Major Causes of Boost up in China’s Economy

By | September 6, 2012

The currently observed growth in the Chinese economy, while relatively new in the eyes of some, is a trend that has begun since the launching of the Chinese economic reform agenda in the late 1970s. In its totality, the program is a complex and comprehensive strategy designed to overhaul the stagnating Chinese economy. The massive growth we see today is a byproduct of a long series of government actions impacting all facets of Chinese economy, from the introduction of foreign investments to the permission of the creation of small business such as dental marketing schemes and the likes.

To understand the full scale of the Chinese economic reform as well as the major reasons for its stirring success, it would help to see the situation in a broader perspective merging the potential internal explanations with the greater macro-economic scenario that has prevailed inAsiaand around in the world beginning in the mid-1990s.

Internally, scholars and economic analysts tend to think that the success of the Chinese economic reform is primarily due to the institutional reforms that were implemented as a kind of skin tightening measure. Classic examples include privatization of many government agencies coupled with a high degree of decentralization post-Mao. This allowed many leaders to implement their own ideas for spurring growth resulting in a boom of multiple economic improvement strategies that energized the country.

Others also argue that leaders were motivated to promote growth as this was seen as a primary success criterion for their leadership skills. Post-Mao, many leaders stepped up in a bid to improve their political stock and increase the likelihood of being recognized and rewarded for their efforts. Mao’s absence created a scenario akin to pressure washing were leaders who are capable suddenly had the opportunity to showcase themselves while the fleas on dogs type leaders remained stagnant for their lack of ability to showcase results.

Moreover, the dynamic change in the internal mechanics of the Chinese political and economic approach also coincided with significant changes in the global scene. Chinatook the concept of export-led growth to new levels following the model of Japanin the 1970s. China’s abundance of manpower was a definite competitive edge that allowed it to mass produce anything from Taylor guitars to computer spare parts. Coupled with the collapse of the former Soviet Bloc as a competing power in Asia,China suddenly had so much room to grow and not a lot of competitors to rival with it.

Today, we laud Chinafor supplying almost everything that we see in our homes. If there is a way for Chinato supply South Africa travel packages, you can bet the country would do such in a heartbeat. This is a real testament toChina’s ultimate goal of becoming the primary provider of anything and everything in the globalized world. Thus far, it is doing an excellent job at it and in the absence of a strong competitor, it is most likely destined to continue growing eventually fulfilling predictions that it will surpass theUS economy in a few years.

The growth of the Chinese economy is a good model for many developing countries that wish to establish their presence in the world stage. What started as a series of internal restructuring efforts paved the way for the China of today. In the same breadth, economic reforms can certainly be implemented in the correct way to yield the right results. The only question that remains is the motivation behind such actions. After all, if China did it, there is no conceivable reason that other countries cannot do it as well. In the end, only time will tell.