Over the past 35 years, the Chinese economy has grown to an unprecedented degree and particularly the secondary sector of the economy. China is currently the worlds second largest economy and if it continues to grow at its rapid growth rate of 7.7% per annum, it could become the largest economy in the world. In 2013 China’s GDP averaged to 9.6 trillion USD, of which the secondary sector of the economy accounted for 44%. There are several causes to this incredible growth in the secondary sector; some of which include, China’s abundance of raw materials, massive workforce, change in government policies and China’s convenient location combined with the increase in globalization. Although the growth in the secondary sector has positively impacted the Chinese economy, it has brought challenges to the environment as well as the Chinese community. The purpose of this essay is to outline the causes of the growth in the secondary sector in China as well as discuss the effects of this unprecedented growth.
A fundamental cause of the growth of the secondary sector of China is China’s abundance of raw materials. China is rich in raw materials, particularly coal, oil and iron ore: all of which contribute to powering it’s rapidly growing secondary sector. Figure 1 demonstrates a table of the top ten mining countries in the world with regards to their domestic mines output of the worlds most popular
Figure 1: A table demonstrating the biggest mining countries in the world through terms of their domestic mines output of the most demanded mineral commodities (2014). and investable mineral commodities. The table confirms China being the number one country for domestic mines output as it holds the highest number of mining points: 216. According to the table, China is the world leader in mining gold, zinc, lead, molybdenum, iron ore, coal, tin, tungsten, rare earths, graphite, vanadium, antimony and phosphate. Additionally, it is the worlds 2nd highest miner of copper, silver, cobalt, bauxite/alumina and manganese. Being the worlds’ leading miner of raw materials such as iron ore and coal enable China to efficiently power their heavily growing industry. Coal is needed to power heavy machinery in factories as well as in the production of steel. Similarly, iron ore is needed for the production of iron which is then processed in factories with coal to produce steel that is turned into essential everyday items from automobiles to paper clips. Without these raw materials, China would have had to import the natural resources from foreign countries which would not only be costly but provide an inefficient industry as China would not have the constant supply of the necessary materials to keep the machinery and factories running. Therefore, the abundance of raw materials in China ensured that production and industrial manufacturing of the secondary sector was able to grow and expand and still continues to do so.
Another cause of the rapid growth of the secondary sector in China is its massive workforce and growing population. China holds the largest labor force worldwide averaging to over 800 million people, according to ‘The World Bank.’ The profusion of workers that still continues to expand by approximately 7% per annum ensured that there was a plentiful supply of people to work in arising factories and industries. Additionally, the mechanization of agriculture resulted in several workers relocating from rural to urban areas and finding work in factories which also helped the secondary sector grow. Before the “one-child” policy arose in China, adults were free to produce as many offspring as they desired; however, in most cases these offspring would be raised with a lower standard of living and receive minimal education before being employed as factory worker. The growth in the uneducated population, however, would provide more unskilled workers to industrial jobs and allowed more factories to open and more products to be produced as China had the workforce to support these rapid expansions. Therefore, China’s massive workforce and growing population were a vital cause of the growth in the secondary sector in China as without the excess of workers, the rapid rise of new factories would not have been feasible.
China’s relatively recent change in government policies has also been a major cause towards China’s growth in its secondary sector. In 1978, Deng Xiaoping became chairman of the National Committee of the Chinese People's Political Consultative Conference and guided China towards capitalist market reforms which Xiaoping hoped would raise foreign investment and growth. Previously, Communist Party leader Mao Zedong had strived to change China into an industrial country and he succeeded minimally; however, the collectivisation concept of ‘The Great Leap Forward’ and The events of the ‘Cultural Revolution’ led to a decline in production and GDP. Fortunately, Xiaoping came into power and ceased the collective farming method brought upon China by Zedong and began a “Responsibility System” in which farmers would be able to grow whichever crops they desired and sell any surplus for profit. This was the first step towards moving China away from a centrally planned economy in which the government made all economic decisions rather than the consumers and businesses. Xiaoping then continued to set up areas in the south of China in which investors would be given tax reductions for their revenue and technical
Figure 2: A graph demonstrating the growth in China's industrial production since 1978. expertise. Xiaoping continued on this path to economically reforming China and figure 2 exhibits China’s successful rise in industrial production since 1978. Xiaoping’s shift away from a centrally planned economy has allowed the uprising of private industries which are able to individually flourish without sharing their profit with the entire country. The multiplication of these private industries combined with increases in foreign investment has allowed industry production in China to increase at an groundbreaking rate as demonstrated in figure 2 and in 2010, China overtook The USA as the worlds largest manufacturing nation. Thus, the significant change in government policies from collectivisation of the people and their profit in a centrally planned economy to the reformed economically thriving China with several private industries has enabled the secondary sector in China to prosper and grow into the world’s largest manufacturer.
The final major cause of the growth in China's secondary sector is the shrinking of the world, also known as the increase in Globalisation. Globalisation has expanded China’s international trade sixteen times and raised China’s dependency rate on trade from 10% to 36%. A prime example of globalisation is when companies in High income countries (HIC’s) have goods assembled in Low income countries (LIC’s) due to the cheap labor and manufacturing costs. Since China had both a massive workforce as well as cheap and unlimited access to raw materials it began to be a popular destination for large companies in high income countries such as The United Kingdom or United States of America to get their products manufactured cheaply, quickly and efficiently. An example of this is the famous sportswear brand, Nike, which manufactures 62% of their apparel, 46% of their equipment and 34% of their footwear in China. The products are then shipped to the high income countries where they are sold to the wealthier middle and upper class citizens. Additionally, China joined the World Trade Organization in 2001 which proved to be a major move in liberalizing their economy and market and allowing China to further integrate into the global economy. The advantage of joining the World Trade Organization ensured that China’s access to foreign markets are stable and abrupt disruptions in foreign trade due to changing policies or governments will be reduced. This will help the Chinese economy and specifically the secondary sector of the economy to grow as the products manufactured for trade are all apart of the secondary sector and long-term trade relationships in the World Trade Organization signifies long-term growth in the secondary sector. Globalization has enabled China’s secondary sector to grow and flourish through the membership of the World Trade Organization as well as being a cheap and efficient manufacturer for several companies and corporations in HIC’S and MEDC’S around the world.
The rapid growth in China’s secondary sector has been globally debated by politicians and economists to determine whether this growth brings advantages or disadvantages to China. Factually, the growth of the secondary sector in China has both positive as well as negative effects. Positively, China is now the worlds second largest economy and the growth in the secondary sector has been a great contributor to this prestigious position. Although China’s economy has been positively impacted by this secondary sector growth; Its environment and society have suffered.
China’s once tranquil and clean environment has been dangerously damaged due to the fast growth of industries and factories in China. Both the air and water have been majorly polluted as a result of industrial growth in the secondary sector. China is now the world’s largest emitter of greenhouse gases, after overtaking the United States in 2007. In 2014, China was responsible for 27% of global emissions and at least 80 percent of China’s 367 cities with real-time air quality monitoring failed to satisfy the national small-particle pollution standards during the first three quarters of 2015. Figure 3 represents China’s massive coal consumption and in 2013, China accounted for 47% of the global coal consumption which is almost as much as
Figure 3: A line graph portraying the escalation of Chinas coal consumption compared to Global coal consumption excluding China. all the countries in the world combined. The reason for this is that burning of coal is used to power factories and machinery in China’s secondary sector as China has an abundance of coal and it is a cheap and efficient source of energy. Burning coal is the single largest human-made source of carbon dioxide emissions and since China is responsible for almost half of the global coal consumption; China is partly liable for climate change and global warming. Not only does burning coal to power factories contribute to global warming; however, burning coal releases particulate matter into the atmosphere which can cause long-term breathing illnesses. As China’s secondary sector continues to grow, the more coal is required and the more coal is burned in order to power the factories until more sustainable long-term power solutions are discovered and put into use. As more coal is burned to power industries, more carbon dioxide is released into the atmosphere and hence, the issue of climate change is worsened.
Another large environmental issue associated with the growth of the secondary sector in China is water pollution. Figure 4 demonstrates
Figure 4: A doughnut chart demonstrating the percentages of overall groundwater quality in China. the overall groundwater quality in 2013 with almost 60% of Chinas groundwater being polluted. This is a major concern as one third of China’s water resources, including drinking water, are based on groundwater and once groundwater is contaminated, the process to clean it is extremely costly. Polluted groundwater is often an effect of the improper disposal of industrial liquid waste and therefore, growth in the secondary sector of industry would indefinitely result in an increase in polluted water.
Another negative effect of the growth in China’s secondary sector is the effect on China’s society. Violation of workers rights has become increasingly common, especially for those who are employed in cheap labour in large factories and industrial centres. The pie chart in figure 5 shows that the majority of worker strikes and protests in China in 2015 were from workers employed in the manufacturing sector. Since a large
Figure 5: A pie chart exhibiting the percentage of worker protests in China by the industry in which they are employed. sector of China’s economy is dependent on cheap manufacturing in the secondary sector, the rights of workers are often overlooked in order for profits to be gained and this causes social conflict within China that then results in strikes and protests. An example of the violation of workers rights in China was in a technology manufacturing plant in China that belonged to the the company Pegatron. Pegatron, the manufacturer of the majority of Apple products, was accused in 2013 for violating the rights of over 70,000 workers who were employed in the manufacturing plant in China. They were alleged to have broken 86 labour laws and some of the most prominent violations included forcing pregnant women to work the full 11 hours shifts whilst standing as opposed to the legal 8 hour shifts with majority of time spent sitting and forcing workers to complete 66-69 hours a week which is exceedingly over the legal limit of 49 hours a week. Additionally, the hourly wage of Pegatron workers employed in China’s plants producing Apple products is below $1.50 which is not enough for one to sustain themselves or their families and essentially forces workers to work overtime. This complete undermining of workers and violation of their rights is majorly associated with jobs in the secondary sector whose aim is to produce as much as possible for as little as possible. The growth in the secondary sector has ultimately prompted a growth in cheap labor, primarily in large factories, and caused the neglect of workers rights in China.
Although the growth in the secondary sector in China has brought negative consequences on China’s society and environment, it has had a tremendously positive effect on China’s economy. China is now the worlds 2nd largest economy and is on its way to becoming the worlds largest economy. In 2013 China’s GDP averaged to 9.6 trillion USD and the secondary sector accounted for 44% of this figure. Additionally, Chinas’ status has rise from an Low income country to medium income country. Without the unprecedented growth in China’s exports, caused primarily by growth in the secondary sector, China’s economy would have failed to grow at such a rapid rate. The line
Figure 6: A line graph displaying the increase in China’s exports from 1978 to 2006. graph in figure 6 demonstrates the expeditious growth in China’s exports between 1978 and 2006. The increase in exports is essentially due to the growth in manufacturing and production in China’s secondary sector that results in China having such a large exporting value. As China’s secondary sector began growing and manufacturing products for companies in High Income countries, China’s exportation rates also grew as they were expected to export these cheaply manufactured products back to the high income countries. The more producing and exporting China carried out for high income countries: the more profit the Chinese economy was receiving. Therefore, the growth in the secondary sector prompted a growth in China’s exportations as China began to manufacture several products for high income countries which brought large profits to the Chinese economy. As the secondary sector grew exportations grew and ultimately; China’s economy began producing major profits. The profits China was producing from the exportation of products manufactured in the secondary sector helped lift China to becoming the worlds second largest economy and will continue to help China become the worlds largest economy.
China’s secondary sector is one that has rapidly grown and developed over the past 35 years and is likely to continue rapidly and growing alongside the newly prominent service sector in China. China’s richness in raw materials, reforms in government policies, Brobdingnagian workforce and role in globalization were all important causes to the growth of Chinas’ secondary sector. A positive effect of this growth is evident in China’s economy as China is currently the worlds second largest economy and China would not have reached this prestigious position without all their exportations of products manufactured in the secondary sector. However, several factories and plants in China tend to violate workers rights in order to gain profits and this is an extremely negative effect of the growth in the secondary sector. Another negative effect is the damage the secondary sector has done to China’s environment through the burning of coal to power heavy machinery as well as the improper disposal of industrial liquid waste that has contaminated groundwater. Although China’s secondary sector may still continue to grow, many of its causes are unsustainable or infinite such as its’ abundance of raw materials and its currently massive workforce. Additionally, China will have to find a way to make its large manufacturing industry more sustainable and environmentally friendly whilst consistently and carefully complying with legal workers rights. Overall, the secondary sector in China has grown unprecedentedly over the past 35 years due to several social, political as well as geographical reasons and its positive and negative effects on China are likely to be altered as China begins the development of their new tertiary sector.