Policies and Strategies of Growth - Case Study Example

Policies and Strategies of Growth Name Institution Date Policies and Strategies of Growth Introduction Each nation around the world is faced by particular challenges that affect its growth. The circumstances that are prevalent in a particular nation have the potential of affecting its growth. Some circumstances such as poverty and insecurity have negative impacts on the growth and development of a nation. The policies and strategies of a nation in most cases are developed in order to address the prevailing circumstances. This has led to the question of whether the circumstance prevalent to a nation should determine its policies and strategies of growth. The growth and development of a nation is important in ensuring that the livelihoods of the people are improved. The quality of life is dependent on the ability of the people to solve the economic problems facing them. The productivity of a country is also an important aspect that determines the competitiveness of the economy. Some of the countries such as China have been able to experience a high economic growth rate. This is despite the high prevalence of poverty after independence (Oi, 2015: 230). The unemployment rate in the country was also high in the mid-twentieth century. However, the country was able to experience an economic growth after the development of some economic policies. The circumstances that were prevalent in the mid-twentieth century are no longer a threat to the current economy. Currently, the country is faced with new challenges that influence its policies as well as economic growth. The paper thus discusses the growth of China in support of the statement that the context and circumstance prevalent should determine the policies and strategies of growth. Discussion In the 1970s China is one of the countries that had the highest poverty prevalence in the rural areas are well as the urban areas. About 600 million people at the time were living in poverty. This prevailing circumstance had a negative impact on the growth and development of the country. About 85% of the people in China were living under the poverty line in the 1970s (Lin & Yu, 2015: 93). The levels of income inequality in the country were quite high as a result of the high poverty prevalence. The incidences of extreme hunger were high in China at the time which contributed to other social problems. There were a high number of deaths as a result of malnutrition. The government faced a lot of challenges in terms of providing the basis services to the people. However, based on this prevailing circumstance, the government developed growth strategies and policies that were specifically aimed at addressing the issue of poverty. A well developed and designed poverty reduction program was developed by the government in the 1980s. This was based on a careful study of the situation and the development of proposal to deal with the high levels of poverty. The main strategy involved eradicating poverty at the village level. About 148,000 villages were targeted during the program (Lin & Yu, 2015: 93). This strategy was aimed at ensuring that the local people can earn a better income. The government development funds were also allocated for the purposes of eradicating poverty in the country. About 70% of the people have currently been lifted out of poverty as a result of the policies and strategies. This is an indication that the growth and development policies should be developed based on the context and circumstance prevalent. The governmental strategies are greatly attributed to the alleviation of poverty in the country. Based on the high levels of poverty, the government took three main approaches and strategies. This included the development oriented strategy, social security backed strategy and the human capital strategy. High priority was also given to the eradication of rural poverty. This was in a bid to reduce the high rate of rural-urban migration which was also prevalent at the time as a result of poverty. The funds for poverty eradication in China have always been increased for the purposes of ensuring that poverty is eradicated. Since 1980, the government has allocated RMB 198 billion for the purposes of eradicating poverty (Ho & Odhiambo, 2011: 110). This strategy has been quite successful as poverty eradication was given full attention. Minimum living standard allowance was also developed as part of the program. This was used for the purposes of measuring the levels of poverty as the strategies and policies were being rolled out. By 2010, more than 70 million people were benefiting from the minimum living standard allowance. This has played an important role in terms of ensuring that poverty is reduced in the country. All the policies and strategies were developed in response to the poverty problem that was facing the country at the time. The economy of the country was able to achieve a high level of growth and development after the prevalence circumstance was used for the purposes of developing strategies and policies. Early education plan was also implemented after the government noted that the levels of literacy at the country were low. The low levels of literacy were also contributing to the poverty problem that the country was facing. The health of the people was also deteriorating as a result of poverty. This led to the policies that were aimed at improving on the nutrition of pregnant women as well as the children below the age of five years. The investment in education and health was prioritized as a result of the high prevalence of illiteracy among the people. The situation at the time was worse in the rural areas as the children were not going to school. Currently China is considered as one of the countries that have invested heavily in the education sector (Lloyd-Jones & Rakodi, 2014: 18). As a result of investing heavily in education, the human capital has been opened up and this has impacted positively on trade and commerce. As a result of the strategies and policies based on the prevailing circumstance, China is the first country that was able to complete the first millennium development goal. The first millennium development goal involves the eradication of extreme poverty and hunger before 2015. This is a further indication that using the prevalent circumstance to develop policies and strategies of growth can lead to success. The open door policy was developed in China for the purposes of attracting the investors. This is after the government note with concern that the country was not attractive to the foreign investors. The local firms were struggling to build the economy at the time. Special economic zones were developed in order to allow the investors to invest. The policy with regards to the special economic zones was for the purposes of ensuring that the local firms will not be inconvenienced by the entry of foreign investors but will instead benefit from foreign investments. The policy initially allowed the foreign investors to invest in the areas with more than 20 million people. This had a positive impact on the poverty eradication process as most of the people were employed as a result of the foreign investment. As a result of the policies and project, China is expected eradicate poverty completely in the near future (Christiaensen & Todo, 2014: 48). This is also considering that the new Silk Road economic belt in the western areas and the maritime Silk Road is underway. The investment climate in China is currently high and most of the investors are setting up their companies in the country. As a result of the policies and strategies, productivity has improved in the country. Currently, China is the second largest economy in the world after the United States of America. There have also been suggestions that China may end up being the largest economy in the world in the near future. Circumstance prevalent in any nation should play an important role in terms of determining its policies and strategies for growth. The level of innovativeness in China was low immediately after independence. The use of manual methods of production was common. The level of mechanization was also low. However the country developed policies that led to the reformation of the education sector. The reforms were mainly for the purposes of ensuring that innovations are promoted. A lot of emphasis was placed on the science subjects. This promoted innovativeness as well as the use of science to solve problems. In 2012, the country invested $ 163 billion for scientific research and development (Hannum & Wang, 2012: 17). China is one of the leading countries in terms of using technology. The economy has experienced a considerate growth and development as a result of using technology to carry out different operations. The high level of automation as well as mechanization has improved the production process. The policy on science and technology has seen the country produce about 10,000 Ph.D engineering graduates and about 500,000 Bsc graduates. This number is far large than any other country in the world. The country was able to deal with the prevalent issues regarding illiteracy through the policies that were put in place in the education sector. China is currently recognized as a world leader in the telecommunication and computing industry. Huawei and Lenovo are Chinese companies that operate in the telecommunication industries and they have a wide customer base in most parts of the world. The country was lagging behind in the fields of science and technology in the 1970s. This is a result of lack of intellectual resources. However with the development of education and scientific policies China has achieved a considerable growth in the field of science and technology. By 2003, China was the third country in terms of sending human into space. In the 1970s the telecommunication industry in the country was performing poorly. The government introduced policies that aimed at ensuring that more private players enter the industry. This saw the development of a high number of telecommunication companies. The prevalent circumstance at the time in the telecommunication industry led to the development of policies and strategies. This had a great impact on the growth and development of the industry. The policies have seen China emerging as the country with the largest number of active cellphone users in the world. The number of internet and broadband users in the country is the highest in the world. The country has about 600 million internet users as a result of the growth and development of the industry which is able to serve the need of the people. The economic strategies as well as policies in China were thus useful in terms of stimulating the growth and development of the economy. This was a as a result of developing the strategies and policies in relation to the contexts and circumstance prevalent. The population of a country is a factor that determines its ability to achieve growth and development. A high population is important in terms of ensuring that a ready market for development is created. On the other hand, a huge population also puts a lot of pressure on the economy as a lot of resources are required to sustain the economy. China has the highest population in the world although it is also the second largest country in the world. The country was facing a rapid increase in population in the last quarter of the twentieth century. The increasing population was a prevalent issue as it a lot of resources was required to sustain the population. The high amount of resources required had crippling effect on the economy. This led to the development of one child policy in a bid to control the growing population (Breznitz & Murphree, 2011: 14). The policy was a success in terms of controlling the population growth and hence reducing the pressure on the economy. A lot of opportunities have also been created for the people in China as a result of the policy. The economy as well as the resources is adequate to sustain the huge population. Although the country still has one of the highest population, the policy has played an essential role in reducing the rapid population growth which was being witnessed in the last quarter of the twentieth century. The economy is able to support the provision of social services to the children as well as the aging population as a result of the policy. Employment and labour are important factors of production in all the industries. Employment has been a problem in China over the years. However as compared to the other countries, the problem of employment in China is quite unique. In some regions, the unemployment rate is high as the industries cannot absorb all the qualified personnel. Other regions are experiencing a shortage of labour. Guangdong province which has a shortage of about 1 million workers is a good example (Zhang, Wang & Wang, 2012: 408). The unequal distribution of labour in the country is a problem that has the potential of affecting the economy of the country. The government came up with a policy to enhance the employment distribution. The policy has played an important role in terms of ensuring that the industry is reformed. The state owned enterprises has also been developed as a strategy to ensure that the employment sector in the country is enhanced. China is registering some success in terms of the distribution of labour after the policies were put in place. Some of the coastal areas have managed to address the labour shortages and hence playing an important role in the growth and development of the economy (Bai, Chen & Shi, 2011: 132). The labour market in China is also becoming competitive as a result of the policies that have been put in place. The competitiveness of the labour industry has ensured that the country is able to work with highly qualified personnel. This has contributed to the growth and development of the economy. Conclusion In conclusion, it is evident that context and circumstance prevalent in any nation should determine its policies and strategies of growth. The strategies and policies in China have been developed while considering the context and circumstance. China is the only country in the world that has been able to eradicate hunger and reduce poverty in accordance with the first goal of the United Nations Millennium development goals. It is evident that the policies and strategies that were developed by the government have greatly reduced poverty. Poverty is set to be eradicated completely in future as a result of the strategies and policies. It is evident that the country has also been able to advance in terms of science and technology as a result of the policies in the education sector. The one child policy has reduced the high population growth rate which has impacts on the growth and development of the economy. It is evident that the government policy and strategies has also been successful in other areas such as employment and telecommunication. References Bai, X., Chen, J., & Shi, P. (2011). Landscape urbanization and economic growth in China: Positive feedbacks and sustainability dilemmas. Environmental Science & Technology, 46(1), 132-139. Breznitz, D., & Murphree, M. (2011). Run of the red queen: Government, innovation, globalization, and economic growth in China. Yale University Press. Christiaensen, L., & Todo, Y. (2014). Poverty reduction during the rural–urban transformation– the role of the missing middle. World Development, 63, 43-58. Hannum, E., & Wang, M. (2012). China: a case study in rapid poverty reduction. Indigenous People, Poverty, and Development. Ho, S. Y., & Odhiambo, N. M. (2011). Finance and poverty reduction in China: an empirical investigation. International Business & Economics Research Journal (IBER), 10(8), 103- 114. Lin, J. Y., & Yu, M. (2015). Industrial Upgrading and Poverty Reduction in China. Structural Change and Industrial Development in the BRICS, 93. Lloyd-Jones, T., & Rakodi, C. (2014). Urban livelihoods: A people-centred approach to reducing poverty. Routledge. Oi, J. C. (2015). Development Strategies and Poverty Reduction in China. Developmental Pathways to Poverty Reduction, 230. Zhang, J., Wang, L., & Wang, S. (2012). Financial development and economic growth: Recent evidence from China. Journal of Comparative Economics, 40(3), 393-412. Read More