Open up virtually any major newspaper and you'd likely to find an article about chines economy. Now this might take the form of the article about America's trade deficit with china, or maybe it's an article about how chines demand for oil is driving up prices of gasoline in United States. But if you keep reading in those articles and you get a little bit further into it, you'd likely to read a line this says something like, "China has been grown up in remarkable fast rate for the last thirty years." It makes stop and wonder; how is it the china is growing so fast? Where is the Fundamental underlying this growth and is this stainable into the future? That's gonna to be topic of our discussion today.
We give you a brief overview of what we are gonna talk about. I'm gonna begin with the review of economic reforms in china. Then gonna discuss Chinas economic growth today and try to qualify that. Well then identify policies that that counterbuted to that growth. And finally we discuss some challenges that china must meet in order to maintain this rapid economic growth.
So beginning in October 1949 with the founding of the people republic in continuing to the early part of this decade, china has been dominated by three very powerful leaders; the ten years of which of whom characterise by very different economic policy. Under Mao Zedong for example, you have this catastrophic attempts at economic self-sufficiency, often with terrible consequences. Now Mao setup a communes in industry, and also in agriculture. And then one three year period known as "The Great Leap Forward", forty million people starve to death. Now to put that perspective that's the population of California and Oregon combined. After Mao died in 1976, Deng Xiaoping led pragmatic in experimental reforms and gradually opened up the Chines economy. Jiang Zemin then over saw this spectacular trade and investment driven growth that led to the growth of costal china.
So china's economic miracle really begins with Deng Xiaoping and that’s where our story out so begin. Deng Xiaoping seized upon the four modernizations proposed by Zhou Enlai in 1975. Now Zhou Enlai was a close comrade of Mao's, yet he never had an opportunity to see his ideas brought to fruition. These modernizations led to most rapid development of an industrial of sizeable emerging economy in history. The "Four Modernizations" program targeted: Agriculture and Industry; Science, and National Defense; and in each step it sought to undo Mao's destructive program of economic self-alliances. Destructor of industry ought so underwent a profound transformation during this time. Prior to modernization program, output was dominated by monolithic state enterprise controlled by the states, under the forms however, enterprise established by local government begin to chip away at the states dominant, and later on privet form often in partnership with foreign collaborators further eroded state control.
At the same time the profile of industry trade changed radically during this time. China shifted away from heavy industry to the delight manufacturing that we associated with the chine's Production today. A rudimentary commercial banking structure was also setup during this time. In 1978 the central bank was separated from Ministry of Finance, not only separating monitory of this called policy. And four new banks were also established during this time. Each had its own portfolio for loans, one focused on agriculture for example, and another focused of construction; yet over time the lines between these areas blurred and these banks went onto compete with one another. Perhaps most famously, Deng Xiaoping setup special economic known in china. The ideas hear was to use an incentive to follow foreign direct investment into manufacturing for export. This would help to facilitate china inauguration into global trade fellows. Why...