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Compare china main land economic and Taiwan - Research Paper Example

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Mainland and Taiwan are two distinct regions of China that have became different political entities since the Communist revolution of 1949.Thus during the first three decades ,the 2 governments adopted various kinds of socioeconomic systems and practiced divergent strategies of…
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Compare china main land economic and Taiwan

Download file to see previous pages... venue had risen to $2278 while that of Mainland had remained a paltry $256.This broadening gap between the two economies had started attracting global attention.
Taiwan mostly is considered to have embraced market capitalism whereas China is considered to be a predominantly socialistic country. However both nations have shown that they do not pursue a purely socialistic system or capitalistic system. They in actuality pursue a mixture of both kinds to various levels. Despite the fact that Taiwan pursues a system that is capitalistic ,the government still controls the finance and banking system and makes decisions on which industries it should support and protect. Conversely, China began out under firm socialism but over the years but has started to change so as to widen both domestic and foreign markets.
One of the key bases for the disparities in growth between China and Taiwan was the distinctions in international trade. Thus industries that are high-exporting seem to lead to productivity that is faster than industries that are low-exporting. Firms that are owned by the state without any foreign assistance tend to be less productive than the ones that are privatized or joint-ventures having foreign direct investment (FDI). It wasn’t just a coincidence therefore that China for the earliest time ever matched Taiwan’s 8% GDP growth rate that it has had for years after opening up of its foreign markets, allowing the entry of FDI. One of the key stated merits of communism/socialism over capitalism is stability in growth over lengthy periods of time. Taiwan has however under capitalism displayed a more stabilized GDP growth of around 8% over the past 5 decades while China has exhibited unstable and negative GDP growth rate to a point where the government of China refused to expose statistics officially anymore (Lijun, 2002).
It wasn’t until recently when the Chinese government embraced advantages of capitalism that their economy eventually started to grow ...Download file to see next pagesRead More
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