China’s New Political Economy
China is one of the best economies across the globe. However attaining such a status is not an easy task yet China has managed to overcome all obstacles to ensure that the country remains among the leaders in the global economy currently, many developing countries have strengthened their economic growth and China is a perfect example. Immediately after opening various reforms, Chinese economy continued to grow exponentially for 30 years, and currently, the country’s economy is ranked as the third best economy in the global rankings. The fundamental reason for this study is to critically evaluate and identify the critical political, economic, social and innovative factors that have favored China to improve its economy at a drastic rate. In addition to that, the report will also suggest some techniques that China could make use to ensure that they have a continuous economic growth.
China’s economy has grown tremendously since its reform and opening policy in 1978. Yueh affirms that “From the year 1978 to 2007, the mean development rate of China’s economy per capita GDP was approximately 8.6% annually” (Yueh, 2012). And until now it has not shown any signs of reducing its pace. In addition to that, from the year 2000 to 2007, the mean growth rate and development were estimated at 9.2% annually, and this growth in China’s GDP accounted for 35% of the world’s economic growth (Yueh, 2012). Through its immense economic growth and development, China has been able to eliminate poverty levels, and this has empowered most of its citizens even though the nation has a high population. According to, (Inkster, 2012) China’s first stage of economic development reforms mainly concentrated on its rural areas from the year 1978 to 1984. This ensured that the country’s economic development was even and not only centralized along essential cities and towns. On the other hand, non-farm businesses in rural areas were allowed to establish by the existing government, through encouraging household savings.
As a result, businesses began to manufacture simple industrial products which could not be supplied by other nationalized companies. This rapid production enhanced agriculture and created employment for people leaving in rural areas. Secondly, the process of the urban economic development reforms was a significant boost between the years 1985 to 1992, primarily for national companies, which were granted a more considerable operational autonomy (Epstein, 2012). The widespread ownership agent prohibited the efficiency of the private ventures, and the ownership businesses by other participants and this created a loophole for high competition from the local and oversee markets. The third phase of the Chinese economic growth took place as from the year 1993, which was encouraged by Deng Xiaoping’s public speech and the principal objective was to support more radical moves aimed at improving the country’s economy. Through the improvements analysis, some administrative supervision canceled a lot of constraints of economic development and growth, for instance, tax system, rural-urban migration, international trade and foreign investment and the banking system. The reforms created a market mechanism and different incentives that were not available in the socialist economy. In addition to that, the Government also absorbed the nation’s wealth of various resources and available labor into the growing economy, leading to an increase in productive activities and businesses, while also promoting economic development. Through a combination of these factors, China’s economy has continued to blossom over the years. Research Objective
1. To evaluate the critical economic factors contributing to Chinas economic growth and development.
2. To outline the political elements that enabled China’s economy to grow at a faster rate.
3. To establish technological factors contributing to Chinas economic growth and development.
4. To draft different recommendations or suggestions that can be implemented by China to ensure that it continues to sustain its economy.
1. H1: China’s rapid economic growth is as a result of a combination of political, economic and technological factors.
2. H2: Chinas ties and relations with other countries play a significant role in its economic growth and development
The data collection will be collected using secondary sources like journals and books having different accounts of how China’s economy has been performing over the years. A holistic research design will be used to ensure that any latest trends in China’s economy are captured to provide that our data is accurate and up to date. The qualitative e-research framework will offer a way for us to think holistically concerning different disciplines that can be used in our study (Salmons, 2015).
For instance, the purpose of our study is to outline China’s new political economy and determine the implications of this new economy on the Chinese people. To get different responses from people requires another different data approach especially if the information is to be collected face to face. For a face-to-face data, collection interviews will be conducted. The respondents will be interviewed in specialized rooms where any information obtained cannot be subjected to any form of scrutiny or discrimination. However, for distant respondents, questionnaires will be sent via their email with a list of questions to answer. In the survey, the purpose of the study will be stated to ensure that a respondent knows the objective of the study. However, the data collected will have to meet the set research questions before it can be used for our research.
1. Was the analysis written within the last ten years?
2. In case of websites or articles, have they passed through an editor? (websites of organizations are a clear indication of sites which pass through editors)
3. Does the journal relate to China’s economy
4. Is the source accurate and verifiable?
5. Does the source show how China has been growing economically over the years?
6. Does the journal show the impact of Chinas economy globally and locally?
After meeting the research questions, approximately ten scholarly sources will be used for our study. However, for unique cases where interviews will be used the data will be appropriately analyzed to evaluate if there is any consistency or disparities with the data collected through the secondary sources.
The research will use a theoretical framework, whereby different theories concerning the Chinese political economy will be evaluated to determine the most appropriate to apply for the study. However, the arguments selected need to be rational and logical to ensure that they make sense and have a back-up for another data collection source to ensure that they are accurate and reliable. In addition to that, there will be different ethical considerations applied to our data collection to provide a successful data collection plan. Respondent’s confidentiality will be our key priority to ensure that any respondent feels comfortable giving any form of data. As a result, respondents will not be allowed to write their names on the questionnaires to ensure that they remain anonymous. Davies and Hughes confirm that “anonymity of respondents” (Davis & Hughes, 20142) is a crucial part of any data collection plan.
Factors that Led to the Development of Chinas New Political Economy
I believe that the Chinese political economy did not grow just because of one single factor. The growth involved a combination of different economic factors, political factors, and technological factors. I, therefore, believe that through a complete PESTLE analysis of China we will be able to determine the process that led to the growth of Chinas economy and the driving force behind its sustainability over the years.
1. Economic factors
I heartily agree that the countries social- economic structure played a considerable role in the success of the nation’s economy. This is because the Chinese population is among the largest globally. Therefore, the people played a huge role towards ensuring that the country’s economy continued to flourish. A Social-economic structure refers to the quantities proportion, arrangement relevance, and mutual adaptability when different economic sectors are used, industrial businesses and various aspects of social reproduction in the whole economy from one system which acts as a single entity (Rasgotra, 2011). The economies social-economic structure involves an industrial structure, with a well-elaborated distribution system, a well-planned exchange program, consumer consumption analysis and finally a technical structure which looks at all the logistics involved. The most significant is the industrial structure which plays a significant role in a country’s economy. Mainly because the development rate is not considered as a problem, but a crucial point in that economic development and growth should be able to sustain and include different aspects as outlined by, (Shealy & Dorian, 2010). China’s government insists that the best path to industrialization is through ensuring that Chinas own characteristics and resources are utilized and exhausted. In addition to that, the government tries to expand domestic demand for its products, as per the consumer demand to make sure that they have a steady market locally. This is to promote its economic growth and development, which mainly depends on the investment and exports from different products as stated by, (Rauch & Trindade 2002).
Additionally, China’s government made a declaration of primary financial strategies, for instance, vitality sparing, renewal design, and recent change, innovative milestones, the territorial financial enhancement design, obsolete end, and ensuring abundance limit to the countries resources. These arrangements have improved China’s economy and caused a drastic growth. However, there remains a vital need for financial alteration to ensure that the country’s economic development advancement is ever developing from local businesses to internationally recognized companies. Due to the substantial household request growth, China’s economy has adapted to global budgetary emergency and trends to ensure that the country stays ahead of the rest. Still, it is essential to provide a steady and quick financial improvement. However, there are some vital interests in the long-run which require consistent enhancements like infrastructure (Ng and Schweitzer, 2012). The final concern is to improve urbanization to ensure that the economy has a right environment to thrive. Chinese monetary improvements have potential, but it is upon the auxiliary financial alteration and the residents to ensure that the entire economy grows. Therefore, the move by the Chinese government to focus more on its social aspects to improve the country’s economy was a good move because it has ensured that the state continues to grow economically.
Economic Development Level
I believe that through a change in the Chinese GDP and overall national wage increase will empower its local market, which additionally advances the improvement of its international industry. Along these lines, agriculturist can cordially strategize on the economic advancement of the globe. In the year 2011, the standard yearly GDP growth was approximately 7%, and new business people achieved 450 million (Wang-Kaeding, H. (2016). The unemployment in 2011 was controlled to about 5% (Wang-Kaeding, H. (2016)). On the other hand, the countries value level was kept stable. However, Chinas global income and use have a tendency to be adjusted now and then through the introduction of new products in the market that competes favorably. Economic System
It is arguably true that the first arrangement of China is the most center of inspiration for China’s rapid financial improvement and growth. However, there are three defining moments for this change. First and foremost, the prior charge economy was transformed into a communist market economy. In addition to that, China has over the years turned from a shut and semi-shut community to an open one. Thirdly, people living conditions have been upgraded. Additionally, the financial plans of China attempted to develop a unique market instrument from the standard framework, disregarding the family contract obligation and requirement framework in rural areas and transforming the state-claimed duties in the big cities (Rauch and Trindade 2002).
In addition to that, I believe that two unique large-scale control techniques of financial policies in China made significant changes to the country’s economy, and the goal of the arrangement was to improve the steady and fast-growing economy. However, executing the proactive financial plan and expanding the financial essay writer expenditure of the government empowered the entire social business. These were used to invigorate the commercial growth within China. The Current Monetary Circumstance
I believe that the first current financial circumstance of China created the descending pattern for industrial growth. However, the Chinese growth rate in the retail market offers social purchasers quality products and purchaser certainty which builds consumer loyalty. However, most of China’s imports stayed at low levels over the years as a result of the government tried to focus more on a local economy. But as time elapsed, it became evident that outer contracting economies favor financial growth.
2. Political Factors
Effect of China’s National Arrangement
I believe that in the particular social structure of China, political issues dependably assume the central part of the economy. This is because financial improvement will unavoidably require the difference in the political framework. In addition to that, legislative matters can’t advance the commercial development of the country. However, protection from economic change can be determined by the Chinese government. Klossek and Nippa affirm that “to ensure political dependability and solidarity for a duration of time, political security and stability is very important” (Klossek and Nippa, 2012). The constant legislative issues are also an essential condition for financial enhancement which improves the economy. China has transformed from its previous to a more advertised economy where the country ensures that they use their resources to ensure that other nations are aware of their variety of products. In addition to that, a good market economy ensured that the Chinese business economy continued to blossom over the years. The countries market economy also played a critical role in the countries social structure, belief and cultural systems of the people. These improvements of financial, social and social changes influenced China’s political environment. The entire Chinese political situation is a crucial issue in the country’s economy because most policies and regulations are implemented through the government.
China Trade Agreement with Different Nations
I also agree that Chinese exchange concurrences with different countries and its upgrades on the structure of its outside exchange ensure that the country remains secure regarding international trade. From the import structure, the import items for residential development mirrors the use of finances (Noesselt and Soliz-Landivar, 2013). This is a clear indication that fostering good a relationship with foreign countries ensures that a state increases its revenues through its export and import markets. In the meantime, good relationships within China have also helped urban communities, especially along the seaside to trade with other cities, thus improving the country’s economy. The trade agreements also act as a sense of security and foster good relationships between the nations.
3. Technological Factors
I believe that China’s advance technological improvements over the years also play a significant role in its economic growth. The improved functional level of the countries technology accelerated customary ventures, promoted more innovations and discoveries, and improved the country’s economic and administration abilities. On the other hand, improved technology ensured that China can compete favorably with other economies without lagging behind. Better technology also ensured that the country can have better research centers to analyze other potential markets leading to economic growth. It is important to note that technology changes every now and then, it is therefore very important to ensure that an organization or company keeps changing with the changes in technology to ensure that it can compete favorably with other competitors and developed countries.
The Proposals to Manage the Financial Development of China
Even though, China is currently the third best economy globally. I believe the nations still have a lot of improvements to pursue to ensure that it becomes the best economy globally. I strongly think that through managing its financial development, China needs to adopt various measures to ensure that its economy continues to grow. Venture development and innovation change are two principle suggestions for China. Some suggestions are improvements that can take part within a short period of time while others require a gradual change for complete accomplishment.
Venture or Business Development
Venture development is the essential factor to maintain Chinese financial growth and improvement. Speculation assumes a significant part of Chinese fast development economy for the past 27 years. The move can ensure commercial development for an extended period. Currently, the Chinese economy is in a fast development array, so there is need to invest enormously in the economy. The country’s capital aggregation needs to ensure that it accomplishes the technological advancements which favor economic growth; It is a split decision that banks on more speculations, and higher economy improvements (Ray and Sarmiento, 2015). Typically, the Chinese economy has 20% speculation is on lodging facilities, and approximately 30% of the business ventures are based on foundation speculation (Ray and Sarmiento, 2015). Therefore, it means that half of the current Chinese experiments are immoderate, as a requirement of short and long-term financial developments (Maung, 2011). The sparing rate of China h moderates over the years have shown a development slant when all is said in done. It is imperative to note that, whether a business is a small-scale or large-scale it leads to a source of income for citizens and raises their living standards and this, in turn, improves their economy.
Technological change is among the critical factor that ensures the development of China’s economy. The financial hypothesis demonstrates that technological changes are among the “reasonable motor” for the economic growth and development of the Chinese economy (Innovation, 2010). In spite the fact that China is among the most remarkable commercial economies and has a better exchange power on earth, there is still an incredible void with other developed nations on the level of technology in use. Currently, China performs duplicates other countries purchases to fill the technological void and milestones of other countries as affirmed by, (Wang-Kaeding, H. (2016). This is a limiting factor of essay writers China economic growth into other different nations and horizons. The best way to handle such cases is through investing in learning institutions with advanced technologies. Through this move, the government can ensure that scholars and students are kept up to date with the current techniques to ensure that they can compete effectively with other economies across the globe. Improving technology can at first seem expensive because of installation of the required hardware, but in the long-run, the investment is always lucrative because an organization and economy stand a chance to reduce its production and operational costs because some actions can be automated through the use of machines.
On the other hand, the Chinese government can focus on foreign outsourcing to fill the technological gap created by other countries. Foreign outsourcing refers to using resources like labor from other developed countries. This technique is way cheaper because it can happen online and the results are usually good. However, before outsourcing it is important to consider the rules and regulations outlined by the government against outsourcing or unlawfully acquiring resources of other countries. Exchange programs can also be facilitated by the government and Chinese allies to ensure that they can easily share information which will ensure that both economies gain from one another easily. Foreign outsourcing can also be regarding trying to acquire better and improved technologies from other countries to boost China’s economy. This method is cheaper and faster because no training is required.
Accounting for everything, the changes of the financial, political and technological arena have over the years empowered China to become one of the worlds “Fastest Developing Economies.” However, the three variable have to work together to ensure that the economy continues to stabilize and remain at a competitive level. However, various political changes and variations can result in a drastic deterioration of the economy, which can prompt the advancement of the financial and technological point of views. On the other hand, the changes and improvements of the country’s financial status and technical position have guaranteed the Chinese economy of a national strategy, giving the country social security. In addition to that, for the future bearing of the economy, the Chinese government needs to demand speculation and development of its technological advances as compared to other superior nations. The two are essential because they elevate China’s economy to maintain its financial progress and development. In addition to that, the Chinese government needs to ensure that they continue to support all local business and empower them to globalize as a measure to improve the living standard of its citizens and improving the country’s economy.
China also needs to focus more on its local market as a result of its high population. This will ensure that the government has enough funds and resources to venture into other international markets. However, before establishing their products and other services in other markets, it is crucial to ensure that their product falls in line with the cultural beliefs and norms of the surrounding community. Through appropriate marketing and aesthetic consideration alongside political considerations, China can ensure that other countries easily adopt its products. Creating useful ties with other countries especially with superpowers also provides that the nation gains easy to support and finance to fund its international businesses and endeavors. Focusing more on a local market is a good move by the government because it ensures that the country has a pool of market in its local environment before venturing into an international market and this increases security and reduces the risk involved in a business.
In addition to that, the Chinese can invest in higher learning facilities to ensure that they are at par with the current technological advancements. This is because one of the main issues that China has is the fact that the country is still lagging behind regarding technology. Therefore, it cannot compete with countries in Europe and America. However, the situation would have been very different if the country could easily compete technologically with other developed countries. Tapping into other economies in other remote parts of the world is also very important for China. Through this, the country stands a chance to improve its economy while at the same time expanding its horizons into other countries. The move also empowers other less developed countries to develop their economies and improve the living standards of their citizens. However, such steps require a lot of initial investment; therefore the nation should focus on a proper financial system and strategy that can to conduct appropriate market research of potential markets to make wise and proper investment decisions which will favor both countries. Creating good ties with other countries also plays a role in increasing the country’s economic growth and development.
Acemoglu, D., & Robinson, J. A. (2013). Economics versus politics: Pitfalls of policy advice. Journal of Economic Perspectives, 27(2), 173-92.Davies, M. B., & Hughes, N. (2014).Doing a successful research project: Using qualitative or quantitative methods. Palgrave Macmillan.
Epstein, W. N. (2012). Contract theory and the failures of public-private contracting. Cardozo L. Rev., 34, 2211.
Inkster, I. (2012). The Japanese industrial economy: Late development and cultural causation. Routledge.
Innovation, R. E. (2010). Energy Market Consequences.
Klossek, A., Linke, B. M., & Nippa, M. (2012). Chinese enterprises in Germany: Establishment modes and strategies to mitigate the liability of foreignness. Journal of World Business, 47(1), 35-44.
Ng, E., Lyons, S. T., & Schweitzer, L. (Eds.). (2012). Managing the new workforce: International perspectives on the millennial generation. Edward Elgar Publishing.
Noesselt, N., & Soliz-Landivar, A. (2013). China in Latin America: competition in the United States'” strategic backyard”.
Rasgotra, M. (Ed.). (2013). Science and Technology in China: Implications and Lessons for India. SAGE Publications India.
Rauch, J. E., & Trindade, V. (2002). Ethnic Chinese networks in international trade. Review of Economics and Statistics, 84(1), 116-130.
Ray, R., Gallagher, K., & Sarmiento, R. (2015). China-Latin America economic bulletin 2015 edition. Global Economic Governance Initiative, Boston University: Boston.
Salmons, J. E. (2015). Doing qualitative research online. Sage.
Shealy, M., & Dorian, J. P. (2010). Growing Chinese coal use: dramatic resource and environmental implications. Energy Policy, 38(5), 2116-2122.
Sumner, S. (2012). The case for nominal GDP targeting. Mercatus Research.
Wang-Kaeding, H. (2016). Strategic concepts and interest groups in China’s environmental foreign relations (1984-2015)(Doctoral dissertation, The London School of Economics and Political Science (LSE)).
Yueh, L. (2013). China’s growth: The making of an economic superpower. Oxford University Press.