Factors Affecting the Economic Growth of China

Factors Affecting the Economic Growth of China

Introduction

The most classic and traditional measure to evaluate the economic growth of a country is to measure the growth of its Gross Domestic Product - GDP. However, when you want to make international comparisons the most effective method is the method of purchasing power parity. Other methods using the exchange rate usually suffer biases due to speculation in the foreign exchange market or exchange rate policies. Moreover, the exchange rate does not take into account the non-tradable internationally, such as services, which includes common buying patterns (Becker, 2012).

China's sustained and rapid economic growth has attracted global attention. From the beginning of reform and opening up to now, so many years, the average annual GDP growth rate is maintained at 9.3% from the period of 2001 to 2005. China's average annual GDP growth rate is 9.5%, which is 5.7 percentage points higher than the world average 3.8%. Moreover, this is 7.4 percentage points higher than the average of developed countries, which represents 2.1%.

The amount of labor and equipment is an indicator of the country's supply of capital. The amount of capital in the economy is one factor that determines its rate of economic growth. China has become the long period of the fastest growing countries in the world economic development (Constant, 2011). According to data released by the World Bank from 2000 to 2004, China's economic growth in the average contribution to the world GDP growth rate of 14.3%, second only to the United States, came in second place. The Chinese economy has become one of the important driving forces for world economic growth.

Discussion

China in the early twentieth century was not a modern country. In the country, there was no sufficient healthcare or education in the country; moreover, the food production was insufficient as well. The communist revolution even more unfortunately, plunged the country. Conducted an independent economic policy, but led socialist economy. Since 1978, a gradual shift away from Marxian socialism. In 1992, China abandoned central planning. Evaluation of the achievements of this country is extremely complicated, if only because it must include the various economic systems. Undoubted success is achieved through literacy rate reaching 78% of the public in relation to the almost total illiteracy after the Second World War.

The economic growth of China was derived through sustain, rapid, and stable development in the country, which soon attracted the attention of the whole world. Strategic Factors facing China continued rapid growth, but more importantly, speed and the actual growth factor are recognized as follows:

First, the speed concept of virtual;

Second, domestic demand and rural strategic base;

Third, the pressure on resources, the environment protection and conservation mechanisms;

Fourth, the international competitiveness of enterprises, international cooperation and international environmental issues;

Fifth, the development of the private economy, the system of government and economic vitality

While the developed countries have to learn from experience, but have their own special environment, however, in accordance with China's national conditions, it is considered that their own strategic factors ...