From an economic perspective, China is considered a global superpower and is seen to be the most legitimate threat to unseat the United States as the biggest economy in the world. While the growth wasn’t immediate, China took its time to establish a strong local economy and capitalized heavily on its many competitive advantages before opting to enter the world stage as a key player in international trade. Today, China provides products spanning all types of markets from electronics to coconut oil for face and is very successful in doing so.
Take a tour of the Chinese economy’s path to growth by reading the highlights and bullet points below.
- The growth of the Chinese economy had its roots in the late 1970s when the leader Den Xiaoping initiated dramatic changes in the way the economy was run. The changes were highlighted by the introduction of some capitalistic concepts to the local economy generating very fast results at the grassroots level. Focus was given on the pursuit of personal income and new management systems were introduced to boost productivity. The reforms swept through various markets including agricultural, industrial, financial, fiscal and banking systems to kickstart the reforms.
- The second phase of growth occurred in the early 1990s when China began seeing major growth to its economy. During this time, China made bigger strides in international trade heavily marketing products from natural hair products to plastic toys. China regularly posted 9.5% growth in its economy although challenges remained in order to keep inflation low. At this time, more focus on banking and state policies became more urgent priorities.
- China truly began to realize the benefits of its reform programs in the early 2000s when proposed amendments to the constitution helped speed up growth. Growth regularly averaged at 10% orhigher and trade became a major engine of the country’s growth. In 2010, China raked in $2.97 trillion in trade revenue making it the second largest nation in terms of trade profits, second only to the US. Around this period, China became the third largest economy in the world, fueling job creation from accident lawyer professions to factory work.
- From 2010 onwards, China enjoyed modest progress even when the rest of the world was in recession. While growth has slowed down to the 5% level as other countries cut back on expenses thereby moderating global trade, China remained committed to exporting as evidenced by the presence of many global brands manufacturing their products from China. Just about anything can be sourced out from China nowadays, from the ubiquitous sample website to the glitzy iPhone 5. The Chinese economy has truly arrived.
China continues to hope for bigger things in its future but challenges remain before China can fully exploit its advantages. Social and political stability remain major concerns owing to the government’s drive to get more land for industrial growth which leads to people being forced out of their homes. China’s issues in the Pacific are also well documented as it quibbles with Japan, Vietnam and the Philippines over the control of islands in South China Sea.
Still, the future of the Chinese economy remains bright. It remains to be seen if China can ultimately unseat the United States as the biggest economy in the world. Until then, the world will continue to watch China closely and will keep asking: what will China do next?