Economics Esssay on China
...tate enterprises were run. The main changes that occurred was for the Government to move away from a commune system. They recognoised that it didn’t reward the economy and moved towards market based systems whereby the indivudal decided what he wanted. State owned enterprises were restructred to become competitive companies. Secondly China opened up special zones of free trade which were open to international trade and foreign investment. This allowed, for the first time, foreign investment and trade into chinese markets. The Government also reduced protection for many of its industries as well as corporatising many of its state owned enterprises, housing and property, making the economy more market based. Secondly it started spending on infrastructure such as railroads to tie up the whole economy into a unified unit with a financial system and market. China has also reached WTO membership and that is a key to its reforms. . In addition to this China’s system of government style would receive factors of change such as devloping laws, social security systems and environmental policies. These types of developments never happened before and is a step forward towards international convergence. In order for China to further integrate itself into the global economy it would need the benefits of a social security system and enforcable laws. Environmental policies pave the way for sustainable growth. In a sense the increased foreign trade from the reform policies and entry into the WTO will result in not only economic convergence but also cultural convergence in a sense These reforms have meant a lot of changes to China. Economic growth in China over the past decade has remained between 7% to 9%, dipping only during the crisises of SARS and Bird flu as well as the Asian Financial Crisis of 1997. This is enormous growth for an economy if you consider that 4% is a acceptable rate of economic growth. China has taken a mix of macroeconomic and microeconomic polices to control this growth, another reform introduced use of economic policies. Their economy is very export oriented as well. Secondly their economy does not seem to want to slow down in growth as their market is constantly becoming more competitive as the state enterprises are still undergoing structural change. This is also driven by one of the highest foreign investment spikes in any country. China has huge foreign direct investment in their domestic market which also drives their economic growth. A lot of international companies are investing heavily in China’s economy, with companies such as Dell, Volkswagon, Sony just to name a few. This growth comes on less then 1% economic growth of previous decades. This increase in economic growth and foreign investment has led to higher standards of living for Chinese people all round. As a direct result of economic development and growth, the general public in China have better access to health and education opportunities and longer life spans. Chinas path breaking intiatives that begun over two decades ago has led China into near double digit growth and in doing so lifting millions of people out of the poverty line. In the past 20 years, the standard of...