But experts differ to vary. They believe China is facing various social, economic and political challenges and believe these could be the stumbling blocks in China's aspiration to quadruple the economic growth.
Uneven growth
"Due to uneven growth and China's adoption of 'Hire and Fire' policy there is a simmering discontent among the local population," says Srikant Kondapalli associate professor in Chinese Studies at Jawaharlal Nehru University.
This has resulted in rise in protests in China during the last three years which were earlier unheard off. Dr Kondapalli says in 2005, there were nearly 75,000 protests that rose in 2006, to 1.27 lakh, and in 2008 to 1.4 lakh.
"This is mainly due to the gap in the economic standards of people in rural and urban areas and in coastal and interior areas," says D S Rajan, a former bureaucrat who served in China and Japan for more than a decade.
"An average worker in Shanghai earns 10 times more than his counterpart in interior rural areas. This has been the result of over-concentration by earlier regimes over urban and coastal areas for development. Such situation is leading to rural migration to urban areas besides contributing to unemployment," says Rajan, who is also the director Chennai Centre for China Studies.
"The uneven growth has forced China to put in place a western development plan to push growth strategies westward and away from the coast. The recent earthquake in Sichuan, one of China's poorer provinces, was an eye-opener of sorts for the world used to measuring China's economic strengths on the basis of flashy photographs of Shanghai's fashion districts," says Dr Madhu Bhalla, the Head of the Department of East Asian Studies Faculty of Social Sciences, Delhi University, says.
Unemployment
"Official estimates for urban unemployment have been about four per cent for a while but it is widespread knowledge that Chinese authorities do not include laid off workers as unemployed. Currently the rate of unemployment in China is 23 per cent," she says.
" A slowdown in exports is also causing unemployment. This slowdown has been due to appreciation of the Chinese currency, increase in production costs and decrease in international demand," says Rajan.
"China's efforts to comply with its World Trade Organisation (WTO) commitments may engender more unemployment. Potential worsening of these adversities may cause a reduction between 0.3 and 0.8 per cent in China's annual growth rate in the coming decade as a result of lower factor productivity, lower savings, and reduced capital formation," says RAND, a US based think tank.
Foodgrain crisis
The other major problem China is facing is the rise in population forcing the country to import grains to mitigate the food crisis as feared by monetary agencies. "The reasons are dwindling water resources in China and fall in crop yields due to global warming. In January this year, China has announced food price controls in response to rise in food prices globally," says Rajan.
" China's population growth and the changes in the country's dietary trends (rising demand for food products) may necessitate more food imports. Any effort in China to produce grain-based bio-fuels may also add up as a factor compelling food imports," says Rajan.
"And also if green house gas emissions are not controlled in China, the country's rice, wheat and corn crop may drop, necessitating imports," added Rajan.
"While there has been a significant drop in agricultural production, the industrial growth has risen to 12-13 per cent forcing the rise in consumption patterns. Due to the urbanisation policies, the agricultural land is shrinking. By next decade, the demand for foodgrains would be 710 million tones as compared to the production of 512mts forcing China to survive on imports," says Kondapally.
Water resources
China is also beset by a perennial maldistribution of natural water supplies. The North China plain, with over a third of China's population, has only 7.5 per cent of the naturally available water resources. Subsurface aquifers in North China are near exhaustion, and pollution discharges from industrial and other sources further aggravate the shortage of water for consumers and industry. "This would result in reduction of China's annual growth rate by 1.5 to 1.9 per cent," says RAND.
Rise in fuel prices
The rise in fuel prices is also a major cause for China.China's need for energy is projected to increase by 150 per cent by 2020. To sustain its growth, experts feel China's consumption will grow by 7.5 per cent per year, seven times faster than the US. "With the West Asia situation continuing to be volatile, China could also be one of the hard hit nations if the Iran crisis worsens," says Bhalla.
"The alternative is to go for hydropower, wind and solar energy resources but this will take nearly 20 to 30 years," feels Kondapally.
One-Child policy
Many social policies of China will result in major problems for China. Take the case of one-child policy. "The emphasis on one-child has led to widespread gender selection practices have created a male female national ratio of 119:100 in 2005 alone. China already faces an acute shortage of women of marriageable age in some provinces resulting brutal kidnapping and forced marriages," says Bhalla.
Africa policy
China is also looking to Africa for resource mobilisation. But Bhalla says its African policy has given rise to many criticisms. "There has been a pressure on China to make a distinction between ravenous profiteering and constructive economic engagement in Africa. The effort of China to ship arms to Zimbabwe during its recent election crisis is a case in point as was its Sudan policy earlier," says Bhalla.By 2013, almost 16 per cent of the population will be over 60 years or more and by 2040, the year when China's economy is estimated to leap ahead of US, the majority of the population will be over 60 years, says Bhalla
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