...China’s relations with the world economy change after 1993? The economic reforms of China, called “open doors policy” starting in 1978 with Deng Xiaoping –the leader of the Communist Party of China (CPC) - marked the beginning of a new era where China initiated to open its economy to the world. (Nolan, 2005) In 1992, during his Southern tour, Deng Xiaoping introduced the term of “Socialist Market economy” to describe Chinese economy and in 1993 the term was added to the Constitution, which means that socialism was still the basis of the economical system but that the State also protected the market economy from now on and therefore was ready to go international. This essay will discuss to which extent 1993 was the changing year for China’s international economic relations. Naughton (2007) refers to the 1990s reform in China as a “reform with losers” meaning that at this point, Chinese economy was moving towards a transformation to capitalism. They started to strengthen the institutions of market economy and began to privatize the State sector. The State-owned Enterprises (SOE) reform - specifically the “grasping the big, letting go of the small” strategy - was aimed to improve the efficiency and corporate governance of the State companies by keeping the key resources (such as infrastructure construction, telecommunications, financial services, energy and raw materials) (GENG, X., YANG, X. and JANUS, A. 2009) and the big companies and let go the smallest ones, leaving space...
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...the biggest mistake in modern Chinese history. If China didn’t have the Cultural Revolution, Chinese lives would be much better than now. Cultural Revolution was started in 1967 by Mao Tsetung who was the first chairman of the People's Republic of China. In his opinion, China had not finished socialist transformation. There were still some capitalist ideas in some persons’ minds, especially in intellectuals’ minds, so he started Cultural Revolution. 10 years later, in 1977, Cultural Revolution was ended by Deng Xiaoping who leaded China far away from closed-door policy, and made China become more and more opening. This decade was called black ten years by Chinese people, because these 10 years had huge effects on Chinese lives about education, culture, or economy and so on. Culture Revolution has influenced China in several ways. First, the education system collapsed at that time, because Cultural Revolution focused on the intellectuals, such as, teachers, professors and scientists. Mao Tsetung thought every person who had high educational background, or high political status had to go to countryside and accept labor reform. Some of them, who used to be capitalism or whose family used to be capitalisms, were put in prison, or even killed. So, in those ten years, people who had high educational background didn’t have any social status, but workers or farmers got the highest social status. So students didn’t need get more education, and they didn’t go to school anymore. According...
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...World Trade Organization (WTO) in November 2001 marked one of the most important steps of the Chinese government towards deepening the integration of the Chinese economy into the world economy and therewith going more deeply into the globalization. This development, however, does not mean that the issue of globalization is not controversial in China. Indeed, the fifteen years since 1986 in which China actually underwent a tremendous negotiation process with the WTO, as well as with its members, have been accompanied by an intense domestic debate about the sense and the meaning of globalization. Even through today, the Chinese membership in the WTO is certainly not inevitable; the globalization debate in China continues, reflecting the fact that the Chinese feel strongly challenged by globalization and are trying to search for ways to deal effectively with it. This paper regards it as its main task to examine systematically the Chinese reactions to globalization. To achieve this goal, the analysis will focus on three questions. Firstly, it will find out the general understanding of globalization by the Chinese elite. The term “general understanding” means in this sense the understanding which most Chinese scholars and politicians seem to share regardless of whether he or she is “pro-globalization” or “anti-globalization”. Secondly, it will try to identify the main strains of the Chinese debate on globalization. In doing so, the substantial arguments of the different groups will...
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...years of communist rule (1949 – 1979), China had an autakrick economy i.e. it prohibited foreign investment & restricted foreign trade. * China’s policy also reflected its historical belief that contact with foreigners tended to corrupt its politics and harm its culture. Still, in order to ahead of the other countries economically, China enacted the Law on Joint Ventures using Chinese and Foreign Investment in 1979. * Since then, China has experienced a dramatic rise in FDI. The largest recipient of FDI among all developing countries, and it ranked second to the United States for FDI inflows since 1993. * By mid – 2002, total FDI in China had exceeded $700 billion and was invested in nearly 4, 00,000 ventures. * Japan, Taiwan, US are China’s most important sources of FDI. * China is world’s third largest country in area and largest in population, which makes it attractive to market-seeing FDIs. * It modified their practical aspects on trade by steadily adopting the principles of free trade. * China restricted imports & let foreign investors propose their preferred mode of entry by giving stringent criteria i.e. each foreign investment application should determine whether the investment was in the best interests of China – whether it helped in capital formation, promoted exports, created jobs, or transferred technology. * All FDIs had to go through an extensive process of the Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC)...
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...www.sciedu.ca/rwe Research in World Economy Vol. 2, No. 2; October 2011 An Analysis of Emerging China’s Economy and its Influence on World Economy Zhijun Sheng (Corresponding author) School of Economics and Management, Changchun University of Science and Technology Changchun 130022, China Tel: +86-135-0445-7191 Email: shengzhijun412@126.com Jing Ma School of Economics and Management, Changchun University of Science and Technology Changchun 130022, China Email: majingdoll@hotmail.com Received: July 22, 2011 Accepted: August 21, 2011 doi:10.5430/rwe.v2n2p21 Abstract Since entering 21st century, the Chinese economy has obtained unprecedented development opportunity, growing rapidly. We emphatically analyze the remarkable performance and the immense changes of the Chinese economy in economic output, foreign trade, foreign investment and enterprise strength, etc. Finally, we point out the reality and potential influence and contribution of emerging China on world economy. Keywords: China’s Economy, Emerging Market, World Economy At the end of 2010, China’s Social Science Institute issued “World economy Yellow Paper” and “International Situation Yellow Paper”, which pointed out China has become the second biggest economy in the world, and has been in the leading position on many aspect. For instance, China ranks second on multinational merger and acquisition and surpasses UK, France and Germany to become the International Monetary Fund's third...
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...China’s historical background and its need for reform and also how economic reform started out in 1978. Then I will go on to cover the four major economic institutions that needed to be reformed in order for China to become a market economy. These four major economic institutions will then be discussed in detail. This paper will then go briefly into China joining the WTO and will conclude with China’s economic situation at present. Chinese economic policies and institution have undergone a number of extreme changes since the establishment of the Communist regime in 1949. After the Communist Party took national power in 1949, the disorder caused by the imperialist invasions and domestic wars were put to an end and China began to strive for development by following Russia’s example in pursuing Leninist and Marxist doctrine. By following this doctrine they would replace free market and private ownership with socialist planning and public ownership. In order for this to become a reality China had to pursue radical revolutionary domestic and foreign policies to overcome the resistance to the Chinese Communist movements. After closing its doors to western concepts of capitalism and free market economy it seemed like China was doing well but it was soon evident that the rigid planning and the command market economy was becoming inefficient. In contrast to the western economies China was indeed falling behind. Even China’s neighbors such as Taiwan, Singapore, Korea and Hong Kong were growing...
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...How China’s Currency Manipulation Affects US Economy Howe School of Technology Management Principles of Economics How China’s Currency Manipulation Affects US Economy Currency intervention is the action of one or more governments, central banks, or speculators that increases or reduces the value of a particular currency against another currency – this is according to Wikipedia. From January until October in 2010 imports from China to the United States this year were $299,026.0 million and only $72,276.2 million in exports to China, leaving a U.S. trade deficit of -226,749.8 million - this is according to the U.S Census Bureau U.S Foreign Trade Statistics. Here we can examine that Chinese imports to the United States were too high which makes U.S. Gross Domestic Profit (GDP) shrink because imports are subtracted to the Gross Domestic Profit. This trade deficit causes damage to the United States manufacturers and destroys jobs. Chinese products are very attractive because their low labor cost. When U.S. people purchase Chinese manufacturing goods, their manufactures are compensated in dollars which are placed in a United States bank account. Then, the Chinese need to exchange the dollars to Yuan and as a result via their banks they sell the dollars to the Chinese Central Bank which is known as the People’s Bank of China. Given that the U.S trade with China does not balance, the result will be a shortage of the Yuan and a surplus...
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...imbalance has caused trade and development to be somewhat controversial in their Relationship. This paper will also look at the historical and contemporary ties between the two economies. In the Late 1960’s, shortly after Zambia’s Independence, China constructed a 2000km railway linking Zambia to Tanzania, in order to provide an alternate route to seaport trade for Zambia. This gesture, showed China’s interest in building ties with the Southern African State, and it also showed, that China could be a dependable ally of the Zambia. Zambia in turn also reciprocated, supporting the One China policy and also co- sponsoring China’s bid in the UN Security Council. Since then, both states have become affiliates with the sole purpose of steadfast development through trade and aid. After time and effort have been put into building political ties, investments made among allied states tend to incline economic gains and this gives birth to a new type of partnership among states. Chinese Investments in the Zambia can be dated back to the period of Zambia’s Post-independence, this was the late 1960’s. First wave of Chinese Investments came into Zambia in forms of Development aid and has since then developed and increased, reaching nearly all sectors of the Zambian economy. Chinese Investment in Zambia has grown posthaste over the last decade and this is because of the historical friendship that has existed between the two states. Kenneth Kaunda, The...
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..."The rise in disposable income and the change in government policy has created an environment for global companies to enter the Chinese market." we will focus on luxury products Question - How has the income levels changed in the Chinese economy and what factors contribute to the change in the income levels. Also what factors (from an income standpoint) should western firms keep in mind when deciding to serve the Chinese market. As per the Mckinsey Global Institute (MGI), in 1985, 99 percent of the household lived on income less than 25,00 reminbi, or $3019 per year. An estimated 116 million people in china were living less than $1 a day, by 2004 this number has been by 53 percent to just under 54 million. This has been a historical achievement in one generation. Chinas pro-market reforms and integration into the global economy has enabled China to achieve such success. As real average disposable income for households has grown 3.2 times over the past 20 years to 25,348 renminbi today, china has developed a structure of distinct income levels and the rise of the middle class. Even though there remains a huge income gap between the rural and urban population. The disposable income for people living in the rural and urban population is increasing. The diagrams on the right depict the rise in their disposal income level in urban and rural households. Due to the rapid pace of urbanization in China, the annual disposable income per capita for urban households is climbing...
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...the south, the Gobi desert to the north and inhospitable deserts and high plateaus to the west. The Yellow river in China is said to be the source of the first Chinese culture and civilization. There are many different cultures located in China such as the Yangshao culture, Hongshan culture, and Yunnan culture. Ancient Chinese agrarian religion revolved around the worship of natural forces and spirits who controlled the elements and presided over rivers, fields and mountains. Shaman known as wu acted as intermediaries between the human and spiritual worlds and performed rites to insure good weather and harvests and keep evil spirits at bay. Even though China is regarded officially as an atheist state today, it has had an officially recognized religion since 2356 B.C., when science, religion, mythology and government were all linked together. Taoism and Confucianism began to take shape around the 5th and 6th centuries B.C. but evolved from religions that had been around in China for at least a thousand years before that. China has always been known for having intelligent minds and creating and producing some of the best products. They introduced the world to woven silk, fireworks, playing cards, pasta, fishing reels, whiskey, poison gas, wood block printing, lacquer, compass, and the wheelbarrow. The Chinese mathematicians...
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...Abstract This article mainly focus on the increasingly exacerbated “Brain Drain” in China. The article analyzes what will be the pivotal factors that affect international students and scholars about making decision of whether return to China or not, especially in the circumstance that international economy has been playing the most crucial role across the world. Based on the comparison of several main factors, the article argues that since the development of economic condition has become the most important index to assess countries, and global-scale economy has been worldwide spread, for this generation(those who were born in latter 1980s) in China. They have more opportunities running businesses or gaining high wages than ever. Compare to the other factors, the economic factor is the mainly driving factor influences international students and scholars about retuning to China or not. Global Economy: Today’s Most Important Factor In China’s “Brain Drain” There are two revolutionary “Brain Drain” in China based on the contemporary economy-oriented phenomena. The first section will state the various analysis of former researchers, and with comparison and contracting, sums up with several main factors that affect international students and scholars to make the decision about returning to China or not. The second section will elaborate the two main factors based on the global economic circumstance, and then ends up with conclusion...
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...Everything is Made in China Made in china means products are manufactured in the mainland of China. People who live in China feel that all goods are made in China is a normal thing because the Chinese people do not really know almost everything in foreign countries also is made in China. Because of the cheap labors and China's large manufacturing industry, “made in China” becomes one of the most recognizable labels in the world today. “Made in China” has a huge range of goods from clothing to electronics (Garten). World economy is becoming so dependent on China as an industrial lifeline. China's importance to global manufacturing will resemble Saudi Arabia's position in world oil markets. As a result, there are more and more goods are made in China. Some people like goods which are made in China because these goods are cheaper. On the other hand, not all people think that goods are made in China is good thing. Just as the editorial cartoon I found, the editorial cartoon describes a broken plane which made by wood, and a soldier say: I told you we should not have bought those airplanes with the “made in China” sticker. Unquestionably, this editorial cartoon ridicules made in China means low quality. Moreover, all goods are made in China also has some negative influences for other economic facets. So the question here is so many goods are made in China is a good thing or a bad thing. Too many goods are made in China have many disadvantages. The main problem about...
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...Motivations for Chinese overseas graduates returning home The number of Chinese overseas students has been increasing at a dramatic rate, especially since the early 1990s. The “going abroad heat” has never slackened among mainland China’s young people. China is the world’s second largest economic entity and Chinese people are getting better off with the globalization and opening reform, thus studying abroad is no longer mysterious and unachievable for the average families in China. In contrast, the “return-to-China heat” wave has caused the “American Dream” to fade rapidly among young Chinese who are now casting their eyes towards their motherland. Kellogg(2012) concludes that surveys conducted in 2001 and 2005 of Chinese students enrolled at American universities showed that the intention to return home after graduation is indeed rising.(p.83-104) Chinese contemporary economics, especially social economics, is giving more and more attention to such factors as manpower and talent. Wang (2004) states that the New York Times estimates that this large-scale reflux of talent will be a major phenomenon in China in the next decade.(p.7-11) So, an analysis of the incentives for international graduates returning back to China reveals that the tangible benefits offered by the Chinese governmental policies as well as the intangible benefits in a form of psychological satisfaction are the two main aspects of the returnees’ motivation. China is becoming the largest...
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...Two Years after the death of Mao Zedong in 1976, it became apparent to many of China's leaders that Economic reform was necessary. By 1978 " Chinese leaders were searching for a solution to serious economic problems produced by Hua Guofeng, the man who had succeeded Mao Zedong as CCP leader after Mao's death" (Shirk 35). As Susan L. Shirk describes the situation in The Political Logic of Economic Reform in China, restoring the CCP's prestige required improving economic performance and raising living standards. After the communist take over the country, Mao contained his emphasis on moral force by demanding that Chinese citizens demonstrate what he referred as "correct consciousness". It is noteworthy that shirk feels that the Chinese communist party leaders saw economic reform as a way to regain their and their party moral virtue even after Mao's death thus, paradoxically, by demonstrating their expertise in a moral political area of competence, the leaders of CCP felt they could demonstrate how they were serving the people. To a great extent, the issue of economic reform became politicized as the issue was used as a means by Deng Xiaoping to attain the leadership of the Chinese Communist Party. "Reform policies became Deng's platform against Hua for post-Mao leadership" (Shirk 36). Given this history of economic reform, it is evident that "under the present system economic questions are necessarily political questions" (Dorn 43). China was "still a state in which the central...
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...factors that could possibly affect foreign profitability. In the case, Fung and Wong indicated in 2006, that China had become the world’s third-largest exporter with an estimated $970 billion and earning $1.2 trillion in foreign currency reserves (Fung). The U.S. and other countries are concerned that the Yuan was undervalued which will ultimately raise the demand for Chinese exports and decrease China's demand for imports from other countries. Becker states that if China keeps the dollar and the currencies of other countries artificially expensive compared to its currency it will create a problem towards other economies (Becker). The U.S. believes that China is manipulating the exchange rate to increase trade and dollar assets. The United States have also expressed extreme concern with China’s way of trade. For example, the U.S. questioned the fact that the renminbi is being a peg against the dollar. This case analysis will subsequently identify the following answers to the questions: * Should China allow the Yuan to appreciate? * Will a stronger renminbi strengthen the economy? The above objectives along with other alternatives and observations will be outlined. My goal of preparing this analysis is to primarily illustrate the measures of the competitiveness of China’s trade against the USD. Alternative Solutions Producers may also suggest that the renminbi is an...
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