| Economic Growth in China Essay
The Growing Power of the People’s Republic of China
China is a country located in East Asia. This country is considered one of the worlds oldest continuous civilizations with approximately four thousand years of history. The countrys rapid growth is largely attributed to a change in economic policies in the 1950s which transformed the country into a technology based economy. China is actually the second largest economy in the world after the U.S and the worlds fastest growing major economy. The countrys population stands at 1,340,610,000 (Phang 20). This large population provides a good market for the countrys industrial products. The large population also ensures availability of manpower for the countrys military as well as labor for the industrial sector. Out of this population, 26% is urban. The presence of large rivers and arable land ensures adequate agricultural products to feed the high population. Principal rivers in the country include Yangtze, Huang He (yellow river), Amur, Pearl, and Mekong (Phang 22).
The population of china is largely made of the Han ethnic group. The countrys large size has ensured availability of large agricultural fields. The climate is quite conducive for agricultural activities (Phang 25). The country is actually the worlds largest producer of rice. Other agricultural products produced in large quantities in the country are: cotton, wheat, maize, tobacco, soybeans, and peanuts. The country is also rich in mineral resources. Its renowned for the production of coal, crude oil, antimony, tungsten and other mineral resources. This ensures availability of foreign income to develop the countrys infrastructure (Henley 100).
The countrys decision to loosen restrictions on private businesses ensured their growth hence contributing to the rapid economic growth of the country. Opening the door for foreign investment ensured the creation of numerous factories and other production centers hence the creation of jobs (Henley 105). Foreign investment also facilitated technology transfers and increased exports thereby contributing to economic growth. A research carried out recently by IMF concluded that increased worker efficiency has played a big role in the growth of the country. The report compiled by the researchers indicate that this efficiency led to high productivity gains which accounted for nearly 42% of the countrys growth in the 1990s (Henley 106).
The availability of cheap labor for the countrys industrial sector has ensured low production cost hence making products from the country very competitive in the international market (Henley 111). This availability is largely because of the high population in the country. As a result of this, manufactured products constitute a very large share of the countrys trade. Appreciation of the Yuan has also played a very big role in the development of the country. This appreciation has caused very favorable exchange rate against the dollar. China pegs its currency against the dollar but this is expected to change owing to the improvement of the countrys economy and the weakening of the dollar. The country is expected to do away with the peg system after the G- 20 summit (Henley 112). This step is expected to be accompanied by a further increase in the value of the currency. This increase is expected to spur more economic growth in the country. Conversely, this appreciation is expected to affect negatively the economies of Chinese neighbors such as south Korea which happens to be Chinas major trade partner (Henley 112).
The country continues to receive aid from other countries despite its blossoming economy. for instance, the Australian government through the Australian Agency for International Development (AusAID) has provided support for china for the last thirty years. This body supports many development projects in china and also provides the required expertise (Chen 55). This helps china make up for deficiencies hence ensuring adequate resources for development. The country has formed a program called China country program strategy. This is a program that focuses on supporting the countrys development as well as reform agenda via targeted policy management, high level capacity building as well as partnerships in the economic key sectors. Alliances have therefore played a key role in helping the country realize its development goals (Chen 56).
The countrys tourism sector has also played an important role in the countrys development. This sector is one of the fastest growing industries in the countrys national economy. Revenue from the industry reached about USD 67.3 billion in 2002,contributing about 5.44% of the GDP. In 2003, the number of tourists reached about 91.66 million. This placed the country among the worlds top five countries as far as revenue from this industry is concerned (Chen 58).
Chinas high regard for science and technology has seen a high priority awarded to modernization of the same. The countrys leaders have actually been described by many scholars as technocrats. There is a very good political will to advance the field. This has ensured a state of the art production systems in the industries thereby ensuring efficiency (Chen 59).
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