Social Processes Facilitating the Economic Growth of China - Report Example

Sociology of Development Table of Contents Introduction 3 Current Social and Economic Position of China in the World 4 Social Processes Facilitating the Economic Growth of China 6 Critical Evaluation 8 Conclusion 10 References 11 Bibliography 14 Introduction Since the economic reforms being enacted from the year 1979, China has been able to grow its economy with greater rapidity. Due to its rapid growth, China is often considered as one of the fastest growing economies in this 21st century context. For the period from 1979 to 2005, the growth of China’s real Gross Domestic Product (GDP) rate has been recorded at 9.6% on an average. It has also been observed that due to the rapid growth of the economy, many of the renowned economists of China had estimated that it has the full potential to become the largest economy of the world. However, China currently faces challenges in two of its specific areas mainly due to inefficient State Owned Enterprises (SOEs) and the improper state banking system (Morrison, 2006). It has also been observed that a major portion of China’s economy depends on the development of SOEs. With demolition of this sector, the entire banking system of the country is being affected, as they are largely dependent on the financial support offered by these SOEs. Despite these challenges, economic reforms, in the year 1979, had not only improved the economic situation in China, but had also contributed to the improvements in the social reforms of the country. In the present scenario, it can be affirmed that the economic conditions of the country is being improved due to its social features largely (Lewis & Litai, 2003). It can be apparently observed from the above-asserted facts about China’s development, as a workshop in the 21st century world, the role played by its social processes as non-negligible. With this emphasis, the study henceforth will aim at identifying and discussing the social processes contributing to the remarkable pace of economic development in China. Current Social and Economic Position of China in the World Since the year 1970, when China went through a series of economic reforms, it had made a move towards the making of a centrally planned system that plays a major role in the development of the country. With the design of the plan, China became one of the largest exporters in the world by the year 2010. These economic reforms began with the development of collectivized agriculture, gradual liberalization in the commodity prices, decentralization of the fiscal policies, along with increased efficiencies of the state enterprises accompanied with changes in the banking system of the country. In the recent years, China has been successful in supporting its SOEs providing a substantial amount of economic security and fostering global competitive advantages to the industry operating in the country. Despite of all these facts, it has been largely observed in the report prepared by United Nations (2013) that since last few years, the economic growth of China has slowed down. The economic growth of the country had slowed down from 9.2% in 2011 to 7.7% in the year 2012, which might however imply to its stable growth rather than its decline. The slowdown of the demand for export and decline in the foreign investment has worsened the economic situation of the country to an extent, which can also be accounted as an effect of the recent global recession and nullified as the indication of economic weakness of China. United Nations (2013) also estimated that by the year 2014, the economic development of the country would be accelerated from 7.9% to 8%. This further signifies that China has been able to obtain a certain degree of immunity from the threat of economic downfall raised due to international fluctuations, which again raises it to the position of a global workshop (United Nations, 2013). According to the data collected by United Nations Organization (UNO), China is listed as one of the largest manufacturers and exporters in the world just after USA (The World Bank Group, 2014). Partially, China’s immunity can be argued as a reward of its chronic and gradual developments observed in the social process occurring continually within its national boundaries. Stability and gradual developments in its social conditions have certainly been one of its boons to assure its progress as one of the world’s most preferred global workshops. In the course of economic development, it was observed that the major changes had come in the path of wage rates and growth of income from the export of goods. Due to the improvement of the economic reforms of the country, many of the organizations could gain the benefits of lower wage to the employees along with bringing in prosperity in the social formation of the citizens. The government of China had been making continuous improvements in the demographic features of the country such as the age and long-term care to the people(World Health Organization, 2010). Thus, it can also be stated that with the development of the social factors of the country, the economy can be raised to a certain limit. It is also worth mentioning that the economists of China had concluded stating that improvements in the field of productivity of the labour force as well as the social factors of the nation has been possible due to the improvement of the social structure of the country. It is worth mentioning in this context that the improvements of the social factors were possible due to the allocation of the resources to the most efficient factors of production (European Union, 2013). Hence, it can also be quoted that the improvement of the social factors within China had a significant influence on the developmental economic scenario of the nation. Social Processes Facilitating the Economic Growth of China China has witnessed a series of changes in its social dimensions over the last few decades. As mentioned above, it is often argued to have steered the improvements of social factors and led the country towards the attainment of the economic progress. The improvements in the field of education as well as technological advancement grounded on its knowledge-intensive labor force has largely affected the economic progress in China, which can be identified in terms of increase in the productivity of the labour along with the decrease of the rate of wages (Harris & et. al., 2010). Furthermore, through proper education to the people of China, the country has been able to gain a group of educated and skilled labour force to rejuvenate its country’s development driving a series of social changes and reforms. This development can be termed as the result of the counter-revolution occurred in China. The counter-revolution resulted to the development of the social institutions in the Chinese society along with creating ample opportunities for self-development of the youth (Ye, 2012). Apart from this, the Cultural Revolution has also influenced the development of the socio economic culture that can be identified as another social process linked with the remarkable pace of the Chinese economy as one of the world’s fastest workshops. Cultural Revolution is hostile to the internal development as well as the promotion of Communist Party of China (CPC), which states that the level of education must be encouraged within the nation so that skilled labourers are available for the organizations, triggering a socio-economic change within the nation to drive its economic progress (Lu, 2009). On the other hand, the improved health care of the people of China can also be regarded as one of the motivating factors of economic development. China, being a state capitalist power, emphasizes the proper allocation of resources to ensure that the social conditions of the nation improve to reward stability in the economic growth process. In relation to the health sectors, it can be stated that the improved health conditions of the people assured the strong and powerful labour force of the nation along with strengthening its capital power of the nation. In the ancient period as well, it was observed that the government followed the Chonqing and Guandong model, which was focused on spending the maximum budget in the health care, pension policies, education and other public services (Federal Reserve Bank of San Francisco, 2002). The employed youth were often observed to save their money in the state banks of the country under the influence of this model, which again adds value to the development of the national revenue along with raising the economic situation of the country (Federal Reserve Bank of San Francisco, 2002). Additionally, the Chinese economy has been blessed with huge volume of heavy industries and infrastructural projects, which has been significantly facilitated by the social processes of The Great Leap Forward. This planning gained the significant advantages to the formation of the larger industry in the nation along with the advantages of a centralised planning control. This process further assisted the Chinese territory in forming larger industries through which, the employment rate of the nation was raised to the maximum limit desired (Zhiyue & Gang, n.d.). Through the social processes of Sino-Soviet Split and Krushchev’s revisionism further, China has been able to mobilise its social structure along with its economic conditions to a substantial extent. It was possible as the nation could adopt both the great policies of Marxist-Lennist, which reemphasized on the development of the internal environment though the social as well as the economic development. The country has a high life expectancy rate of the people, which again benefits the economy of the country by giving productive labourers in the organizations to promote economic growth from the basic level of the economic structure of China. It has also been observed that the country has a huge supply of skilled workers due to the lack of ageing population (World Health Rankings, n.d.). Critical Evaluation China has remained as one of the fastest growing economy in the world since the last few years. This rapid growth of economy has resulted towards the rise in the per capita income of the people along with the decline in the rate of poverty. The rise in the economic situation has not only increased the per capita income but has also raised the health and education level within its society to a considerable extent, which is often regarded as essential to promote a global workshop. In other words, it can also be asserted that the economy, in some way, is being affected with the development of the social structure of the nation. As can be observed in the recent phenomenon, China has emerged as a rich economy in terms of capital and knowledge-intensive labour force. Portraying as a state capitalist power, China has often been determining the law of value as the most important aspect to decide upon the proper resource allocation strategies, which is further deemed essential to determine the overall development of the nation. All these developments can further be linked with the liberal market reforms made from 1978 onwards. It has also been observed that in the capitalist society of China, the number of billionaires has raised rapidly till the year 2009, which again signifies the development of the socio economic culture within the nation (Centre for Policy and Development Systems, 2007). Another social process that can be apparently associated with the rise of China as a world’s preferred workshop was the occurrence of counter-revolution. During counter-revolution, it was also observed that China’s ability to undergo a rapid development is due to the huge capital and the existence of CPC to allocate the resources properly. CPC forms the primary organizations of power, entitled to supervise the state owned sectors of the economy along with influence the private sectors through joint ventures and strategic investments (KPMG, 2013). Such networks or social frameworks helped in developing an all-inclusive and centralised control over the economic welfares of the Chinese society, which further contributed to the rapidity of its development within the international paradigm. Since its traditional developments, various trends of cultural developments have been taking place due to the existence of diverse political parties within China, which were further largely influenced by the conflicts occurring within its national social boundaries. In the capitalist society, it was largely observed that both the bourgeois democratic nationalist and the supporters of National party were striving towards the attainment of the sound economy along with the improvement of the societies (Meisner, 1999). In the initial stages of the Chinese revolution, it was observed that a mixed economy model and the Chonqing and Guandong model helped in forming the larger and smaller organizations to develop their business along with triggering the improvement of the banks and financial institutions. Even in the traditional Chinese history, many social transformation processes such as the Chinese revolution, Cultural Revolution, The Great Leap Forward, was found to have helped the economy in forming many of the heavy industries along with improving the social life of its citizens (Meisner, 1999). On the other hand, following of the Chonquing and Giangdong Model, the country has been able to focus on the spending of the national income earned through the trading and other activities in the field of education, health care, housing and other services. The development of these aspects apparently assured that the country is going through a rapid growth through social as well as the economic changes (Zhiyue & Gang, n.d.). In the recent years, it was also observed that China was facing challenges in the decline of the banking system and other financial institutions. Subsequently, the country was examined to follow the mixed economy model as a consequence of the Chinese revolution to improve the work culture of the state banks and the financial institutions overall (Spence, 2007). It was also observed that the capitalist society also emerged as one of the social processes facilitating the economic progress of the country shaping it as one of the most preferred world’s workshops. In the capitalist society of China, both the Proletarians and Bourgeois have had their equal contribution towards the development of the society along with raising the level of capital and labour force so that the country can generate a larger amount of national revenue and reward rapidity in the economic progress of the economy (Spence, 2007). Thus, it can be stated that the social processes or the reforms that has been in continuation since the traditional period have been quite helpful for China to steer its economic progress today. Conclusion Based on the above discussion and analysis, it can be ascertained that within the last few decades, China has been going through a rapid economic development, which has currently positioned the economy as an international hub or workshop. Such a historic economic development pace has largely been due to the long run social improvements witnessed within the Chinese society. Since the social reforms from the year 1978, China has been successful in acquiring huge capital and labour turnover. The occurrence of Chinese Revolution and the Cultural Revolution has further been observed to ironically boost the effective formation of larger industries along with assigning huge labour force for the country. The results also reveal that through the implementation of the Chonquing and Giangdong Model and the Great Leap Forward, China has been able to mobilise its social factors such as the education, health care services for the specific purpose of economic reforms within the internal environment, which acts as the pillars to the sustainable and fastest growth of the economy. With regards to the aforementioned social processes, it can be affirmed that China has been able to acquire a significant position as a global workshop currently. References Centre for Policy and Development Systems, 2007. Chinas Development: Assessing the Implications. Chinas History and Recent Accomplishments. [Online] Available at: http://cpds.apana.org.au/Teams/Articles/china_as_economic_engine.htm [Accessed March 27, 2014]. European Union, 2013. China. Strategy Paper. [Online] Available at: http://eeas.europa.eu/china/csp/07_13_en.pdf [Accessed March 27, 2014]. Federal Reserve Bank of San Francisco, 2002. 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