Unless Beijing can change the course of their economic policy and environmental usage, millions are doomed to starve.
When this happens, China will look abroad for food and resources and as the world saw in the recent pillaging of African resources, local populations suffer. The newest step of purchasing of American farmland is worrisome, just as the land grab in Africa was for commodities pricing internationally. China must reform economically and environmentally or Americans may end up paying for the consequences.
(AP Photo/Ng Han Guan)
This may seem like a drastic conjecture given that many in recent years have predicted China to be the world’s next great superpower. While on the surface this seems true, China possessing both a large economy and an expansive global system for natural resources, the underlying foundation of China’s growth has begun to crack and the fallout will wreak havoc for millions of Chinese.
China’s economics are troubling.
Last year’s growth rate of 6.9 percent was the lowest in the last 25 years. More distressing perhaps is that Chinese officials have guaranteed a growth rate of 6.5 percent, lower than 2015’s growth, for the next five years and even at that forecast, many economists cast significant doubt about that guarantee. Furthermore, in just the last six months, exports, one of the bedrocks of the Chinese economy, suffered a 20 percent decrease, one of the largest decreases in more than a decade.
All of these metrics point to a decreased buying power for the Chinese government.
This decreased buying power is reflected in reduced funds for government projects and housing. The housing market continues to be a large bubble. During my travels in the Hunan province, it was hard to miss the massive private and government housing projects that supply millions with work in the central and western provinces of China.
In 2013, the Economist reported that the property bubble in China was prime to burst due to the increasing number of “ghost towns.” The ghost towns they were referring to are actually a misnomer for massive real estate projects that have never housed people. The number of these empty housing projects is likely to increase.
Over the past five years, real estate investment has fallen from above 30 percent to below 5 percent. This decline in large-scale housing projects is reflected in a fluctuating unemployment rate.
While the Chinese contend that their unemployment rate has remained stable over the last five years at under 4.3 percent, estimates by non-government entities deem this number manipulated. Better estimates put the unemployment rate at above 10 percent since 2007: 10 percent of the Chinese labor force, 793 million people, equals 79.3 million people out of work. This amount of Chinese out of work ordinarily might not be an issue, however, the environmental factors spell an even deeper chasm for a heavily indebted Beijing.
China produces less and less food every year because of their poor environmental management practices. One of the greatest concerns is the desert creep phenomenon occurring along the thousands of miles of tree line that separate farming from the deserts that make up a large part of China’s western and northwestern border. Attempts at taming the desert through the use of the “Great Green Wall of China,” a government planted tree system to hold back the aggressive grip of the desert, have all but failed. This failure barely slowed the desert creep which claims more than 3,400 km2 of farm land per year, roughly the size of the city of Atlanta. In grains, for example, Beijing has already conceded that for the foreseeable future, the Chinese grain consumption will greatly exceed its domestic production. Unless the Chinese begin investing in farms abroad, they will be completely dependent on foreign nations to supply them the gap in some of these foods.
Being no longer self-sustainable coupled with decreasing fields for harvest follows a similar trajectory as a period of starvation in Chinese history. The Great Leap Forward Famine was a period from 1959 to 1961 where western scholars estimate that over 45 million people died from starvation. While not culturally or politically analogous, the widening gap between the wealthy and the middle class as well as grain shortages due to desertification spell a similar circumstance on the horizon.
That horizon looms even closer as oil prices reflect an ailing Chinese economy. The recent decline in gasoline prices and futures is in part due to extreme downturn in Chinese exports of African natural resources. As a large player in the global economy, any type of reciprocal downturn from the U.S. or Russia will have an even deepening effect on the economy. Once unemployment reaches a certain threshold, there is little the Chinese can do to feed their people. The cracks become clearer when the Premier of the National People’s Congress, Li Keqiang, announced a $16 billion package to accommodate resettling workers laid off due to the closing of a number of factories in order to quell civil unrest. Many western scholars view this as the first of many stimulus packages for an economy limping on.
However, some Chinese businesspeople have aggressively bought farmland over the past 10 years. The Chinese are estimated to own over $1.4 billion worth of farmland in the United States. Even if their domestic negligence prevails, the Chinese will have possession over nearly a quarter of U.S. pork and a significant hold over our farmland. When Beijing's carelessness becomes more pronounced, where do you think these Chinese owned farmlands are going to sell their products?
These factors individually fail to predict ruin for the Chinese people. However, when added together, it is inevitable that Beijing must change course if it is to feed its people. China’s reckless spending, aggressive growth despite economic downturn, and abusive environmental policy puts it on a collision course towards certain starvation. If the Chinese starve, Americans will likely pay for the consequences of their recklessness.
TheBlaze contributor channel supports an open discourse on a range of views. The opinions expressed in this channel are solely those of each individual author.