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China is a communist country. As a communist country, it follows the socialist market rules for its economy. According to the International Monetary Fund (IMF), China has the largest purchasing power in the world. In GDP terms, the Chinese economy is the world’s 2nd largest economy. The Chinese government likes to keep details about its economy very secret. Though the Chinese government has been widely criticized at the international level for corporate protectionism and local favoritism, it has not affected its growth and has maintained as steady rate of roughly 10% growth over the past 30 years. That is why the Chinese economy is among the fastest growing economies in the world. The Chinese economy is dominated by public sector enterprises. China is the second largest manufacturer of goods in the world. It also has the biggest population of businessmen who are into imports and exports of various goods. China is known as the “World’s Factory” because it exports and imports maximum goods from all around the world. China became the 2nd biggest importer of goods by strengthening its relations with trade organizations and entering into treaties. China made business agreements with many Asians countries along with others like Australia, New Zealand, Pakistan, South Korea, and Switzerland and became a member of the World Trade Organization (WTO) in 2001.
Today China is in a very good position in the world market. However, China had to suffer a lot during the nineteenth century for various reasons. The Communist Party of China came to power in 1921 and faced many political and military challenges. Japan assaulted China on a couple of occasions, and in the midst of the Second World War. Chinese nationalist forces and the communist party decided to jointly fight the Japanese. After the 2nd World War Japanese and Russians took control in many parts of China. America tried to join hands with Russia to take full control. But these attempts were blocked by the Communist Revolution of 1946 - 1949. In 1978 China had gone through a big economic crisis. During that time, the whole world started to ignore China for Its financial weakness. But instead of getting down, China took this as an inspiration and brought lot of improvements in its economy.
Our professional online assignment experts have helped thousands of students in many countries with their college homework and assignments, including Chinese economy. We have indepth knowledge of economic conditions in various countries around the world.
Key factors of the Chinese economic crisis were a weakening Chinese Yuan, shrinking money supply, excessive investment, deflation, high rate of corporate loans and high capital outflow. According to Chinese economic news Chinese factories produced huge amount of goods which have not been sold. Many newly built apartments lay empty. Costs were rising but product demand kept falling. The slow movement of domestic consumption was among the key factors of Chinese economic challenges.
Official data of the Chinese economy in 2017 indicates it grew 6.75% that year. It exceeded Beijing’s official annual expansion target of about 6.5%. The face value of 2017 was the highest growth rate in the past two years. Chinese economy started expanding noticeably since 2010. But according to the Peking University finance professor Michael Pettis that was not the actual picture of Chinese economy. Michael Pettis said “it measures not output but input into the system, as local governments are encouraged to borrow however much is necessary in order to generate that GDP growth,”
According to Lee the figure of Chinese growth is not the corporate value’s economic growth. In words of Lee “In China, we are busy building roads, factories, buildings – that’s GDP growth. In no other countries [other than China] do you see so many roads, buildings and bridges being built.” In 2016 the governments of Mongolia and of the large industrial city of Tianjin confessed that economic number for 2016 were overstated.
According to Chinese economic news two things stand out:
First: In the world economy, it appears strong due to its exports. By also investing in infrastructure China is trying to do better than expectations.
Second: Is it real?
It is hard to believe that Chinese economy is so stable that it is exceeding government targets all the time! Local government loans, corporate and house-holding loans and bank loans to consumers have made the Chinese economy grow significantly. According to the International Monetary Fund (IMF), China’s economic rate had ballooned 234% of total output. It said China needed to give more efforts to improve its banking system and finance instead of concentrating only on it's growth.
China started its anti-pollution campaign across 28 cities. This campaign reducing factory productions like cement & steel. Houses asked to use natural gas and electricity from coal. As a result Chinese economy is getting affected. However this anti air-pollution campaign was abandoned in December 2017
Since 1867 the US was the biggest economy in the world. But, slowly, the top rank started slipping and started getting affected by the Chinese economic growth. Since 1978, the initiation of Chinese economic reforms accelerated its growth almost 10% higher. Almost half of its 1.3 billion population came out of poverty line which made China the undisputed second-largest economy. In 2012 according to an IMF estimate, China’s domestic product in terms of current rate and market exchange rates – was $8.2 trillion. In same year for US it was $16 trillion. That means at that time China’s economic growth was just 50% of US. This was a significant gap which indicated that China was going to take a position beside the US in only a couple of more years.
Since 1978 China took enormous initiatives to improve its economy. These initiatives brought rapid social and economic development and turned China from a centrally-planned economy to a market-based economy. If we go through the Chinese economy’s past and present, then we can see Chinese had put in restless efforts to make a great position among the world economies. There were lots of challenges in this journey which still exist to this day. However, despite all challenges China has occupied the top position in the world’s economic markets. From kid’s toys to wheel chair for grandpa-China exports everything all over the world at very cheap prices. No wonder, China is known as the "world's factory"!
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