Role Of Export Led Growth On Shenzhen

The attached article discussed the risks and rewards of China going global. Critically analyse China’s international expansion. Also recommend what China can do to generate further economic growth for both its local economy and discuss how this can contribute to the global economic growth.

It is this that has sparked China’s vulnerability to external shocks. In 2011, China’s exports amassed almost $2 trillion, however in Feb 2012, China recorded a $31.5 billion trade deficit as a result of the European sovereign debt crisis in which China’s main trading partners plunged into recession. China’s severe BOGS decrease is an attempt to control growth and a sustained level of 7.5%. Investment policies are also critical for China to achieve economic growth and development. Foreign Direct Investment (FDI) in China is being sought primarily in the redesign of State Owned Enterprises (SOE’s) and in the development of interior provinces. Between 75-80% of World Bank loans to China in 2008 were directed to the central and western regions, the most economically disadvantaged. This promotes increased wealth within China, leading to higher levels of development due to a more positive Human Development Index (HDI), which currently sits at 0.687, up from 0.677 in 2010. Thus, trade and investment are critical factors in ensuring that China’s growth remains sustained at 7.5% whilst still encouraging increases in development.

Since the reform and opening up, the economy of China grows significantly, as an emerging economy, China's economy has made tremendous contributions to the global economy, and Renminbi has become one of the most important currency in the world. According to the survey conducted by China National Bureau of Statistics found that from 1979 to 2012, China has attained an annual average growth rate of 9.8% for its national economy, while the annual average growth of the world economy is only 2.8 % during the same period. In past 30 years, China's GDP surpassed Japan’s, China became the world 's second largest economy, in addition, the huge total volume of trade makes China become the world 's largest trading nation. The contribution of China’s

Globalization is a process that refers to the increased integration between different countries and economies as well as the increased impact of international influences on all aspects of life and economic activity. Over the last 50 years, globalization has had a tremendous impact on the Chinese economy. The impacts brought forth by globalization can be both positive and negative and effect both economic performance, economic growth and the development of China’s economy. Globalization is the main factor responsible for China’s significant growth that has taken place over the last two decades. However, globalization itself is not entirely responsible. The Chinese economy has also implemented strategies which have been very effective in promoting economic growth and development. These strategies include the implantation of“Open door policy”, “Reformation” of China’s agricultural system and joining the World Trade Organisation.

From 1980 to 2010, China relied on a uniquely successful investment- and export-led development model for its 30-year miracle of double digit GDP growth. However, to make rapid industrialization possible, China directed most of its investments to the cities, financed massive urban infrastructure and development projects. In result of

China’s success in consumer electronic manufacturing can be traced to the creation of special economic zones in the early 1980s, intended to increase “foreign capital and boost exports as the means to integrate regional and global economies” (Chan and Seldon 2013, 103). This capitalism was a sharp departure from the previous Communist based economic policies that dominated the country for decades (Ya and O 'Donnell 2017). The Shenzhen Special Economic Zone (one of four) was established in May 1980 adjacent to the border with Hong Kong, which was experiencing its own economic boom (Ngai and Chan 2012, Ya and O 'Donnell 2017). Manufacturing in the Shenzhen Economic Zone grew exponentially after the Chinese government began offering

Shenzhen, the nearest province of China from Hong Kong, has a 260km long coastline. This coastline was separated in to East and West by Kowloon Peninsula in which the western port area lies also in the Pearl River Region (PRD). There are altogether nine container terminals and the major two of them are Shekou (on the West) and Yantian (on the East). In 2010, the total containers throughput of these Shenzhen ports is 22.51 million TEUs (Shekou - 9.8796 million TEUs; Yantian - 10.13 million TEUs and the overall containers throughput of all ports in China is 146 million TEUs).

In chapter 15 of Understanding the Political World, the authors outline the main goals of the BRICS countries. They believe that there are three major items on the agenda of each of the BRICS countries. The first of which is prosperity, followed by stability, and last security. As these ideas relate specifically to China, Danziger and Smith do not say much as to how China looks to become a more prosperous country. The comment that they do make pertains to how China was able to maintain an average growth of just over 10% annually in the economy from 1989 to 2010. They say, “this has been particularly driven by the export of manufactured goods at prices that are highly competitive in the global marketplace.” (Danziger & Smith, pg. 437) In Minzner’s article, he attributes the economic boom that went on in China to “state-led investments in roads, airports, and housing (which) had loomed large as drivers of economic growth.” (Minzner, pg. 137) But he then highlights how, after 2010, the growth rate of China’s economy dropped and by 2012 it was at 7.7% and continuing to fall. He gives a statement that blatantly explains why this took place. “Beijing has systematically undercut its own bottom-up reforms.” (Minzner, pg. 141) He explains this more in depth, but his main argument is that whenever a

The growth in the developing nation’s economy over the past 3 decades was heavily dependent on its low cost advantage compared to those of other countries. During this period of growth, foreign companies flocked to China to set up production facilities and factories to capitalize on this cost advantage. Raw materials are shipped to China, where factory workers build the final products and export them out to various countries (Wassener 2014).

The main advantage of doing business in China is the fact that China has emerged as one of the world’s strongest economic forces, driven by the shear number of

Moreover, nowadays, China is a cross trade place where all countries come in order to do business. It’s today a central point for the manufacturing and the trading thanks to the work and the financial power of this country.

The story of Shenzhen always begins with lyrics from a song: “In 1979, an old man drew a circle at the South Sea of China” written by Jiang Kairu (“A Story of Spring”). The old man, Deng Xiaoping, still enjoyed a prestigious reputation among old generations because of opening China to foreign investment and the global market, and supporting the market economy. If Shenzhen is the circle, then for many people, Deng is the designer that drew it. As the first special economic zone established in China, Shenzhen developed from a small town in Guangdong Province to a metropolis with more than fifteen million people. The sudden increase in population from different areas makes Shenzhen a diverse and vibrant city in China, and it ranks 22 in Global Financial Centres Index, even above Beijing (“GFCI”).

The paper attempts to offer a comprehensive review and assessment of China’s trade development strategy and trade policy reforms since China initiated its domestic economic reform and open-door policy, and also to analyze the prospect of future reforms, including some challenges that China would need to address in the context of a changing global business environment.

Since the reform and opening-up policy published in China in 1978, Chinese economy boomed in the past decades. China is facing great opportunities with its Chinese features; however, it also brings some negative

China, a continent with around 1.4 billion people have other countries looking because of their economy. Currently, China’s economy is known to be one of the largest manufacturers, merchandise exporter and importer, but also a holder of foreign exchange (CIA,2016). The success happened through gradual economic reforms, opening up new businesses, continuously improving their economic structures, but also being able to invest in a lot of corporate companies (Yang,2016). However this wasn’t the only thing that made China successful there has been a long history in which China was able to achieve this title today. From the early 1970’s, China’s economy was solely based on cheap labor, agriculture, but also rural industries (CIA,2016). This market strategy allowed China’s Gross Domestic Product (GDP) to raise in double figures, and due to the rise in GDP figures the national poverty rate decreased by 679 million people (Yang,2016). Rural industries have been the main contributor to the advancement of the Chinese economy which has allowed entrepreneurs to start up their business with in a small rural private sectors (Yueh,2008).