China. Economic growth

When it comes to the most serious problem hindering Chinese modernization efforts today, our group considers the Knotty Political System in china as the most serious problem. To be specific, Rampant Corruption and Rule by law in political system are the focus of our presentation. Before i go into the problems, I would like to highlight the Modernization in Chinese context in terms of the direction of Chinese modernization , which is quite different from other western countries.

China's modernization has been based on the experiences and lessons of other countries, the western countries in particular. China’s goal is to continue modernizing until it joins the first-world. The West was used as an example for Deng Xiaopimg's four modernizations, including agriculture, industry, national defense, and science and technology modernizations, through urbanization, industrialization, and economic policy however their management was completely Chinese. That means the PRC remains an authoritative regime, which is contradictory compared with other countries that have modernized as Democracy is the political characteristic that has defined modernized nations in general.

Thus, our group sees that the lack of political reform towards democracy in china leads to the Knotty Political System, which is an obstacle in modernizing China thoroughly because without democracy, hardly can Chinese people monitor the rule of the government and reflect their discontent towards the communist party.

Now, I will move on to explain why we think knotty political system is the most serious problem hindering Chinese modernization efforts today. According to Mr. Coleman an American Political scientist, there are Six “crisis” facing modernization and we find that the knotty political system in China could give rise to two crisis proposed. First, Rampant political Corruption could lead to the crisis of penetration which means the difficulty of implementing policy. Also, the common perception of foreign media towards the ruling system in China is rule by law, which would lead to the crisis of participation as there is a lack of political participatory institutions to channel mass demands to the state.

------------------------------------------------- Thus, the knotty political system is the most serious problem in terms of its fundamental and long lasting effect on the sustainability of Chinese modernization.

Then, I will look into the seriousness of Rampant Political Corruption and its effect on modernization.

As a matter of fact, the gov. officials could be very arbitrary in illegitimating private gain because property rights, legitimate business practices, and other basic elements of market economics remain poorly defined in China. What’s worse, since the political system is closed and does not have the legitimacy of elections, the Power of Chinese people to monitor the corruption behavior of authoritative regime is deprived. The government officials are still very powerful players in the economy. That’s why the corruption problem is serious in China.

The Corruption Perceptions Index by Transparency International is taken as the objective indicator of the seriousness of corruption in China. The CPI generally defines corruption as "the misuse of public power for private benefit. Examples are bribery of public officials and favoring relatives or personal friends of an official. The Corruption Perceptions Index is determined by expert assessments and opinion surveys by their perceived levels of corruption in different countries.

According to the 2011 Report of the Corruption Perceptions Index, China scores 3.6, which was assessed on a scale of 0 (highly corrupt) to 10 (very clean). More importantly, China ranks 75 and falls in the same seriousness category with Mexico and Indonesia, which are developing countries lagging behind China in terms of Modernization. This suggests that corruption in China is at alarming level.

Also, the New York Times reported the prime minister’s relative have controlled assets worth $2.7 billion. Although Chinese authorities have blocked the paper’s site, the story is still being discussed and China's serious corruption problems have been central in the discussion. More importantly, Chinese President Hu Jintao has mentioned that If the communist party fail to handle the corruption problem well, it could prove the fall of the state speech in 2012 China’s Communist Party congress. By looking into his speech, we can conclude that Chinese leaders realize the severe impact of corruption to the state.

First, I will talk about its effect on modernization from the perspective of crisis of penetration, which refers to the difficulty of implementing policy. China's corruption problems have attracted much attention because the economic reforms and rapid growth are linked closely with corruption, particularly Corruption in local government. Bribery and corruption in local government have contributed greatly to the failure of policy implementation in. To be specific, implementation problem may arise in a situation where huge amounts are earmarked for a project but the officers in charge of implementation steal such amounts or a substantial part of the amounts. This hinders the efficiency of modernization. CASE

Besides, rampant corruption does hinder economic modernization. According to a report in the European Physical Journal B, there is quantitative relations between corruption and economic factors by analyzing the dependence of the Gross Domestic Product per capita growth rates on changes in the Corruption Perceptions Index. From this graph, you can observe that negative correlation between level of corruption and long-term economic growth exits since there is negative Influence of corruption on economic growth rate due to the difficulty in implementing the economic reform policy as discussed above.

Also, corruption hinders the inflow of foreign direct investment .The level of corruption has been introduced as one factor among the determinants of foreign direct investment location since the rampant corruption in China connotes that paying bribes to corrupt government bureaucrats has been a usual practice among businessman to get “favors” such as permits, investment licenses and police protection, corruption brings additional cost of doing business on profits in China. The expected drop in profitability of investment projects could drive part of the foreign direct investment, which is a crucial component of sustainable economic modernization.

What’s worse, the danger is not just that corruption will distort economic policies and the economic growth, but that it is becoming a focus for political discontents and is a major issue for critics of the regime, as shown on Tiananmen Square in 1989since corruption itself may spiral out of control, with consequences that are difficult to predict. Therefore, the rampant corruption could add uncertainty to the road of Chinese modernization.