|Abstract the purpose of this paper is to present China as a nation that has gone through several economic phases until it | |reaches a point that has made several consider this country as a promising future power in the region. While Japan is falling| |into recession and much of Europe mired in one, greater China has the fastest-growing regional economy in the world. Growth | |rates in greater China look fantastic by U.S., European or Japanese standards.
China today offers a new look and its | |transformation into a high performing economy is affecting its population. Some think that the reforms are painful but | |necessary. Private sector Chinese leaders hope to increase the pool of middle class. The purging of most of socialism's last | |vestiges will throw many into a desperate search for work and shelter. The income gap between those with the skills and those| |without will widen.
In spite of it all, China's economy is thriving and many are determined to seize the opportunity. | |Introduction beginning in late 1978 the Chinese leadership has been trying to move the economy from a sluggish Soviet-style | |centrally planned economy to a more market-oriented economy but still within a rigid political framework of Communist Party | |control. To this end the authorities switched to a system of household responsibility in agriculture in place of the old | |collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of | |small-scale enterprise in services and light manufacturing.
The result has been a quadrupling of GDP since 1978 (CIA, 1998). | |Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong | |and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods.
On the darker side, the | |leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy, lassitude, corruption) and| |of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central | |controls at intervals. In 1992-97 annual growth of GDP accelerated, particularly in the coastal areas-averaging about 10% | |annually according to official figures (CIA, 1998).
This purpose will analyze the efforts of China's government to restore | |its economy to a more performing one in spite of many challenges. China's Economy: An Overview Over the past 10 years, | |China's GDP has grown at an average annual rate of nearly 10%. Some economists have speculated that China could become the | |world's largest economy at some point in the near future.
However, future economic growth will likely depend on the ability | |of the Chinese government to make significant new reforms. Chinese officials have recently announced major new initiatives to| |reform money-losing state-owned enterprises and China's banking system. China's emergence as a global economic and trade | |power has created economic opportunities for China's trading partners, but has presented several challenges as well. On the | |one hand, China's economic growth has made it an increasingly important trading partner for many nations.
On the other hand, | |China's trade barriers, failure to adopt most multilateral rules on international trade, and the relative absence of the rule| |of law for business activities have often proved to be major barriers for doing business and have been the cause of growing | |tensions with various trading partners, especially the United States (Yifu, 1998). The People's Republic of China is made up | |of twenty-two provinces, five autonomous regions, and four centrally administered cities, and one Special Administrative | |Region. The Making of the Modern Chinese State the PRC is one of only a few countries in the world that is still a Communist | |party-state.
This is a political system which the ruling Communist Party holds a monopoly on political power, claims the | |right to lead or control all government and social institutions, and proclaims allegiance (at least officially) to the | |ideology of Marxism-Leninism. The PRC can be compared with other Communist party-states with which it shares or has shared | |many political and ideological features. Napoleon Bonaparte, emperor of France in the early nineteenth century, is said to | |have remarked "Let China sleep, for when China wakes, it will shake the world."
The growth of China's economy, since Deng | |Xiaoping began his market-oriented reforms in the late 1970s, has been called "one of the century's greatest economic | |miracles". This has in turn, led to, "one of the biggest improvements in human welfare anywhere at any time." During the same| |period, the average income of the Chinese people quadrupled, and although there are still many very poor people in China, | |more than 200 million have been lifted from living in absolute poverty to a level where they have a minimally adequate supply| |of food, clothing and shelter.
The PRC is by far the most important in terms of size and power. The underlying political and | |ideological principles of party-state organization are clearly laid out in China's current constitution. The government of | |the PRC is organizationally and functionally distinct from the Chinese Communist Party (CCP). The power of the Communist | |Party-particularly the nearly unchecked power of the top twenty-five or thirty leaders-is at the heart of governance and | |policy-making in China. The CCP describes the government of the People's Republic as a socialist democracy, which it claims | |is superior to democracy in a capitalist country. The formal structures of the Chinese political system are designed more to | |extend state control of political life than to facilitate citizen participation in politics.
Therefore, people make extensive| |use of their personal connections based on kinship, friendship, and other ties to help ease their contacts with the | |bureaucrats and party officials who wield such enormous power over so many aspects of their lives. Politics in Transition | |There are deep doubts about the ability of the CCP to continue to manage the economy effectively because of its reluctance to| |make even more fundamental changes. Such as extending the market reforms to sectors of the economy that remain under state | |control, like banking and the production of steel and oil. Beyond money, the Internet is also spurring a sense of nationalism| |among many of the Net entrepreneurs.
"This is the first time we see a way we Chinese can catch up," says Jack Ma, head of | |Alibaba.com, an e-commerce site based in Hangzhou. The experience of the newly industrializing countries and other developing| |countries suggest that such pressures are likely to intensify as the economy and society continue to modernize. Consequently,| |at some point in the not-too-distant future, the CCP may again face the challenge of the democratic idea. | | |