The Chinese Economic Reform and China’s Economic Growth
Various economists have estimated that in China’s economic race, they would surpass the U.S. in the 2020s. Even if they do surpass the economy of the U.S. the relationship between the two countries are still extremely important. In this paper we will start from China’s economic reform and the rise of China’s economy. We will also looks at its effects on the global environment plus the various predictions for the future of China, ranging from an economic collapse to that of a new superpower.
In the late 1970s, specifically 1978, after years of having a centrally planned economy where all companies are owned by the state, the government of China (under the leadership of Deng Xiao Ping) established a major economic reform program whose goal was to generate a surplus to finance the modernization of the Chinese economy. With just over three decades following the economic reforms, China has shown remarkable economic success. China has become the world’s second largest economy and is the world’s fastest growing major economy. China is also the second largest trading nation, largest exporter, and second largest importer of goods in the world. There were several factors behind the rise of China. The economic reform process was based on the works of various economists and theorists but to simplify we will analyze the reforms using three distinct time frames. It began with the promotion of the rural economy (late 1970s – early 1980s) then adopted an open door policy by establishing special economic zones (late 1980s – early 1990s). These economic zones were in short an export processing station that was open to the rest of the world. Lastly, in the late 1990s, focus was put on dealing with insolvency in the banking system. The objective was to transform major banks into internationally competitive commercial banks. China’s reform in the banking and financial sectors lasted until the early 2000s. China’s impressive economic growth rate also means there will
In the late 1970s, specifically 1978, after years of having a centrally planned economy where all companies are owned by the state, the government of China (under the leadership of Deng Xiao Ping) established a major economic reform program whose goal was to generate a surplus to finance the modernization of the Chinese economy. With just over three decades following the economic reforms, China has shown remarkable economic success. China has become the world’s second largest economy and is the world’s fastest growing major economy. China is also the second largest trading nation, largest exporter, and second largest importer of goods in the world. There were several factors behind the rise of China. The economic reform process was based on the works of various economists and theorists but to simplify we will analyze the reforms using three distinct time frames. It began with the promotion of the rural economy (late 1970s – early 1980s) then adopted an open door policy by establishing special economic zones (late 1980s – early 1990s). These economic zones were in short an export processing station that was open to the rest of the world. Lastly, in the late 1990s, focus was put on dealing with insolvency in the banking system. The objective was to transform major banks into internationally competitive commercial banks. China’s reform in the banking and financial sectors lasted until the early 2000s. China’s impressive economic growth rate also means there will