China’s Development Challenges written by Richard Schiere is discuss the China’s transition from a poor state driven economy country, overcome the transitional challenges and developmental challenges. China’s main factor of social tension during the transition since 1978 is vulnerability to poverty. This book also mentioned that China needs support by public sector reforms to transform from am export oriented development strategy to a domestic consumer demand-driven development strategy. This will help household less vulnerable to macroeconomics shocks.
The vulnerable to poverty exist because China implements many policies that contributed to high growth rates and significant poverty reduction to overcome the transition and development challenges. The factor that help China success to reform is role of policy experimentation. The policies were tested and apply at local level, after it successful, then will implement at national level. The policy experimentation that success are the de-collectivization of the rural commune system, the establishment of Export Processing Zones in the coastal region of China, expansion of social security, and participating decision making process. But there were some negative effect of transition in China on macroeconomic and household vulnerability.
In import side, the transition makes the import vulnerable to energy insecurity and large fluctuations of commodity prices. So, China maintains and emphasized the relationship with some resources rich countries to decrease the risks. ‘Beijing consensus’ is China development policy that means the model of increase when the growth of the labor intensive manufacturing sector increases. This situation causes the additional exposure to international economic styles. Besides that, compare to implement social security programs, central government more willing to provide public services provision. This is contradictory to the fiscal decentralized nature of the state in China.
Please join StudyMode to read the full document