China's Economy Growth Policy

China, the third largest country in the world, is famous for various things; it has one of the world eldest people, civilization, and world’s longest used written languages, many major inventions like paper, compass, gunpowder and printing, The Great wall of china, friendly people, and the best geographical condition. China situates in the eastern Asia which share it borders with Korea Afghanistan, Pakistan, India, Nepal, Sikkim, Bhutan, Burma, Laos and Vietnam. Major cities of china are Beijing, Chengdu, Hong Kong, Lhasa, pingyao, shanghai, Xian, yangshuao, and Urumqi, Suzhou and many others.

The people’s republic of china has administrative control over twenty –provinces and considers Taiwan to be its twenty –third province. the twenty two province , five autonomous regions and four municipalities can be collectively referred to as mainland china there are two special administrative regions such as Hong Kong and Macau that enjoy considerable autonomy.

History

For over four thousand years, china’s political system was based on hereditary monarchies. The first of these dynasties was the Xia but it was later the Qin dynasty that first unified china in 221bc. The last dynasty, the Qing ended in 1911 with the founding of the republic of china by the nationalist Kuomintang. The first half of the 20^th century witnessed china plunging into a period of disunity and civil wars that divided the country into to two main political camps, namely Kuomintang and the communists. Major hostilities ended in 1949, when the people’s republic of china [roc] was established in mainland china by the victories communists. The koumintan-led republic of Chinese government retreated to Taipei, its jurisdiction now limited to Taiwan and several outlying islands. As of today the people’s republic of china is still involved in disputes with the [roc] over the issues of sovereignty and political status of Taiwan.

On October 01, 1949, Mao Zedong proclaimed the people’s republic of china. In 1966’ Mao and his allies launched the Cultural Revolution which would last until Mao’s death a decade later. The Cultural Revolution; motivated by power struggle within the party and fear of the Soviet Union, led to a major upheaval in Chinese society. In 1972, at the peak of the Sino-soviet split, Mao and Zhou Enlai met Richard Nixon in Beijing to establish relations, replacing the republic of china for china’s membership of the United Nations and permanent membership of the Security Council. After Mao’s death in 1976and the arrest of the gang of four, blamed for the excess of the cultural revolution, Deng Xiaoping quickly wrested power form Mao’s anointed successor Hun Guofeng, although he never became the head of the party or stare himself. Deng was in fact the permanent leader of china at that time; his influence within the party led the country to economic reforms of significant magnitude. The communist party subsequently loosened governmental control over citizen’s personal lives and the communes were disabled with many peasants receiving multiple land leases which greatly increased incentives and agricultural production.

Following Mao death and the end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move to a market oriented mixed economy is mainly characterized as a market economy based on private property ownership. Collectivization of the agriculture was dismantled and farmlands were privatized to increase productivity. A wide variety of small scale enterprises were encouraged while the government relaxed price control and promoted foreign investment. Foreign trade was focused on as a major vehicle of growth, which led to the creation of special economic Zones first in Shenzhen and then in other Chinese cities. Inefficient state owned enterprises were restricted by introducing western style management system and the unprofitable one were closed, resulting in massive job losses.

Since economic liberalization began in 1978, the PRC’s investment and export led economy has grown 70 times bigger and is the fastest growing major economy in the world. It now has the world third largest nominal GDP at 30 trillion Yuan although its per capita income of $3300 is still low and puts the PRC behind roughly a hundred countries. The PRC’s rapid growth managed to pull hundreds of millions of its people out of poverty since 1978. Today, about 10% of the Chinese population, down from 64% in 1978, lives below the poverty line of $1.0 per day.

More than 90% of the population is literate competed to 20% in 1950. Urban unemployment declined to 4.0% is the end of 2007. In February 2006 the government advanced its basic education goal by pledging to provide completely free nine year education including textbooks and fees in the poorer western provinces and it was set in 1986. Since the early 1950s, the communist party started the patriotic health campaign aiming at improving sanitation and hygiene as well as attaching several diseases. This has shown major results as diseases like cholera, typhoid and scarlet fever were nearly eradicated. With economic reform after 1978, the health of the Chinese public improved rapidly because of better nutrition and free public health services that are provide in the countryside. The country’s life expectancy at birth jumped about 35 years in 1949 to 73.18 year in 2008 and infant mortality went down from 300 per thousand in the 1950s to about 23per thousand in 2006.

China’s importance in the world today is reflected through its role as the world’s third largest economy and a permanent member of the UN Security Council as well as being a member of several multilateral organizations including the WTO, APEC, East Asia summit and Shanghai’s cooperation organization. In addition, it is recognized nuclear weapon state and has the world’s largest standing army with the third largest defense budget. China has 2.3 million active troops; the people’s liberation army is the largest military in the world. The PLA consist of an army, navy, air force and strategic nuclear force. The officially announced budget of the PLA for 2009 was $70billion.

Since the introduction of market based economic reforms in 1978, china has become one of the world’s fastest growing economics and the world second largest exporter and the third largest importer of goods. Rapid industrialization has reduced its poverty rate form 53% in 1981 to 8% in 2001. However, the RPC is now faced with a number of other problems including a rapidly ageing population due to the one child policy, widening rural urban income gap and environmental degradation. Another concern is that certain sectors of society are not sufficiently benefiting from the PRC’s economic development.

As a result, under the current president HU Jintao and premier Wen Jiabao, the PRC has initiated policies to address these issues relating to equitable distribution of resource. The living standards in urban areas have seen extremely large improvements and freedom continues to expand making less scope for criticism by the outside world.

While accompanying a rapid economic rise the people republic of china since the 1990s, has be seeking to maintain a policy of quiet diplomacy with its neighbors. It does so by keeping economic growth steady and participating in regional organization and cultivating bilateral relation in order to ease suspicion over china’s burgeoning military capabilities. China has started a policy or wooing African nation for trade and bilateral co-operation.