The People’s Republic of China 153
could present serious problems. Should an economic crisis lead to rapid
infl ation or rising unemployment, the resulting labor unrest could make
the student demonstrations of 1989 look mild by contrast. In response
to the U.S. and global fi nancial crisis, the Chinese government in late
2008 announced a two-year, $586 billion (7 percent of China’s GDP
each year for two years) economic stimulus program of infrastructure
building to help maintain rapid economic growth.
The environment also presents a steep challenge to the People’s
Republic. In its rush to industrialize, China tries to use every energy
source it can, including its abundant reserves of low-grade soft coal,
which—along with its rapidly growing automobile industry—has made
China’s major cities today among the most polluted in the world. At the
same time, the government is investing heavily in wind and solar power
and in building environmentally effi cient buildings, putting China on
par with Western Europe and considerably ahead of the United States
in green technology.
In the last twenty years, Taiwan has become a functioning democ-
racy. From 2000 to 2008, the Nationalist Party in Taiwan lost power
to the Democratic Progressive Party, which at times called for an inde-
pendent Taiwan, despite threats from Beijing that China would invade
Taiwan if it ever declared formal independence. Taiwanese businesses
have invested billions of dollars in factories in China, and both sides
have become highly dependent on their economic ties. The twenty-fi ve
million people of Taiwan now enjoy a fully modern industrial economy
with one of the highest standards of living in Asia, making the ambiva-
lent status quo with China quite attractive. Appealing to the need for
stability and improved relations with the People’s Republic, the Nation-
alist Party’s Ma Ying-jeou won the presidency in Taiwan in 2008.
In the summer of 2008, Beijing hosted the Summer Olympics, with
10,500 athletes participating from 204 countries. Spending an estimated
$42 billion on new infrastructure, including the architectural marvels of
the Beijing National Stadium (the “Bird’s Nest”) and the National Aquat-
ics Center (the “Water Cube”), the Chinese government was determined
to demonstrate to the world the wealth and cutting-edge modernity of
today’s China. While hosting the Olympics did not visibly change the
Chinese Communist Party’s tight control of information and intolerance
of political dissent, it was clearly a source of pride to the Chinese people
to host such a successful Summer Olympics and to see Chinese athletes
win more gold medals (fi fty-one) than any other nation.
The United States and China have developed a relatively coopera-
tive relationship over the past twenty years, despite lingering suspicions