China Economy’s Development and Transformation
China is recognized globally as one of the countries that have maintained sustainable economic growth during the post economic era. The key reasons that have been linked to China’s continued economic growth include effective resource allocation and production efficiency. Both of these factors have been steered by the dynamic internal economic environment that rose from capitalistic practices after the 1870 world inflation. The Chinese economy shows a level of [instability which is linked to unpredictable capital markets.
However, the government strives towards the formulation of policies that can help in the realization of stable and predictable economy. Despite the instability observed, it is undeniable that the economy of China is constantly expanding. This has led to the shift of international focus from countries such as Germany and France which were initially considered to be strong economically. China is presently viewed as capable of offering the requisite market for international products. Understanding neoclassical theories of economics can help in comprehending the role these theories play in China’s economic transformation and the reason for China’s continued growth (Wang 55).
The changes in Chinese economy can be described as complex as well as unique. This is because despite the uneven changes that occur in the economy, the country has managed to survive three major economic catastrophes in the world, inclusive of the 2008 financial crisis. The only recognizable impact came between 1980 and 1990 and led to prolonged economic stagnation in China. In the 1980s, China reported lower economic growth rates that were incomparable to the then growth rates of countries such as Mexico and Taiwan.
The present economic growth rate is therefore unexpected making China be termed as having an exaggerated economy by some scholars. Between 2000 and 2007, China managed to experience n economic rebound based on concentration in income generating activities. With the GDP doubling that of the 1980s, China continues to be used as a model country as many of the developing nations adopt a participatory attitude towards economic development (Gaurnaut and Song 97).
Considering the changes in the economy of China since the 1980s, it can be concluded that China has not embraced the doctrine of Orthodoxy in economic growth. This is due to movement from depression to boom without passing through recession as is expected. This is explained to be due to political maturity linked to market fundamentalism in the management of Chinese institutions (Qiang 95). The changes experienced can however be linked to two features of orthodoxy i.e. reformation of economic institutions and use of the reformed institutions in the achievement of industrialization goals.
Dependence of the country on industrialization has led to the sustainable economic growth in spite of world catastrophes. The economic growth of China, which surpasses conventional explanation, has made other countries desire to achieve the same level of growth, a prospect difficult to achieve without engagement of several factors. The Chinese people however achieved this through commitment and formation of an environment that is peaceful towards innovation (Chow 81).
With the emergence of Chinese economic strength and consideration of China as the second largest economy after the US, there have been economic ties developed between China and the US. Beginning with the export of labor from China to the US in the earlier industrialization periods, the countries have continued to grow in trade. Currently, the US offers the biggest export market for Chinese products. Similarly, China offers the biggest export market for the US. The trade relationship between the two countries is however unstable due to the unfriendly trade policies by the US (Nolan 49). This has driven the US president to recommend the formulation of more fair trade terms.
Chow, Gregory C. China’s Economic Transformation. Malden, Mass: Blackwell Publishers, 2007. Print.
Garnaut, Ross, and Ligang Song. Turning Point in China’s Economic Development. Canberra, ACT: ANU E Press and Asia Pacific Press, 2006. Print.
Nolan, Peter. Transforming China: Globalization, Transition and Development. London: Anthem Press, 2003. Print.
Qiang, Christine Z.-W. China’s Information Revolution: Managing the Economic and Social Transformation. Washington, D.C: World Bank, 2007. Print.
Wang, Yanlai. China’s Economic Development and Democratization. Aldershot, Hants [u.a.: Ashgate, 2003. Print.
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