StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

The Slowdown of Economic Development in China - Essay Example

Cite this document
Summary
Till now China has been able to grow without much slowdown or revolt. But the fact of how long can China continue on its path which according to history is not very encouraging. This essay will take a look at the slowdown of China and the causes of such slowdown…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94% of users find it useful
The Slowdown of Economic Development in China
Read Text Preview

Extract of sample "The Slowdown of Economic Development in China"

Download file to see previous pages

China for the past decade has seen a specular rise in economic growth. But it has faced many crises like democratic economic bubbles, astronomical debt, and overspending. It is a classic case of history repeating itself. What rises comes down and eventually levels out as the countries progress from crafts, agriculture to manufacturing and finally to service and knowledge economy. As a result, the countryside empties out and it no longer serves as the source of cheap labor. With a rise in fixed investment, the marginal return decline and thus each unit of capital generates less output than the previous ones.

This is known as the law of diminishing marginal returns. During the Cultural Revolution in China, the growth dived down from as high as of 19% to below zero. Recent Chinese history reflects the role of the exogenous shocks which is far worse as compared to those of cyclical downturn. Such domestic turmoil is a severe attack on growth. Due to the Cultural Revolution, the growth declined by eight, followed by seven percentage points. The same case happened during the Tiananmen Square massacre, where the growth dropped to 2.

5 percent for two consecutive years (Joffe 1). The two revolutions is a fitting example that the more the state tries to grip, the more vulnerable the economy is to political shocks. Hence the Chinese authorities look at every civic disturbance from the point of view of Tiananmen revolt. They fear that their days are numbered. They have seen that the communist party collapsed overnight in the same year which saw protest at Tiananmen Square. Today everyone may be mesmerized by the awesome growth of China.

But they cannot defy their verdict of economic history. No country has escaped from this history. The Western intellectuals have concluded that power may breed growth initially, but in the long run, it fails. The same thing is revealed by the affairs of the nation in the 20th century. A supreme leader of a nation may whip his people to bring about frenzied industrialization which would normally take decades for democracy to achieve. But it is short lived. Top-down economies may succeed at first but it eventually fails as seen in Soviet case.

Any Authoritarian government plants the seeds of their own demise. The system may move mountains through its use of power but eventually, the system is itself hardened like a mountain range becoming stony, immovable and impenetrable. The system tries to empower the vested interest so that they can get privileged access and then resists change since it will pose a mortal threat to their income and status. In such a society, the elites try to acquire as much riches a possible, more than what a free market would grant them.

The government favors the organized interest and industries which seek more power so that they can gain subsidies, monopolies, protection, and tax subsidies more than the competitive system would grant them. If a state instead of the market determines the economic outcomes then politics will beat profitability. Building permits, Licenses, anticompetitive regulations, import barriers go to those players which are favored by the state. Such a system is not easily repaired. This is what China is facing now.

Today China’s export sector contributes to its maximum earning. Once this ends, the countryside of China will not be able to feed the industrial machine with cheap labor. 

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“A Journal opinion article and address an economic issue of current Essay”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1498678-a-journal-opinion-article-and-address-an-economic
(A Journal Opinion Article and Address an Economic Issue of Current Essay)
https://studentshare.org/macro-microeconomics/1498678-a-journal-opinion-article-and-address-an-economic.
“A Journal Opinion Article and Address an Economic Issue of Current Essay”, n.d. https://studentshare.org/macro-microeconomics/1498678-a-journal-opinion-article-and-address-an-economic.
  • Cited: 0 times

CHECK THESE SAMPLES OF The Slowdown of Economic Development in China

The Home Depot in Chinese Market

However, attempts to venture into Asia failed miserably when the company attempted to establish itself in china by providing supplies for home improvement through do it yourself antics.... Different reasons have cited for this failure, but there is no full consensus on the key causes of the failure of such a large company that was unable to replicate the success of its north American operations in china.... Another factor in consideration was the high amount of competition in china, where economic indicators were supportive of Home Depots expansion into China due to rapid growth of the Chinese economy especially following reforms after Mao's reign as the Chinese communist leader....
12 Pages (3000 words) Essay

Analysis of Chinas Economy

Chinese Economy has been progressing at a spectacular rate since more than last three decades – to be precise from 1978 when the State began with free market economy and bet for private capital to the development of china.... Chinas average GDP growth between 2000 and 2012 has… n almost 10% and this rapid growth has put china above the UK, France, Japan and Germany in terms of absolute gross domestic product behind only the US.... Needless to say that Chinese market has been now the focus of the large corporations from the Western world. The people of Sur Supervisor china's Economy Chinese Economy has been progressing at a spectacular rate since more than last three decades – to be precise from 1978 when the State began with free market economy and bet for private capital to the development of china....
2 Pages (500 words) Essay

Asias Slowdown and British Consumers

Naturally, most countries put a lot of effort in economic development and dominance, especially on an international level.... In the paper “Asia's Slowdown and British Consumers” the author focuses on slow down of china's growth for sustainability purposes.... hellip; The author of the paper states that as china is slowing down its growth to be on par with its exchange allies, it is definite that it will have to evade some of the markets it dominates; for instance, it will halt the production of some of its core exports, or just trade with a few countries in Asia....
8 Pages (2000 words) Essay

Emerging Market Economy; a Case of China

… This essay primarily focuses on the analysis of the macroeconomic statistic in china, as an emerging economy, from the year 2004 to 2013.... It is shown in the essay, that China has had a rapid economic growth in the last three decades since the initiation of economic reforms in the year 1979.... This fast rate of economic growth has caught the world's attention, and China is now a strong emerging economy almost closing the gap between it and the US....
10 Pages (2500 words) Essay

Indicators of Chinese Current Economic Strength

“In the year 1978, it was US$230 only and in the year 2010 it had grown to US$4000” (Tong & Wong, 2012) this is a very wide margin. Increasing exports-,… The country itself has a large internal market and given that its produce is becoming more export oriented, it is a good indicator of economic growth. Growth in inward FDI indicates economic development in china.... The reason as to why there was no industrial revolution in china is that the brokers as well as tax collectors created a market only for luxurious consumer goods instead of investing in new technologies....
4 Pages (1000 words) Coursework

Monetary Policy in China

In order to facilitate the growth and development in the economy, the Central bank of china has invested cash in the financial system.... China is experiencing a slowdown in the economic growth and development in the recent years.... The financial system of china is mostly dominated by the banking sector and the economy of china is considered as one of the largest economy of the world.... The two domestic stock exchanges of china are the Shenzhen stock exchange and the shanghai stock exchange which were… The financial system of china is highly developed....
6 Pages (1500 words) Coursework

Economic Development of China

The economy of china has attained a significant change over the decades and this was marked by its beginning of economic reforms that took place in 1978.... The government policies held at this time held the economy of China into a state of economic stagnation and inefficiency.... china has since then shifted from being an economy that is centrally planned to… It has been able to experience a Gross Domestic Product (GDP) of around 10 percent every year and this has enabled many people in the economy to shift from their poverty levels....
10 Pages (2500 words) Research Paper

China in Transition

This essay "China in Transition" discusses some of the transitions that have taken place in china since time immemorial to date that has facilitated the growth of China to the current state.... china is a state that is in the center of an immense political and social confusion.... nbsp;… china through the adoption of new ways has been articulated to its financial, economic and generally the living standards growth of its citizens.... By such like ways china is expected to be among the world's leading financial states inthe near future....
6 Pages (1500 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us