2. Challenge–Opportunity and Mutations in China’s Economy

WEI JI(危机) in Chinese means challenge and opportunity are the two sides of a coin, and it also shows a challenge would become an opportunity by smart people. Although the economic growth is higher in the last decade, the marginal representative factor productivity is declining. It is a challenge in economic development in China. Is there any opportunity to increase productivity in China? On the other hand, with high energy demand, the supplies of electric power, coal, oil, and gas have been reviewed in this chapter. The great amount of energy consumption, especially the high share of coal use in the total energy consumption and chemical production, has resulted in a big amount of emissions and wasted water pollutions which have seriously damaged people’s health and living conditions. How do we meet the challenges? Should the energy demand keep fast growth to meet the economic growth in the future? Is it determined by economic gene? Are there any relations with economic mutation? These issues have been discussed in this chapter. Some challenges/opportunities have been studied on the mutation of the national economy by comparing the mutations of the national economy for the USA, Japan, and China. Our study findings show that the high energy consumption appears with a positive mutation and low energy demand coexists with a negative mutation; positive mutation and negative mutation will happen in turn alternatively in an economy. For China’s economy, it was in the high energy consumption period that showed a positive mutation which happened in 2000. And the next economic mutation will be a negative one which means that the economy will enter into a lower energy demand period. If the mutation were powerful enough to increase marginal representative factor productivity greatly and take a longer period, it would be an opportunity for China’s economy to grow healthily.