China’s Overwhelming Economic Growth

If China’s economy grows as fast for the next 20 years as it has for the past 14, it will be the biggest economy on earth: I feel that China’s drastic improvements over the last 14 years are overwhelming, with their Real GNP growing at a rate of 9% a year, which means by, 1994, China’s economy will match the performance of countries like Japan and Taiwan.

China’s standard of living has also increased, and the number of people who were considered absolutely poor decreased approximately 63%.I feel with the vast amount of people living in China, and the economic activity booming like it is, China’s exports will continue to grow, as well as the standard of living. This will create more revenue, and more capital for them to produce even more goods and become even larger, prospering as one of the biggest economies on the earth.I also feel that China should try to overcome its corrupt system and steadily move Competition has been the key to China’s success: I believe that competition has been the key to China’s success. When Mr. Deng opened the free market, it brought the first signs of the farmers becoming more rich since the 1950s.

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His political genius allowed the farmers to become rich. He also introduced the “open-door policy” which isproving to be very beneficial, as they follow in the footsteps of theirstrong rich neighbours. Mr. Perkins believed four conditions must be metfor a market system to work well in reforming centrally planned economy. Ibelieve if China continues to improve its productivity, and the number ofmonopolies decrease as studies show, China will move into a capitalistfront only to prosper. An Inflationary crisis within two years will testThe 14th Communist Party Congress, set the official seal on the fourthwave of economic reform.

Market Splintering: l feel that China shouldallow labour to become freer, because this will allow workers to be bettersuited towards their jobs, and therefor they workers will be moreeffective. Infrastructure: l believe that China has to build a railwaysystem, so it will not have the highest utilisation rates for freighttraffic. l also believe that China should give incentives for students toenter higher education. Government Finance: l think that the governmentshould stop making up for losses of state-owned firms, and stop payingsubsidies to these firms and consumers, hence the budget gap would be moreWhy privatisation may not be needed:Privatisation in many cases may not be needed because the governmentsupports many businesses and purchases their products.

If the company’s areopen to the market, many jobs will be lost. If foreign ownership buys itup, many jobs will also be lost, as well as many profits and products.State owned firms are not ready for the market, because they are geared forthe bureaucrats and not customers. They are more concerned with thewelfare of the employees rather than efficiency. In the past, communismled to low productive workers, because the more profits they made, weretaken from government.

Now things have changed, the more the retainedearnings, the more the employees receive in bonuses, and that will makeA bracing wind is blowing through the open door:China follows the policies of its East Asian neighbours on foreigntrade and investment. In 1978 China had an isolated economy, with aminimal share of world trade, commodities, especially oil which was China’smain export. It has now blossomed into a $300 billion trade by 1995.Exports has five-fold.

China will also receive a lot of foreign investmentfrom countries, especially japan, which will hit poor parts of China.China will also be joining GATT soon, and have reached an market-openingagreement with the US in October. I believe that China should allow asmuch foreign investment as possible because it has helped other countriessurrounding them, and may help them.The Communist Party has nowhere to go but downl partly disagree with this statement, l feel that once a country likeChina has accomplished itself economically like it has (strong andprosperous future), it will take a lot to bring the party down even thoughthere might be some good reasons to.

Also it may be difficult to go down,because China is still three quarters rural, and the people in the countrystill prefer communism because of the small favours received. Anotherfactor why the party won’t go down is because if it goes, it will bereplaced by the army, the secret police or warlords. Even though thecommunist party has not functioned like it was supposed to, it will not godown. The communist party has been operating very much like capitalist,because of the capitalist society which has been introduced over the lastseveral years. The party has a large role to play in China’s transition toChina is on its way. the West should prepareChina’s interests lay in foreign investment, trade and economicreform.

China’s main driving force was competition, and they proved thatprivatisation and settling the matter of ownership are not so critical inthe early stages of reform. In the years ahead, China must choose betweenkeeping the communist party or kepping the stunning economic growth. Ifthey continue to grow at the rate China grows, and keep improving theireconomy, and join the likes of Japan, they can combine forces in allaspects against the west, military wise and economically wise. if China’seconomy grows as fast for the next twenty years like it has for the pastfourteen, it will be the biggest economy on earth.

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China’s Overwhelming Economic Growth. (2018, Jun 17). Retrieved from