Factors Affecting the Economic Growth of a China



Factors Affecting the Economic Growth of a China

Introduction

The aim of this assignment is to discuss the Factors Affecting the Economic Growth of China. Growth in China is affected by the global crisis. China is the final stop of a long chain of Asian production that incorporates numerous producers in Korea, Taiwan, Japan, and other countries. China's commercial banks may also suffer because of the difficulty that many international investors have to hedge against the currency risk which had increased the volatility of the Yuan. The contemporary situation in China is of great interest because in the past three decades its development model has led to dramatic growth and an important social change (Carl, 2010).

In 2001, China enters the World Trade Organization (WTO). In 2002, the Communist Party recognizes the role of the private sector and invites entrepreneurs to join. In China, this factor has contributed significantly in the last two decades, the overall economic growth and in particular the export industry. For over a decade, the main challenge for Chinese officials has been an annual growth of at least 8%.

Historical Background of China Economic Growth

By 2006, China was already the fourth largest economy in the world after the U.S., Japan, and Germany, with a total GDP of 2,720 billion. Currently it has become the third largest economy in the world, displacing Germany. The growth of the Chinese economy was even faster in 2007, as GDP grew at a rate of 11.4%. China has managed to maintain a very high economic growth for many years.

China has not had layoffs, even as the economy has slowed for seven consecutive months. According to official figures released, China's growth fell to 7.4% annually in the third quarter. If the issue of inflation is essential for social stability, it is not the only concern of the government. Chinese industrial production was recorded in April 9.3% increase. This is the lowest increase in three years. Is the lowest figure for three years. This proves that the growth of the second largest economy is weaker than expected (Wang, 2010).

Factors Affecting Growth and Impacts on China

For over a decade, the main challenge for Chinese officials has been an annual growth of at least 8%. The prospect of growth to fall below this limit filled them with fear because they thought it was a level below which would create massive unemployment and uncontrollable social unrest. Eventually could mean the fall of the Communist Party. But this year, for the first time China will point below that goal and recorded their slowest growth since 1999, when the economy grew at an annual rate of 7.6%. If GDP comes to be below 7.6%, it would be the slowest pace since 1990. This possibility is real GDP growth for the first three quarters of this year was only 7.7%, compared with 9.3% in 201. But something has definitely changed in Beijing, where far from obsessed and do everything possible to accelerate the pace, the ...