China´s Period Prior to the Economic Reform and Trade Liberalization Essay

China´s Period Prior to the Economic Reform and Trade Liberalization Essay

Length: 2605 words (7.4 double-spaced pages)

Rating: Research Papers

Open Document

Essay Preview

Proposition:
Despite the OECD's (and others') rosy predictions for China's growth between now and, say, 2060, it is entirely possible for China's economic juggernaut to run off the rails, and to remain relative to the now rich countries in a state of disrepair for a long time.


Introduction – China’s Economic Background

34 years ago prior to the economic reforms and trade liberalization, China had a different background to today’s economic development. The government supported policies that kept the country centrally controlled, inefficient and relatively isolated to the world economy. Since 1979, there has been a shift in the economic policies and implementation of free market reforms that has led to trade liberalization and foreign investment. As a result, China has been growing at an average GDP rate above 10% over the past 30 years.

Today, China is the second largest economy in the world driven by its foreign direct investment, large manufacturing base and growing levels of foreign exchange reserves.

Nevertheless it is interesting to analyze how China looked like prior to 1979. Under the leadership of Mao Zedong, China was a centrally planned economy with a vast majority of its economic activity directed by the government which controlled prices, established production objectives and allocated key resources among the different industries. During the 1960s and 70s the Chinese government made large investments into physical and capital resources which led to a vast control of the economy by the SOEs (state-owned enterprises). The ultimate goal of the government was to have a self-sufficient economy with relatively small foreign direct investment as well as international trade. There were no incentives for private firms t...


... middle of paper ...


...up to the junior high school level, which involves nine years of schooling, is compulsory and since the late 2000s has been free of charge” .

For the future economic development of the country and the sustainability of this growth, the aspect of managerial capabilities is an issue for the short to medium term. Clearly with the adaptation of the Western practices forced by market competition or the government willingness to support more western type of education and training, will lead to a more sophisticated work force matching the requirements needed to develop the private or even the SOEs further.

Conclusion

Key policy challenges for sustainable and balanced growth include facilitating the allocation of resources to the most productive sectors, broadening the access to quality education and enhancing competition through further product market liberalisation.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on Trade Liberalization and Economic Growth in Iranian Economy

- 1. Introduction In the current era of globalization, trade liberalization emerges as one of the most serious policy concerns for governments all over the world, especially for developing countries. Trade liberalization is believed to enhance economic growth and development through specialization and technological advances (Hoque and Yusop, 2010). The role of trade policy in economic development has been a key debate in the development literature for most of the second half of the twentieth century....   [tags: Globalization, Growth]

Research Papers
2510 words (7.2 pages)

The Wto And The International Trade Organization Essay examples

- The WTO comes from the need to expand and govern trade among nations. In order to accomplish such task the United States working with the British government create a mechanism called the General Agreement on Tariffs and Trade (GATT) and the International Trade Organization (ITO). At the time GATT was a temporal multilateral agreement that provided a framework of the rules and a forum to negotiate the reduction of the trade barriers among nations. On the other hand, the ITO set up of codes as world trade principles and a formal institution with international reach that would address trade barriers and issued indirectly related to trade....   [tags: General Agreement on Tariffs and Trade]

Research Papers
960 words (2.7 pages)

Financial Liberalization of Pakistan Essay example

- In 1974 all banks of the country were nationalized, with the objective of providing the capital for top priority projects or investments, and to ensure the depositor's capital safety. Although this step was taken for the socio-economic benefits, however, the required results could not be obtained. And under the public sector's ownership and supervision the banking sector proved inefficient (Haque 1997), which leads the lower saving and investment, so as a result economic growth decreased (khan and khan 2007)....   [tags: Economics Finance]

Research Papers
879 words (2.5 pages)

Trade Openess Theory Essay

- Introduction In the 1970’s and 1980’s trade openness and economics reform towards market mechanism flourished in many developing countries. This trend is much different as compared to those in the early 1950’s and 1960’s when many less developed countries favored protection policy, inward orientation, and import substitution. As a result of this change, there are substantial developments in world economy after applying outward orientation. According to Thilrwall (2011 p. 514), the implementation of trade openness has managed world output trade relative to world output gain a considerable growth in the period of 1960-2006....   [tags: economic growth, poverty, inequality]

Research Papers
2434 words (7 pages)

Indian trade liberation Essay example

- The International Trade Liberalization of India According to many global economic studies the key to peace is through the promotion of free trade and the institution of democratic principles, this theory also known as liberal international relations theory. In late 1991, with the transfer of the Indian Parliament into the hands of political and economic reformers, despite much opposition, India began its quest towards liberalization. The reform implemented freer trade in the largest democracy in the world....   [tags: essays research papers fc]

Free Essays
1545 words (4.4 pages)

The Impact of Globalization on the Kenya Labor Market Essay

- While Kenya was definitely one of the leaders in the race towards globalization in Africa, their progression forward was plagued with stops and starts that put them at a disadvantage. It was actually not until 1993 that Kenya fully integrated itself into the global market1. As Africa gained full independence from its colonial masters, “the global trading system remained highly inefficient, with advanced economies drawing on their technological edge to enjoy tremendous market powers: monopoly or oligopoly on the supply side, and monopsony or oligopsony on the demand side (Blue Hippo).” Due to the inefficiency of the system it was even more difficult for Kenya to gain ground in the global eco...   [tags: economy, trade, reforms]

Research Papers
873 words (2.5 pages)

Openess Trade and Growth Essay

- The economic growth story is as long as the history of economic thought. Since the early classics like Adam Smith, David Ricardo and Thomas Malthus studied the issue of growth or introduced fundamental concepts such as diminishing returns and their relationship with the accumulation of physical or human capital, the relationship between technological progress and labor specialization or focus competitive analysis tool dynamic equilibrium. As part of these theories appears arises that relationship between trade openness and economic growth is positive....   [tags: Economic Development, Trade Liberalization]

Research Papers
1085 words (3.1 pages)

Essay on Regional Trade Agreement

- The political force moved away from the painstakingly and time-consuming technique of multilateral tariff negotiations to smaller regional and bilateral provisions - the Regional Trade Agreement. In these arrangements; members accord preferential treatment , basically agreeing to liberalize the exchange of goods and services amongst each another giving regard to certain trade barriers. RTA is not the first-hand way of trade liberalization though. Initially, when multilateral trade discussions used to happen, two-sided and multiparty FTA”s filled the vacuum....   [tags: barriers, liberalization, free, trade]

Research Papers
2292 words (6.5 pages)

Globalization and Human Welfare Essay

- International free trade has become the foundation of neoliberal globalization. The main organizations for carrying out free trade are World Trade Organization (WTO) established on 1995, International Monetary Fund (IMF) and World Bank (WB). The main aim was to promote development and trade. Trade has become the lens through which development is perceived, rather than the other way round . The concept of trade evolved right from Adam Smith and David Ricardo who introduced the concept of comparative advantage which compares the productiveness across countries....   [tags: International Free Trade, Global Commerce]

Research Papers
1642 words (4.7 pages)

Liberalization Essay

- Is liberalizing Waynia in the best interest of the country?. I believe it definitely is. When you look at all the positives that come from being a part of a liberalized country, it is the clear-cut choice. Free trade is something that comes with being liberal. When you see how free trade can open up so many new markets to you and your country, you’ll see that it is the only choice. Along with free trade, you need to look at how conservatives think that input into political matters when you’re not a noble or king is bad....   [tags: essays research papers]

Free Essays
518 words (1.5 pages)