China 2030

These reports made for sober reading and underpinned the Howard Government policies to retire all government debt and save tens of billions of dollars in future funds.

According to the China 2030 Report, policies to deal with the ageing challenge will be crucial to maintaining social stability in coming decades.

For example, within five years China will have fewer new workers entering the workforce than those who are retiring from it.

The shrinking pool of relatively cheap labour is already creating challenges for China’s manufacturing sector, with some companies seeking lower cost alternatives in other countries within South-East Asia and Africa

There is a particular sensitivity within China about these challenges due to the structure of its political system.

There is little doubt that debates about the role of government and the rights and responsibilities of individuals are likely to challenge the Communist Party’s tolerance for political discourse.

The implication of social disruption from large-scale and rapid urbanisation is also an issue that China’s leaders need to consider, according to the report.

China is also under increasing international pressure to adopt a market-based exchange rate for its currency, which is currently pegged to the US dollar.

While this has been a source of ongoing tension between China and the United States, China’s leadership has resisted calls to float the exchange rate.

The dispute has at times bordered on confrontation as some political leaders have suggested that China be officially designated a “currency manipulator” to pave the way for retaliatory sanctions.

The China 2030 report identifies six key areas for reform to enable the nation to build on its current strengths.

These are to: clarify the roles of the private and the government sectors to ensure a full market economy operates; boost investment in research and development; more effectively deal with environmental issues; ensure that opportunity is available for all its citizens and provide a social safety net; strengthen government sector finances and ensure spending at all levels is sustainable, and; integrate more fully with global markets.

There are many challenges in the report for China’s policy makers but it also details the tremendous opportunities for China and the world.

The embrace of greater freedom of speech and greater tolerance of political debate will ultimately strengthen Chinese society, not weaken it.

That is an outcome the whole world will embrace.