This leads to economic growth of 10% annually. By adopting a mixed economy China is leading successfully. The Government of china has retain strong control over investments and allowed a limited private competition. This results in removing the deficiencies of capitalism and communism.
Those countries which follow free trade and non liberal path, dominates the economy like China. The China's success proof is its GDP statistics. Since 1978, the GDP has been double digits. However this progress has lead to number of challenges China is facing nowadays. These are financial crisis world wide, incompetent banking system, over reliance on exports, inflationary pressures, widening income inequalities etc. In order to create a harmonious society, China Government has to over come these issues. Furthermore trade and foreign investment plays a dramatic role in this revolution. The trade of goods has double so far. Large trade surplus, direct flow of foreign investments and heavy purchases of foreign currency makes China the biggest foreign currency reservoir holder.
Two factors contributed tremendously to the growth of economy in China. One is Heavy Capital investment either by domestic savings or by foreign investments. And second factor is quick yield growth. This revolution leads higher effectiveness which improves the output. The result is increased resources for extra investments in the economy. ...Show more