Essay on China Today
Number of words: 1784
The economic performance of China has been awe-inspiring over the last four decades. Approximately half a billion people were lifted from the poverty level with 10% average GDP growth. China is the second-largest economy globally, and it is the largest manufacturer and exporter of goods in the world. Even if China maintains a moderate growth rate, it is expected to be the world’s largest economy by 2030 (World Bank). China was booming and the world’s largest economy between the early 1500s and early 1800s. However, the subsequent two centuries of China were tumultuous and experienced disastrous deterioration from 1820 to 1950. Economic reforms started in 1978 (Maddison), and China again achieved the lost heights by overtaking Japan in 2010. 1997-98 may have hampered China’s economic growth, but even after a bit of setback, the continuous growth of China impresses the global economy. Many factors are responsible for the success of China’s rise; however, post-Mao economic reforms seem to be the decisive factor amongst all in the success that China has achieved today.
Mao Zedong died in 1976, and in the year 1977, Deng Xiaoping returned from the disgrace to serve the second term. The era could be regarded as China’s ‘great transformation’ and the modernization process through which China aimed to become a developed and industrialized country in the 21st century (Brødsgaard). An integral part of the modernization program includes reform in the centralized economic and political system. Some of the measures were, the decision powers were given to the production units despite their location, material incentives were enhanced to inspire economic efficiency and productivity, economic theories such as credit control, taxes, interest rates were used to substitute administrative planning methods, the government recognized the role of the market mechanism in resource allocation and distribution. The Chinese economy was a ‘dormant economic giant’; therefore, to encourage the economy, the reforms discussed earlier were implemented by encouraging the formation of private as well as rural enterprises, the foreign trade and foreign investment were liberalized, huge investments were made in the industrial production and to train the workforce. The strategy outlined by the Chinese government worked spectacularly on all fronts. These post-Mao economic reforms have fascinated many people from China as well as abroad (Onoye). In a nutshell, the success story of China is mainly due to the realistic and market-oriented reforms in the post-Mao era. The Chinese economy is so prosperous and robust that today that, two of the top ten banks in the world are Chinese, Global fortune 500 lists consist of 61 Chinese companies, second largest highway network exist in China along with three lengthiest sea bridges, six largest container ports in the world (World Bank). Various economic reform has helped to lift approximately 500 million people from poverty since 1978.
The rate of urbanization in China has increased rapidly; in 1981, it was 2,870 square miles, whereas it was 20978 square miles in 2016, almost seven times higher. The rapid urbanization in China would not have been accomplished without a massive labor force, especially from rural areas. The labor force has migrated due to the vast amount of employment opportunities. The income of rural farmers has increased remarkably due to increased employment. China has approximately 810 million urban residents, whereas it was approximately 170 million in 1978, a drastic increase. The rural population was highest, 860 million in 1995, although it has decreased significantly since 2000 due to increased urbanization (Zhiqiang). Urbanization has also played an essential role in China’s economic growth; for example, in 1978, urban GDP was approximately 36%, whereas today, it is 80% of China’s GDP. Although there is another side to the story of rapid urbanization, the Chinese government implemented the ‘Hukou’ system for permanent house registration and strictly followed the migration. Therefore, government authority seems biased towards the urban population than that of the rural population. However, the rapid speed of urbanization has helped to shape civil society in China (Zhiqiang).
The current president of the Communist Party of China (CPC), President Xi Jinping, promised to rejuvenate and prosper the Chinese nation along with the continuous economic reform and the happiness through “China Dream” (Feng). The present government advocated the requirement of further reforms and openness by emphasizing, “Socialist way of Chinese Characteristics” (Feng), in which the authority lies in the party leadership. A set of values was announced to comprehend the ‘Chinese Dream,’ such as friendship, integrity, dedication, patriotism, the rule of law, justice, equality, freedom, harmony, civility, democracy, prosperity. A new ‘socialist system has been formulated along with other new institutions apart from existing institutions such as ‘Communist Part of China,’ and other multi-party cooperation, and system of people’s congresses which is regarded as ‘system of democratic centralism.’ The outlook of China’s dream is more open-minded than ever before, which seems to be a new vision for the future of China. The new party leadership directs China towards better economic freedom and the rule of law for the state government. However, many challenges lie in leadership due to new values and institutions being subject to leadership’s determination, competence, and perseverance. China’s uncertainty to maintain high economic growth is due to a series of bottleneck problems that might end up as a ‘middle-income trap.’ However, it does not mean that economy of China will not grow; this is because of an increasing number of entrepreneurs and the low level of ‘per capita income’ (Feng).
Many countries are astonished due to China’s success since 1978; however, the question is not what China did to get the success? However, it is; how did China achieve it? China adopted a “crossing the river by feeling stones” policy, which inspired local government institutions to start different pilot experiments within the comprehensive framework of reform policies. Initially, China was able to determine the practical institutions for every stage of reform by providing incentives for the local government institutions, introducing gradual market-oriented reforms, and experimentation. ‘Dual-track’ is one of the critical features of these reforms, for example, motivating and liberalizing the enhancement of the private and public sector while supporting the government firms in old and significant sectors (Lin). One of the themes is that the economy was allowed to “grow out of the plan” (Lin) until the administered material planning system wastage. This has helped the Chinese authority explore decentralized and continuously through which institutional measures were evolved as entirely new and different challenges required for the determination. Undoubtedly, many local institutions frequently implemented their unique methodology to suit the specifications of their situations and localities.
It is assumed that Moscow under the Soviet Union brainwashed Mao Zedong. All his policies were Eurocentric, and Mao failed to understand the nerve of China; therefore, after achieving a military victory against the republican, Mao wanted to use the Soviet mold to recast post-war China. Mao’s understanding of the Chinese economy was pathetic, and therefore society had caused public resistance and political tensions at all levels. From the 1950s to 1976 until his death, most of his time and energy was spent suppressing the resistance and tensions at the cost of recovery of the Chinese economy and prosperity. China had nothing to lose since Mao had caused immense damage to China’s economic growth that economy had touched rock bottom. Maoism had caused so much damage to China as a country. During the Mao regime, Deng and his counterparts were utterly aware of Japan and Asian tigers (Hong Kong, Singapore, South Korea, Taiwan). According to a report presented to the state by Deng, “The technological gap between Japan and China was insignificant in the 1950s. However, China isolated itself during next 20 years and did not acquire global competitiveness, and during this period Japan became world economic power” (Fengming, and Tanhua). Therefore, it was not a tough choice for Deng Xiaoping to consider an economic model of the Asian Tigers. It was Deng’s vision that helped China get out of Maoist gridlock (Deng). However, the reforms presented by Deng had a significant gap in handling foreign policies and capitalism in the movement of Chinese communists. In 1980, Deng announced that ‘modernization is the key to China’s solutions, internal and external.’ He aimed to achieve $1000 GDP per head by the end of the 20th century. The reforms in the Chinese economy were not problem-free as China was facing domestic burdens, such as bad debts due to the continuously declining state-owned sector; workers’ rights were often ignored, which had fiery social consequences. The economic growth of the rural area was slowed down, and China was regarded as one of the most corrupt countries in the world and consistently ranked amongst the top 20 countries. The actual socio-economic changes were progressed when the reform suggested by Deng came from rural China. These reforms then matched with the urban sector from the top-down method (Deng).
The success story and the transformation of China’s economy from zero to success are astonishing and motivate many emerging and developed economies in the world today. The Communist Party of China had a will to accept and implement the necessity of the reform to acquire economic progress by compromising philosophical principles. Deng Xiaoping and their team had put together many reforms to steer the economy of China. The success is due to the suggested reforms, but its systematic adoption played a significant role in its success. Various economic reforms have resulted in lifting approximately 500 million Chinese from the poverty level. However, migration control through the ‘Hukou’ system is causing discrimination between the urban and rural people in terms of income level.
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