Chinese Economy and its Rapid Growth

Table of Contents

1.Introduction of China
1.1 Introduction
1.2 People
1.3 Religion
1.4 Demography

2. Economic growth and their sectors
2.1 Economic growth
2.1.1 General considerations
2.1.2 Economic growth
2.1.3 The role of the Government
2.1.4 Economic policies
2.2 Chinas sectors
2.2.1 Agriculture and livestock
2.2.2 Manufacturing of China
2.2.3 Banks and stock trading

3. Chinese economic reforms since 1978

4. Energy and mineral resources
4.1 Energy industry
4.2 Resources and power
4.3 Minerals of China

5. China's influence in Afrika
5.1 Ports in Africa under Chinese influence

6. The New Silk Road
6.1 Opportunities for trade and world order
6.2 Criticism
6.3 The European counterpart to the Silk Road

7. Conclusion

Bibliography

1.Introduction of China

1.1 Introduction

The subject of this assignment is the Chinese economy and the focus is on the extraordinarily rapid growth of it. How could China, with the largest population on earth and its equally diverse population, go from being an emerging economy with an average income of 54 US dollars per year, to the economic power it is today? First, the country will be presented as such, then we consider the economic growth and the sectors. In the third chapter, we focus on the reforms, their impact on the people and the economy. Then, in the next chapter, we will deal with the energy and resources. China's influence in Africa is dealt with in the fifth chapter and the "One Belt One Road" initiative follows in the sixth chapter. Finally, there is a summary with an outlook on the future of China and the global economy.

China is a huge country with a total area from 9,572,900 square kilometers. 1,416,687,000 people living there, for compression, the population corresponds to approx. 18% of total world population. The majority live in the city’s (59.65%). The form of government is a single-party peoples republic with one legislative house and the president is Xi Jinping. China is made up from 33 administrative units that are directly under the central government. 22 of these are provinces, 5 autonomous region, 4 municipalities and 2 special administrative regions (Hong Kong and Macau). The capital city is Beijing (Peking). A highly diverse and complex country lies within the boundaries of China. Its topography encapsulates the highest and lowest places on Earth, while its relief ranges from mountainous terrain to extensive coastal lowlands. China has a wide range of climates, from arid, desert-like conditions in the northwest to a tropical monsoon climate in the southeast. China has the largest temperature difference between its northern and southern borders of any country in the world. The diversity of relief and climate in China has resulted in one of the most diverse ecological niches in the world, populated by a wide variety of plant and animal species. One of the most recognizable characteristics of China is its sheer population size. A fifth of humanity is of Chinese descent. Although China has a great majority of Chinese (Han), it does have a variety of indigenous people, unlike most other countries. (Britannica, 2022)

1.2 People

China is a multicultural country with a population that is made up of a number of ethnic and linguistic groups. In all provinces and autonomous regions except Tibet and Xinjiang, Han Chinese outnumber all other minorities. Therefore, the Han form the great homogeneous mass of the Chinese people, sharing the same culture, traditions, and written language. (Britannica, 2022)

1.3 Religion

It is especially known as the birthplace of the religious-philosophical schools of Confucianism and Daoism, which influenced Chinese society and governments for centuries. Buddhism may have appeared as early as the 3rd century BC. to China and became a recognized presence in the 1st century AD. The Country became an incubator for many of the major Buddhist sects today, including Zen and Pure Land, and by expanding into Tibet, became the birthplace of Tibetan Buddhism. About half of the Chinese say they are not religious or atheist. 21.9% are followers of the Chinese folk-religionist, 18.2% Buddhist, 5.1% Christian, 1.8% Muslim and 0.8% other. (Britannica, 2022)

1.4 Demography

After 1949, sanitation and medical conditions improved significantly, epidemics were brought under control, and the health of future generations gradually improved. Public health has also improved, so the death rate has fallen faster than the birth rate and population growth has accelerated. China's population reached 1 billion in the early 1980s and exceeded 1.3 billion in the early 2000s. The growing population was a major problem for the government. In 1955-58, when the country was struggling to maintain adequate food supplies and dealing with generally low living standards, the authorities launched a major prevention campaign. Attempts were made to make late marriages and family restrictions mandatory, and a one-child-per-family policy was enforced in 1979. The government's efforts have been more effective since the launch of the third family planning program in 1970. China's population growth rate is now the lowest among developing countries, although annual net population growth is still substantial due to its large population. About one-sixth of the population is under the age of 15. (Britannica, 2022)

2. Economic growth and their sectors

2.1 Economic growth

2.1.1 General considerations

China played a relatively small role in the world economy until the end of the 20th century, despite its enormous territory, abundant resources, and roughly one-fifth of the world's population living within its borders. However, since the late 1970s, China has dramatically increased its interaction with international commerce and has become a dominant player in world trade. Both China's foreign trade and gross domestic product (GNP) have experienced sustained and rapid growth, especially since foreign companies have been using China as an export platform for goods made in China. (Britannica, 2022)

Now it is the world's No. 1 exporting country. Since the opening of the economy in the late 1970s, the country has increased its export volume from 2 billion U.S. dollars to 2,000 billion U.S. dollars. No other country currently produces more agricultural goods. In the ranking of the largest China also occupies first place in the ranking of the largest industrial powers. A total of 900 million people in China are employed. (Hermann, 2020)

The Chinese economy has been in transition since the late 1970s, when China broke away from the Soviet-style economic system. The government's focus has shifted from heavy industry to light and high-tech industries. Nevertheless, growth continues to be held back by major bottlenecks. Existing electricity is insufficient to supply all of the country's installed industrial capacity, transportation systems were still inadequate to move critical raw materials such as coal in sufficient quantities, and communications systems were unable to meet the demands of a centrally planned economy of China's size and complexity. China's underdeveloped transportation system, coupled with large differences in the availability of natural and human resources and industrial infrastructure, lead to significant differences in China's regional economies. The three most prosperous areas are located on the southeastern coast of the Pearl River Delta (Pearl River Delta), the east bank of the lower reaches of the Yangtze River, and near the Bohai Sea in the Beijing-Tianjin-Liaoning region (Zhili Bay). Rapid development in these regions has the greatest impact on the entire Asian economy. To catch up with the more prosperous coastal regions, the government has prioritized economic development in the interior. (Britannica, 2022)

Prices of some important commodities, particularly industrial raw materials and major manufactured goods, continue to be determined by the state, although the share of these commodities under state control continues to decline. An important exception is energy, which continues to be regulated by the government. An important factor was China's admission to the World Trade Organization (WTO) in 2001, which came with requirements for further economic liberalization and state deregulation. (Britannica, 2022)

2.1.2 Economic growth

Thanks to the country's flourishing economy, China has taken top positions in many production sectors in an international comparison. In the agricultural sector in particular, the Republic of China has overtaken many of its competitors on the global market. In 2016, China was the world's largest producer of grain, wheat, rice, apples, grapes, potatoes, pork, sheep meat, fish products and cotton. As the country is rich in mineral resources, China also occupies top positions in mining. The People's Republic produces the world's largest quantities of gold, zinc, tin, lead and iron ore. In the field of industrial production, China is a leader in the manufacture of iron, steel, aluminum, cement, cardboard, paper and fertilizer. Likewise, the Republic is the world's largest producer of energy and electricity. These various factors result in a balance sheet that is quite impressive. This was not always the case. China's upswing was fast and successful. When the People's Republic was founded, each inhabitant earned an average of 54 U.S. dollars per year, not per month. At that time, the still young People's Republic was one of the poorest countries on earth. Due to the various reforms, this changed in a comparatively short time. Within just 30 years, industrialization brought the Chinese a veritable income boom. By the early 1980s, living standards and prosperity had improved dramatically. According to the World Bank, the Chinese republic transformed from a developing country to a country with an income level in the upper global average. Life span increased, as did the level of education, and medical care also improved noticeably. In 2016, 43.4 million inhabitants lived in poverty, a comparatively low percentage in view of the total population of an estimated 1.4 billion people. (Hermann, 2020)

China's citizens even have now social insurance. It covers illness, old age, accidents, maternity and unemployment. Social assistance is also distributed through the social insurance system, which provides livelihood security. However, this state social insurance is not implemented uniformly in practice. Only employees are insured. Other citizens such as students, children and the self-employed do not benefit from this insurance. The inhabitants of rural areas are also not covered by the social insurance. For these people there is a possibility of voluntary health insurance. Half of the insurance premiums are paid by the government, the other half is paid by the policyholder himself. (Hermann, 2020)

2.1.3 The role of the Government

Since 1949 China has been a socialist country, and for most of that period, the government played a leading role in the economy. For example In the industrial sector, the state has long owned almost all the companies that produce Chinese manufactured products. Although heavy industry is still mainly state-owned, the proportion of total industrial capacity controlled by the government has gradually declined. In the urban sector, the government sets prices for key commodities, sets levels and overall allocation of investment funds, sets production targets for large firms and industries, allocates energy, sets wage levels and employment targets, operates wholesale and retail networks, and controls fiscal policy and banking system. (Britannica, 2022)

In the early 2000s, much of the system was in flux as the central government's role in managing the economy declined, while the role of private initiative and market forces increased. Nonetheless, the government continues to play a leading role in the city's economy. In China, there are three types of economic activities: those determined by mandatory planning, those carried out according to indicative planning (in which central planning of economic outcomes is implemented indirectly), and those determined by market forces. The second and third categories have grown at the expense of the first, but goods of national importance and almost all major construction projects have remained within the binding planning system. (Britannica, 2022)

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