace of foreign direct investment and World Trade Organization is exceptional and greatly contributes to its current growth success. The International Monetary Fund and the Treasury Department have in many occasions confirmed that china meets global standards in its management of economy and resources (Walgreen 2009, p. 2).

China Ten Years from Today
The current trend on the growth and development of China on international standards is no flash in the pan (Keidel 2007, par. 1). The implications of such a fast, continued growth include the possibility of China changing the global patterns of trade, pricing and production as well as amendments in the global-military- force- balance projection capacities (Keidei 2007, par 2). This implies that China is going to overtake the United States of America in terms of overall GDP sometime before 2040.

However, the economic size of China is not likely to quickly transform into equivalent levels of military prowess due to the slow progress in accumulating global bases and military hardware (Ikenberry 2008, par. 4).

In the next 10 years, the economy of China will still rise at an estimated rate of 7 to 8. In 2020, should the price index stay as it is today, Chinas GDP will total 38 trillion per capita. GDP is most likely to reach 26,000 (Yuan). However, per capita GDP in China is at now very low. Currently, GDP per capitas expansion is at a sluggish rate. GDP per capita must have been increased so as to lift Chinas living standards in order to link the current gap between the rich and the poor. Consumers need satisfaction will be the major drive in lifting living standards of the Chinese citizens. Domestic demand thus will rise as the economy advances. Therefore extensive manufacture of goods and services will push and further sustain the growth of the economy (Lee 2009, par. 2, 3).

Moreover, there exist rich human resources in China. Labor cost is much lower in China as compared to other developed countries. The education system in China is still being developed fast and more citizens will attain higher standards of education unlike in the past. With proportional benefit in labor cost and raise of human resources brought about through education, future of Chinas economy will be even brighter. The labor force in China is expected to grow even better as the country is urbanizing fast, changing from a rural-agricultural society to an urbanized, industrialized society. In the course of the transition, additional manpower will be utilized. Urban communications will be enhanced and increase in metropolitan population will come along with higher level of consumption, thus developing the economy even further (Lee 2009, par. 4-6). The existence of a large market, joined with increase in the consumption power of the people, will thus create larger prospects for approximately all industries. Market will be more competent and the industries will become even faster. Demand for goods and services in the local markets will increase, creating improved opportunities for investment and production (Lee 2009, par. 8)

Why China will continue to develop rapidly than other countries
One reason why China will effectively outshine other competing countries economically is due to the effectiveness of its two-pronged financial system. The initial prong is an efficiently run and directed credit system. This channels funds from the banks and the postal deposits to a strategy set for public uses. The next prong is an income oriented, competitive system, although it is still in its early and ineffective phases of development. Equally, these prongs continue undergoing quick government sponsored restructuring to ensure they are always and more effective (Nichols 2009 par.4). China will turn out to be the worlds largest and safest economy in decades to come particularly due to the following factors rich labor resources, huge market potential, sound corporate governance, stable government and society as well as relative advantage in labor cost. All of the factors will continually attract an inflow of overseas capital to China. Simply, Chinas wealth in economic and political power will develop even quicker in the near future (Lee 2009, par. 1)

How solid is Chinas economy
There is enough evidence from the estimates and views from the World Bank that are a solid proof of the viability in the economic growth of china. According to World Bank, China has been involved in many rigorous and genuine efforts to raise its economic standards which are now rewarding well. For example there is the Three Step Development Strategy that was adopted by the country, which clearly states Chinas economic construction goals and objectives. By now, China has already achieved two of the objectives and the last objective (which is to increase per capita GNP to the standards of medium level developed nations) is yet to be realized by 2050. In addition, The Central Intelligence Agency, issued some reports recently comparing Chinas emergence and influence on  worlds economy  with the impact the U.S. had during the past century as well as  Germany during  the 19th century. The report said that by the year 2020 the geopolitical center of gravity in the world most likely will tilt towards Asia (especially China). China is expected-according to, The Central Intelligence Agency- to have suppressed Japan and become second from the US (Lee 2009, par. 3)

China not a real threat to the US
In as much as the subject of China and its economic sovereignty has brought many views from scholars on the likelihood of the country overtaking the US, this is not likely to happen because, the two countries are operating on different grounds. What these scholars dont see is how the two countries relate in terms of population, economics philosophy, geography and the military. The key goal of China is economic development whereas the USs goals are multifaceted to include the economy, the military and the well being of Americans. USA is the super power of the world and has the principal economy in the entire world but for the last ten years, China has been improving economically while the US is engaged in war against terrorism. This shows the whole different between the two approaches. China is concentrating on further improving the economy while the US has several issues to attend to which have been dividing its attention on the economy (Gupta 2009, par.4)

Challenges facing China
The major political and economic challenges that face China are directly connected to its booming growth that has left many of the developed countries questioning the transparency and possibility of the achievement by China. This is because it has taken many countries decades to achieve half of the growth that China has attained in a few years. In spite of Chinas booming economic rise and the scores of strong local and global supports for sustained fast expansion for decades, numerous limitations and challenge face nations policymakers to date (Keidel 2007, par, 9).

Among the most serious challenges is the central governments convolution in penalizing local government conduct. The primary priority of the locals has been in promoting themselves and advancing their careers through vigorously advocating for higher investment charges and increased output levels. Contrary, the central officials are concerned with too much investment, unsold stocks, and confined policies, risking national inflation on the prices. Local conduct is hard to control since Chinas local affairs are basically commercial in nature but not federal. The central administration accomplishes its objectives at local level through operating with local government bureaus- not along with them. Thus, central officials have to often function through the local offices that they are expected to investigate (Hamashita  Takeshi 2008, 16-18)Many Chinese corporations have had grand success with two categories of globalization. The initial is winning global markets through exports in China. The next is possession of natural reserves assets in Australia, Latin America and Africa. However, these globalization assets will be reaching their natural confines, and none is principally demanding in terms of cross-border managerial ability. Exports will by no means be as significant for Chinas expansion as before. China is by now the worlds number one exporter. If Chinas exports were to maintain growth as in the last ten years, they could shoot up from ten per cent of the total world exports to approximately fifty per cent by 2020. This is a political and economic impossibility. Likewise, political control problems in other nations will soon start to put key restrictions on Chinas capacity to obtain natural resources (Gupta 2009, par.4). The primary challenge concerns financial expertise which is critical in ensuring that cross-border acquisitions are properly assessed and examined for its financial and strategic qualities and completed on right terms. Given the plenty of capital within China and recognized propensity on Chinas national enterprises to place national regulation goals prior to shareholder worth maximization, Chinese business leaders are at a relatively premature phase in increasing world funding skills. Sound fiscal analysis cannot be contracted out to the investment bankers since investment bankers make their charges by causing deals to happen.

Another challenge facing China involves the skills required to generate and run horizontal associations in which, major resources are dispensed across borders and controlled by managers alienated from each other by cultural, geographic and language distances. Chinas is a command-and-control economy embedded in a culture that respects hierarchy (Conway 2009, p.10).  Most of the Chinese organizations consider information to be a basis of power resulting in a lower measure of transparency between firms as compared to that of Western corporations. In addition, China is a reasonably homogenous country in terms of religion, race, and language. Notably most the Chinese managers particularly those at superior levels in key companies are at least fluent in Basic English which is the trade language in the world.

While many companies in China are title holders at competing through cost effectiveness, they have not yet mastered the science and art of competing using differentiation. Lenovo is determined to differentiate itself by brand and product design (Ikenberry 2008 par.5). Other outstanding companies like, Haier (appliances), Li Ning (apparel and athletic shoes) and Huawei (telecommunications) are making a similar effort. Nevertheless, for the greater part of Chinese companies, using differentiation as a tool for competition still remains distant (Ikenberry 2008 par.9)
 
Political understanding and barriers to likely acquisitions by these companies in other industrial economies is the other challenge facing China. Major examples comprise roadblocks encountered by CNOOC while attempting to obtain the United States based Unocal. Also Huawei Technologies in its effort to acquire shares in 3Com and Marconi. This challenge stands well and alive, as confirmed lately by the resolution of Rio Tintos panel to decline the offer by Chinalco to increase its capacity in shareholding of the company. The bases of this political oriented sensitivity is in the fact that the majority of big acquirers in China have a tendency of being owned by the state or supported by the state and governments are hesitant to surrender power over strategic assets to any foreign government.

Even though China has gained some extremely refined production facilities during trade and has built several sophisticated engineering plants able to manufacture a growing variety of advanced equipment such as satellites nuclear weapons, the majority of its manufacturing output is still gotten from reasonably ill-equipped factories. The technological rank and worth of its industry are basically fairly low.

Precautions
This implies that the next move in globalization by the Chinese companies must be different. It will call for smart achievement of established corporations in several of the worlds chief economies. It will also require competent management of geologically discrete marketing and manufacturing. It will require division of management decision-making power to superior executives from diverse national ethnicity located miles away. It will also call for ability to combine all the dispersed assets as well as run a consistent global venture. Chinese corporations will require conquering four main challenges to pursue this kind of globalization (Conway 2009, 6).There has also been an escalating level of corruption in China which if not taken heed to will soon drive the prosperous economy to its knees. Chinas authoritarianism has been a ground for breeding corruption in the recent past. In a political regime that is lacking the essential of an effective functioning democracy, the societal groups cannot run to the press to handle their cases or a sovereign judiciary or even opposition parties to address their complaints. Therefore the revolts are what they have left (Thoma 2009, par. 7). The government of China thus needs to address the issue of corruption among its top officials and the managers of the leading industrial corporations so save the country from the giant of corruption that has not spared any super power in the past if left unaddressed (Thoma 2009, par. 7)
 
China is being seen as an upcoming threat for the United States economic and political power. Some economic analysts have confirmed that the American political-economic era is approaching its end and Western initiated order of the world is being replaced by the East. The analysts go ahead noting that as China gains more power and the U.S. position grinds down, two major things are expected to happen China will attempt to utilize its emergent influence to reform the regulations and associations of the global system to serve its interests better, and other nations in that system (particularly the declining hegemon) will begin to view China as a rising threat of security. The consequence of these expansions as they envisage will be distrust, conflict and tension. These are characteristic features of a power changeover. In such a view, the drama in the rise of China will feature a progressively more influential China and further declining United States closed in a blockbuster conflict over the leadership and rules of the global system. This being the expected drama in the future if China continues to outdo the worlds giant economies, it is therefore important that China builds strong and diplomatic relations with the competing economies to avoid the possibly of conflict, mistrust and tension with other nations which might affect both its economic and political prosperity in the near future.

Conclusion
China is currently the fastest growing world economy. The growth of the country is expected to expand further within the next ten years because the limiting factors are already being addressed and those that have not been addressed are too merger to affect the future prosperity of the country.

However, the country needs to carefully look into the issue of governance and corruption which are the greatest enemies to any growing economy. The US political power will still remain since China does not have much to do with the politics of its economy and the current resolve by the US to revert terrorism and terrorists attacks is expected to assist in stabilizing the United States political sovereignty. In addition, the expansion of China will improve its economy as has been predicted, but evidence has shown that the dimension that China is taking will cause a direct threat to the US because the aim of China is not to cause rivalry with the US but to work together with developed nations in improving its economy.