China Economic Development - Essay Example

? China economic development China economic development In the Gross Domestic Product growth of China was 10.45%, totaling America’s $ 5,745.1 billion, and it is expectation to rise to 11.79 % in 2011 amounting to America’s$ 6,422.2 Billion are high (Roche, 2010). Analysts predict China’s Gross Domestic Product by 2015 to rise to US$ 9,882.08 billion, rising at a rate of 10-12 percent annually between 2010 and 2015 (Roche, 2010). The economy of China is enormous and also expanding at a remarkably fast rate (Roche, 2010). Over the last 3 decades, the Chinese rate of economic growth has been astonishing, reaching 8% growth in its GDP annually (Roche, 2010). Its economy has grown at a steady process during this period, with the GDP reaching US $3.42 trillion in 2007 (Roche, 2010). China already runs the biggest economy following the United States, and according to analysts report, it will turn out to be the world’s leading economy this century (Roche, 2010). The population of China in 2010 stood at 1.341 billion, and analysts predict it will grow to close to 1.4 billion by 2015 (Roche, 2010). Also, the country’s unemployment rate in 2010 stood at 4.1% decreasing from 4.65% during the previous years (Roche, 2010). Forecasts for the year 2015 predict that China’s unemployment rate will remain at 4% between 2011 to 2015 (Roche, 2010). Nevertheless, there still exist significant disparities in the income level of the Chinese population. China’s per capita income is only US $ 2000, which is poor compared to the global standards (Roche, 2010). Reforms in the Chinese agriculture started as early as in 1978. According to Roche (2010), while the Agricultural collectivization is not soundly recognized as an efficient strategy for rural development and agriculture, there existed certain policies under the process like, health, development of the rural infrastructure, education, and agricultural technology that help lay down the foundation for the subsequent growth in agriculture. Despite the famine periods, the country recorded high rates of growth in production that over shadowed the population growth (Roche, 2010). China’s economic reforms started in the late 70’s and 80s with the focus on collectivizing the country’s agricultural activities (Roche, 2010). Chinese leader during this period attempted to transfer the heart of agriculture from traditional farming to household activities (Roche, 2010). These reforms extended to price liberalization, in a more gradual way. It became followed by fiscal decentralization (Roche, 2010). Also as part of the undergoing reforms, business enterprises managed by the state became granted independence. This means that, all the government officials found at the local levels and also managers of a number of plants had more authority (Roche, 2010). This led to the development of a number of privately owned firms within the service producing sector, together with the manufacturing sectors (Roche, 2010). Chinese banking system became diversified, and the country’s stock markets began to rise as the country’s economic reforms took hold (Roche, 2010). China began growing at a rapid pace because of these existing reforms and widely opened the shut doors of its economy to the entire globe for trade opportunities and direct more foreign investment (Roche, 2010). As a nation, it has undertaken a slow but sure method in implementing all of its economic reforms (Roche, 2010). The country has sold the equity of a number of the country’s state banks to foreign companies and also bond markets. Its role in the international market has also grown over the years (Roche, 2010). China's Global Economy The economy of China witnessed some radical transformations after Deng Xiaoping took charge in 1978 (Roche, 2010). The country has transformed from being a highly centrally planned economy to an open economy from his era (Roche, 2010). The country has now transformed to a leading power house for the world’s economy over the past ten years. In Roche’s (2010) view, coupled by the high economic growth and increasing income, China’s standard of living has grown and the consumer goods like; television sets and cars that got thought to be the reserve of the elite are now affordable to the people (Roche, 2010). From 1978 to 2002, the number of goods passing the country’s ports has risen tenfold, and the number of the country’s foreign visitors had risen to over a million (Roche, 2010). Records over the past 3 years show that the nation has been maintaining a steady, high growth rate in its Gross Domestic Product of close to 8% to 10% yearly (Roche, 2010). This trend in China’s GNI, GDP and also the per capita GDP reaching $1700 in 2005 and has become maintained at the level (Roche, 2010). Increase in the goods trade shows the high growth in China’s export over the number of years. The country has shown success in stabilizing the inflation rates after reaching a high of 7% in 2004 (Roche, 2010). The increase in the workers’ remittances from the foreign nations has also played a role in the growth of China’s GNI (Roche, 2010). One of the significant moments of the Chinese economy occurred in 11th December, 2001 when the country became a member of the World Trade Organization (WTO) (Roche, 2010). The country’s accession to the World Trade Organization meant the nation’s economy opened up to the entire world, and its trade with the Association of South East Asian Nations (ASEAN) grew rapidly (Roche, 2010). China reduced its tariff rates significantly from 16.7 percent in 2001 to 12 percent in 2002 (Roche, 2010). A number of vital steps for reducing the number of goods on the country’s import license that was 300 in 2002 are underway (Roche, 2010). With the increasing free movement of goods and services in the region, China’s neighbors’ became exposed to a huge market that has substantially led to the reduction of production costs (Roche, 2010). This has led to vast flows of foreign investment to the country. Infrastructure in China The low costs of labor and land are usually cited as China’s greatest competitive advantages to other nations (Roche, 2010). However, these are not solely the responsible factors that have made the nation a global industry. One of its main advantages is its high infrastructural standards (Roche, 2010). This does not only make production of goods possible, but it also facilitates the movement of various raw materials to the country and also finished goods out of the country (Roche, 2010). China posses massive sea ports that have the most influential gateways for its foreign trade. Going by the recent record, China ranks first globally in terms of cargo through put by its weight and also by the high numbers of containers it handles (Roche, 2010). China has also a well developed transport and railway network running throughout the country. The country has developed expressways making the container transportation effective. By late 2006, the country had six provinces with close to 2000 (km) of expressway. Also, the length of the country’s railway system is over 77 000 (km), ranking it third in the globe, next to America and Russia (Roche, 2010). Nevertheless, Japan has a more advanced and well maintained infrastructure, which undergoes regular and constant upgrading and expansion (Roche, 2010). According to Roche (2010), the country’s private and public sectors take the responsibility of a number of infrastructural services and operate them efficiently. Japan posses a remarkably extensive and highly modern road network that consists of around 1,152,207 kilometers of highways, and 6,114 kilometers of expressways (Roche, 2010). The length of the rail network in Japan is 23,670 kilometers. More than half of Japan’s rail network is electrified (Roche, 2010). The country is also famous for its high-speed trains. The country also has extensive and modern sea and air transport systems. The country’s communication system is also highly advanced consisting of both the public and private providers (Roche, 2010). References Roche, C. (2010). The Chinese Economy. Economy Watch, 4-8. Read More