Economics Chinese Growth Essay

Submitted By mrbabalaba1
Words: 615
Pages: 3
Open Document
1. Why did Wen Jiaboa adopt a new development strategy? Given this change, what are the problems associated with China's rapid growth? Wen Jiaboa adopted a new development strategy because with the recent financial crisis, China’s export-led growth model showed its vulnerability. China’s exports decreased in the first quarter of 2009 by 25%, which was the first time since 1978 to have no growth. Chinese savings was 51% while consumption was 36%. These issues along with the lack of proper health care and pensions showed that the system would not be sustainable. Chinese growth depended on foreign markets to export to since their own market was not consuming. This vulnerability would make Wen Jiaboa adopt new policies to encourage domestic demand and invest in new infrastructure to create balance in the 8% growth in GDP. We noted in the discussion in week one that when a country has one product that dominates the export market they open themselves up to more risk. China exports a variety of products but they just export and have not grown infrastructure or created social programs at the same pace as the last 30 years of 9% growth. The changes made by Jiaboa brought challenges from global companies who complained about the nationalistic measures that resulted in unfair trade and investment restrictions and exchange rate price fixing that hurt American companies.

2. Why is increasing the share of private consumption as a percent of GDP such a controversial issue among the Chinese leadership? China has 1.3 billion people and if they begin to increase the share of private consumption then they will have to increase the amount of raw materials they import which can become expensive, as some are limited. The increase usage in the automobile is requiring China to import 5.3 million barrels daily, which could increase in 2030 to 12 million barrels. I think the income disparity is also an issue for the change to private consumption instead of the government providing for its citizens. The article attached shared some interesting insights on the Chinese change in economy to a more sustainable model with private consumption being one area of focus. However, with increased prices, the majority of Chinese citizens cannot afford houses or other products and have to take out loans with wealthy individuals that
Show More

Related Documents: Economics Chinese Growth Essay

Globalization On The Economic Performance Of The Former Communist Economy Of China

impacted greatly on the economic performance of the former communist economy of China. Through numerous economic and political reforms introduced in 1978, the once backward nation has become the world’s fastest growing major economy and the world’s second largest economy by nominal GDP. The process that China has since undergone, growing interdependence amongst countries and increased cross-border flows of goods and services, has significantly affected its economic growth, economic development, natural…

Words 802 - Pages 4

Innovation and economics- China economy growth Essay

CHINESE ECONOMIC GROWTH Ejiroghene Ajari (01017696) Faisal Alshalan (01011564) Jianjie Zhao (00994068) Sonal Chopra (01014144) Xuezhou Wang (00969291) Yiannakis Charalambous (00980154) Economics and Strategy for Innovation Professor J. Haskel 22/10/2014 1 CHINESE ECONOMIC GROWT H Question 1 T able1. Cumulative Average Growth Rate (CAGRs)(1952-2008) Year 1952-1978 1978-2008 Year 1952 1978 2007 Y 5.1% 9.6% L 2.1% 1.7% h = H/L 1.6% 1.2% K 8.7% 9.7% T able 2. Economy Factors of China (1952…

Words 2016 - Pages 9

9789812812520 Fmatter Essay

Library of Congress Cataloging-in-Publication Data Chow, Gregory C , 1929Understanding China's economy / Gregory C. Chow. p. cm. Includes bibliographical references and indexes. ISBN 9810218419 -ISBN 9810218583 (pbk.) 1. China—Economic conditions—1976- 2. China—Economic policy-1976- I. Title. HC427.92.C4783 1994 330.95 l'05-dc20 94-19947 CIP Copyright © 1994 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not he reproduced in any form or by any…

Words 1749 - Pages 7

Poverty and Income Inequality in China Essay

Another Inquiry on the Economic Welfare and Poverty in China The trade-off between economic growth and redistribution has become one of the major notes concerning the emerging economies of post-Cold War world. Adding to this struggle the urge to integrate into the international system while keeping the balances right at home has been another macro-level concern. In conjunction such liabilities not only necessitates the examination of fiscal and structural reforms but also the international trends…

Words 1358 - Pages 6

Globalization: International Trade and China Essay

Explain what you understand by the economic notion of ‘globalization’. Using empirical evidence, describe how such globalization has affected the development of a country of your choice in the past decades. Globalization refers to a multidimensional process whereby markets, firms, productions, and financial systems are integrated on a global scale. These processes can range across a wide variety of affairs, but all point to the internationalization of everyday life (Brawley, 2009). There are four…

Words 1754 - Pages 8

Business Innovation In China

Introduction Business innovation is an essential component that plays an important role in the growth and development of a country. Innovation can be in the form of the creation of new technological practices for improving the current product line or the creation of entirely new products. The economic performance of a country is also associated with the extent of business innovation. By integrating the resources, implementing change in the policies and procedures of the country, innovation can be…

Words 2103 - Pages 9

Can The Chinese Communist Party Gain Power Essay

Keshav Sota Prof Meyerson Can the Chinese Communist Party Maintain Power over China? Winston Churchill once said that "democracy is the worst form of government, except for all the others". Leaders such as Churchill have discussed alternatives to democracy without much success. In the last millennium, most governments have accepted democracy as the ideal form of government. Leaders and commoners alike praise the way democracy allows people to share their personal interests yet still function collectively…

Words 1200 - Pages 5

The Great Big World and China Essay

and China Since its inception, the Chinese people and leaders have referred to their homelands as the ‘Middle Kingdom.’ This name reflects the long-held belief that China is the center of the world. For thousands of years, Chinese foreign relations consisted of subjugating countries that were unable to stand up to the powerful Chinese military and walling themselves off from empires which threatened the control the various regimes had over the economic and cultural lives of the people of the…

Words 4455 - Pages 18

Economics Essay

playing a large global role for all economies ., many societal and economic factors and aspects such as the Chinese government and society contribute to the Chinese economy. Australia is a quick growing economy. China and Australia’s economies are both very impactful and large economies. As of 20 China and Australia’s economic systems are structured completely differently. China operates with a unique ‘socialism with Chinese characteristics’, a modified version of a planned economy while Australia…

Words 842 - Pages 4

China’s Upcoming Economic Transformation and Its Business Opportunities Essay

BUS1801 - Global Business Perspectives 01 December 2013 International Business Paper China’s Upcoming Economic Transformation and Its Business Opportunities INTRODUCTION In the world of global business the only thing constant is Change. Changes can come in many forms, some are market driven some are policies driven. Whatever the cause may be, certain changes be profoundly impactful; business leaders need to adapt and prepare their businesses to maximize profits in the future. This paper…

Words 982 - Pages 4