The two way trade in China has grown faster than it's GDP for the last quarter of the century. (Ken Davies, 2000)
After 1979 the Central - Local Relationship was made flexible: This initiated a loose and decentralized management controls over policy making, resource allocation, production issues (Ravi, 2005). The authority of local government people as well as plant supervisors in the industries were increased through the increment in the autonomy of public enterprises. This encouraged the private sector in the services as well as the light manufacturing industry. Foreign trade and investment was increased through a diversification in the banking systems, development of stock markets, and encouragement of the private enterprises (Baizhu & Feng, 2000). An example of localism is that the central government is subjected to severe budget deficits while revenue generation of local is increasing. The budget stood around -7.0% of GDP in 2006.
There has been a trend of changing role of institutions. Structural downsizing of State organs, streamlining departments, and creating institutions like the 'the National Development Planning Commission', 'The State Economic and Trade Commission' and 'Ministry of Commerce' to manage the macroeconomic competitiveness that China is striving to achieve.
According to the purchasing parity as it accounted for 12 per cent of global GDP. Ever since the 1980s the real income has grown approximately 400 per cent per head, and the export import has increased 11 to 13 per cent per year. The manufactured goods constitute 90 per cent of the total exports while the ratio of trade-in-goods to GDP today is around 50 per cent. (Sally, 2004)
Today not only are the Chinese commodities exported to the world a large amount of foreign commodities pouring into China. During the period 1990 to 2001, the world's exports were growing at the rate of 6.3% while in China the exports experienced at 14.9% growth. The import growth rate was 6.5% on average while China had 15.5%. The Chinese products not only prove to be cheap and efficient but also the foreign companies become price competitive by producing in China. (People's Daily Online, 2003)
China's trade liberalism is directly linked to the open investment policies. In 2002 the Foreign Direct Investment was $450 million from $90 million in 1990. It represented 36% GDP of China whereas 6% of the world's total. Most of the FDI stock comes from the manufacturing sector which constitutes about 7% of the world's overall manufacturing. (Sally, 2004)
Despite all the good things about the openness of trade there have been some major macro economic issues that the country is currently facing today.
The first is the external debt issue. In 2005 the three main indicators of external debt were way below the internationally accepted line; this is an alarming situation for a country like China. The external debt as compared to the GDP was 12.63%. Another issue is the public debt. China's public debt was 22.1% of total GDP (2006).
In 2005 Standard and Poor's revised China's credit ratings saying that China had come out of the instability and made progressive reforms and successfully implemented them. The rating increased to A- from BBB+ for levels above the 'non-investment' status that shows S and P's has a more positive of China. Moody's Investors Service has rated China favorably five notches above the non investment status.
Today all eyes are on China's which is the second largest economy and has successfully implemented open door policy in this era of slow economic recovery, and uncertainties. Nevertheless China has become the Asian locomotive for economic growth. (UN, 2003)
Beginning in 1972, the US has viewed the region through its One-China policy (Sutter 11). This policy, according to the United States State Department, that both the People’s Republic of China and Taiwan maintain the existence of only one China, in addition to, the people of Taiwan being part of China.
Most of the western companies are moving their factories there as they see more potential to earn profit there because of low labor costs. And link to world's largest consumer market. From Proctor & Gamble to Volkswagen, the Shenzhen has 58,000 joint venture corporations.
The investigator examines the foreign policy of China. It should be noted that China is still a one-party state ruled by the communist party. Besides, China has a “new political ideology” in former President Jiang Zemin's ‘Three Represents theory’, which is now starting to catch on with the Chinese masses after almost three years of nonstop official propaganda.
The policy, which limits couples to one child, was designated as a 'temporary measure', but it is yet practiced in the nation today, even after a quarter-century since its establishment. "China's one child family policy, which was first announced in 1979, has remained in place despite the extraordinary political and social changes that have occurred over the past two decades.
In order to sustain development in the country, the Politburo believes that previous efforts are not enough when protecting the country from the global economic downturn. As the country's exports begin to slow, its real estate industry weakens, and the lost in the China's stock market by about three-fifths of its value, the decision-making body believes that the loosening monetary policy is appropriate.
This commercial relationship between Taiwan and China as a result of favourable environment available to investors and business people at both the sides is leading towards an integration of these countries' mutual economic benefits. The ascending trading activities between Taiwan and China are further corroborated by the cultural and social similarities among people at both the sides.
Reforms in the financial architecture of the country would certainly help since they would allow the country to have a more flexible exchange rate and revamp the banking sector. These measures have to be taken since China is not without its own problems which are political, social as well as economic.
It opposed the global economic order, political order and the major global institutions such as the IMF and the World Bank before the reforms started in China (Overholt, p.3). Earlier, China like socialist countries perceived globalization as a product of
pen Door policy is the most serious reform toward this direction that China has implemented where foreign investments and the opening of certain institutions within the region has stimulated business. Geographic opening started in 1979 with the former province of Guangdong more
The economic growth registered in 2014, at just 7.4 percent, is the lowest growth level that had been tallied for the country in more than two decades. Other indicators of the economy, such as demand for commodities like steel, and
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