Asian Perspectives Global Issues WORKING PAPER FGI-2012-2 Economic Growth Patterns and Strategies in China and India: Past and Future Louis Kuijs September 2012 Fung Global Institute Cyberport 1, Level 12 100 Cyberport Road Hong Kong Tel: (852) 2300 2728 Fax: (852) 2300 2729 www.fungglobalinstitute.org The Fung Global Institute Working Paper Series presents the findings of original and professional research-in-progress on questions and topics that are relevant to the Institute’s research themes. Written by FGI researchers and, sometimes, researchers from other institutions, the papers aim to get the findings out for critical review and feedback. The views expressed in the papers are those of the authors and do not …show more content…
Continued success cannot be taken for granted, though. We know from history that growth trajectories are not sustained on autopilot. Indeed, both countries are aiming at adjusting their growth and development strategies to deal with problems that have emerged and major challenges ahead. Their 12th five-year plans (5YPs) reflect their visions and objectives. However, adjusting growth and development strategies is complex and difficult from both economic and political economy perspectives. Thus, there is a lot of uncertainty about the direction of policy and about whether and how China and India will adjust their pattern of growth. This paper, written as part of the Fung Global Institute’s research project on the Evolving Growth Models in China and India, is a first step towards exploring the issues involved. It tentatively characterises the existing economic growth patterns and problems; summarises how governments want to adjust their growth strategies; introduces some key features of the policymaking process and some of the institutional and political economy problems; and sketches some tentative economic scenarios. 1 In Section 2 we tentatively characterise the existing economic growth pattern in both countries. Policywise, opening up and gradual market-oriented reform in China were combined with a strong role of the government in
Nowadays, China has become the second largest economy in the world. The GDP (gross domestic product) of china was growing at 9.7% per year in average since 1978, which the year of Chinese “open door” politic founded. China also has become the biggest producer and consumer in many key agricultural and industrial markets and the largest FDI recipient among the developing countries. The performance of china in developing of economy is called “china’s economic miracle”, which be studied by many economists. However, there are also bad results with the development of economy in china such as environment disruption, corruption and
Since the market orientated economic reforms were introduced in 1978 (Khan, Hu (1997, P103) China’s economy has seen a 10% increase in Gross Domestic Product (GDP) Per year (Vincellete, Manoel,
China has reached a milestone in terms of achieving its centenarian goal of making China a prosperous nation once again. One of the ways that it has done this is by having steady economic growth even in the midst of an economic crisis. Not only has China’s economy grown, but its standard of living has also improved, it has achieved this by spending 70 percent of its fiscal revenue towards improving people’s standard of living. China has also pushed more anti-corruption reforms and has made efforts towards widening its economy by setting up freer trade.
The author examines the proposition by Larry Summers, the United States Treasury Secretary, on the economic approach presented by China and India in regard to the next decade. Larry Summers observes that there is no certain growth in China, thus he urges people to deviate from the reliance on the predictions of sudden growth in Communist China, using what they term as Asiaphoria (WSJ). The most significant and acknowledged fact on cross national growth is the regression of data in relation to the mean. The authors argue that the evidence of continuous national growth in a period of a decade does not present a guarantee for continued growth. On the contrary, quick national growth has been noted to lead to a slump in the rate of economic growth.
From April to June 2005, India’s GDP grew at 8.1 per cent, compared with 7.6 per cent in the same period the year before. More impressively, India is achieving this result with just half of China’s level of domestic investment in new factories and equipment, and only 10 per cent of China’s foreign direct investment…
“China is confident and capable of maintaining a reasonable growth rate thanks to its economic structural reforms and emerging new sources of growth” –
The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.
Furthermore, the argument that china experienced opportunity costs as a result of the urban state-centric growth model remains convincing, as the Chinese economy and society deteriorated as a result of these reforms. Some of the greatest costs endured were stagnant household income, increased illiteracy and collapse of health care systems which Huang clearly rests the blame on the1990s reforms. On the other hand, I feel that Huang does not explore the nature of why the Chinese government employed economic reforms that shifted more focus on urban areas. The decentralized policies pursued in the 1980s led to a decrease in government revenue and periods of increased inflation, which caused major urban demonstrations. The reforms of the 1990s were a reaction to consequences of the 1980s, the Chinese government-almost- had to employ these new reforms in order to mitigate demonstrators, solve the economic problems brought on by the 1980s and legitimize its power. Huang place too much focus on the leadership change post-Tiananmen as reason for increased urban shift. In addition, I am not fully convinced after reading Huang’s Capitalism with Chinese characteristics that China could have continued the course of the 1980s, as a country’s economy grows it is expected that there will be a shift
China is the second leading global economy and represents the world’s largest economic growth in recent years.
According to Tian (1996), there are three stages of economic reform in China. The first stage is characterized by economic liberalization. This stage was said to be the most remarkable stage as it has greatly changed the Chinese people’s values, thinking and behavior. The changes were first introduced to people in rural areas and later to other industries and geographic areas. The first stage involved a lot of efforts to the development of foreign trade. China began to adopt decentralized decision-making and various types of incentive mechanisms. China has been using its abundant supply of labor effectively since then.
A good change to the education system that would increase the capabilities of graduate students would be specialization. Specialization mean a student would not have to take advanced classes that focus in areas other than the student’s desired major. This would improve student productivity, increase overall levels of happiness, and increase the aptitude of students arriving in their classes for their major. The idea of specialization in high schools would create students who are eager to learn, coming out of college prepared for their occupation.
For the last two decades, both India and China have grown at twice the global rate and If this trend continues for next few decades, with their vast labor supply, favorable demographics, and aspirations for reaching the developed world per
The People’s Republic of China (PRC) has experienced unprecedented economic growth under the leadership of the Chinese Communist Party (CCP) since 1978. In his speech “The Present Situation and the Tasks Before Us,” Deng Xiaoping emphasized the importance of economic reform: “The superiority [of the socialist system] should manifest itself in many ways, but first and foremost it must be revealed in the rate of economic growth and in economic efficiency” (Deng 1980). With this explicit commitment to growth, Deng links the political legitimacy of the CCP, as the monopolist of power within the PRC, to economic performance. Therefore, the inevitable economic slowdown in the PRC will undermine the legitimacy of the authoritarian CCP and force political liberalization.
The article of Yasheng Huang,named how did China take off,discussing on economic growth mechanism, mainly come to China’s economic reform had the process of financial liberalization. Furthermore, he pointed out that political reform, financial liberalization and the development of township enterprises are the key focus on China’s development.
China has increasingly liberalized their centrally governed economy into a market-controlled economy and continuing this trend is likely to prove to be beneficial. Exploring the past, we will see where the influence for liberalization came from. How liberalization has allowed China to be where it is today as an economic super power and how it will influence the future of China’s development and association with the world economy.