China is facing increasing pressure regarding the South China Sea, North Korea, and its economy

China’s economic growth is slowing down and is projected to keep this trend going after growth slowed to 6.9% last year, its weakest pace in a quarter century. 

On Saturday Premier Li Keqiang promised tax cuts that could leave companies with more money to invest and he also said that China would adopt total social financing, a broad measure of credit that includes both bank loans and nonbank lending, as a metric for helping determine monetary policy.

He set out a new five-year economic plan for China: 

  • More urban migration so that 60% of citizens will be living in cities by 2020
  • Creation of 50 million new jobs by 2020
  • Growth of the transportation sector, 50 new civilian airports and expansion of the high-speed railway network by more than one-third
  • Environmental goals such as cutting energy consumption and improving air quality

China says it needs to post at least 6.5% growth through 2020 to double per capita income over 2010 levels in time for the Communist Party’s 100th anniversary in 2021.

Exports have also been in decline. China’s customs administration reported on March 8 that exports fell 25.4% in dollar terms year-over-year last month,  compared with a drop of 11.2% in January. Imports also declined, falling 13.8% last month, compared with an 18.8% drop in January. Even though some say that the figures were distorted because of the lunar new year holiday, it is still very clear to see that the economy has been declining. 

Over the past twenty years China has been suffering from state-led investment and debt, and concerns about a credit buildup have grown as the economy has slowed. China’s government has also pledged to reform their state-run industries, an action that will lead to 5 to 6 million state workers being laid off.  Despite all these figures, China’s top economic planner claims that China will “absolutely not experience a hard landing” and that they will be improving the “efficiency” of government investment, emphasizing targeted spending.

Switching to the issue of the South China Sea, China’s foreign minister said on Tuesday that Beijing won’t permit other nations to infringe on what it considers its sovereign rights in the strategically vital area. Over the past two years China has been putting a lot of effort in the South China Sea by piling sand on reefs and adding airstrips and military facilities. The amount of Chinese naval ships working in the area have dramatically increased over the past years and have thus expanded China’s military footprint in the region. Neighboring countries have complained about China’s presence in the area as it’s also home to some of the world’s busiest shipping lanes.

The U.S has also voiced their concerns about China’s expansionist ideas in the region, because if they would succeed in their South China Sea project, China could be in de facto control of an expanse of sea the size of Mexico and military superiority over neighbors with competing claims to the waters. This buildup will also make it more difficult for the United States Navy to quickly defend allies with weaker militaries, like the Philippines. The Chinese foreign minister maintains the stance that “China was the first country to discover, name, develop and manage the South China Sea islands” and that is one of the reasons why these islands are theirs.

When it comes to North Korea, on Tuesday China expressed their concerns over the sanctions that were imposed on their neighboring country and warned of the consequences of provoking unrest:

“China will not sit by and watch if there is fundamental destruction of stability on the Korean peninsula” said foreign minister Wang at a briefing held during the National People’s Congress. “China will not sit by and watch unwarranted damage to China’s security interests,” he added, urging all parties to “act with reason and care, and refrain from aggravating tensions”. Beijing has repeatedly stated that they will only enforce sanctions that specifically target North Korea’s ability to make weapons, but it is also very important to them that the country remains stable.

China has several areas to work on, but their leaders are confident that the country will pull through and regain the economic strength that they have been losing. The U.S will continue to closely monitor the situation in the South China Sea to make sure that the Chinese don’t provoke unrest in the region. Problems could arise regarding North Korea if China decides to stop supporting the sanctions or to change their aggressive tone to a softer, more willing to compromise one. However, for now, the country should focus on changing their economic strategies and implementing new policies that will make more jobs and make the economy thrive again.

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Gabriela Bernal 23 Articles
Gabriela Bernal is interested in politics, international relations, and terrorism. She is pursuing a degree in political science and plans on pursuing her postgraduate studies in the U.K. She likes to write, read, play tennis, travel, and learn new languages.

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