By Anubha Gautam
Edited by Michelle Cherian, Associate Editor, The Indian Economist
Black cat, white cat, what does it matter what color it is as long as it catches mice? said Deng Xiaoping, the architect of China’s economic reforms. The legendary story of China’s economic growth began some good 34 years ago. In these years, China has emerged as supreme economic power which is believed to have taken out 500 million people from poverty and has grown at an annual average rate of 10 %. The power and influence of China’s economy can be estimated from the fact that Big Daddy America is hugely dependent on it for export, import and trading
It all started with an aim to make China’s economy self -sufficient. The breakthrough change was when China decided to do away with its redundant Soviet policies and opened up for trade with the West. It designed cities and coastal in accordance with the needs and demands of foreign investors. A major part of the reforms which were introduced from 1978 was the encouragement of free markets and decentralization of economic policies. This liberalization opened doors for substantial foreign investment which acted as a game-changer for the Chinese economy.
Another factor which accelerated this growth was that China has had the highest level of domestic savings which eventually led to high domestic investment, strengthening the economy further. China’s another smart move was to control the imports and limit them to the products which were not produced within the country; this policy was aligned to their aim of making the country independent. Whether it was education, infrastructure, employee education or further direct funding, China was always exuberant on taking it up. China capitalized on the fact that it has world’s largest population. The labour’s capability to manufacture was exploited to yield gains for the economy. China is a leading exporter of cloth, technology, plastic and vehicles.
Wayne M Morrison mentioned in his article that many economists claim that China’s reallocation of resources in many productive sectors was another factor which helped pace up the economic growth. Moreover, China has increased its FDI outflows over the years, the idea being to gain control over the emerging new powers.
Employment, stability and development are one side of China’s growth story but many people have expressed concerns over its immense usage of power and energy. It has been leading in the contribution of pollution and emission of greenhouse gases. Development always comes at a cost and is never holistic, so has been the case with this country as well.
Anubha is a 2nd year student of English Honors in Maitreyi College; DU. She is an enthusiastic writer, debater and feminist. Following the trends of market, economy society observing and analyzing them are one of her favorite occupations. She has been associated with writing and other ancillary fields since her childhood, obsessed with English and writing, she aims to become a successful writer in near future. In her free time she loves to play Sudoku and learn new things.