The Chinese Economy

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A presentation on the economy of China and its growth through the decades.

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The Chinese Economy

  1. 1. From Communism To ‘Social’ Capitalism
  2. 2. China: An Introduction <ul><li>Chinese Civil War ended in 1949 </li></ul><ul><li>Communist Party of China came to power </li></ul><ul><li>Started out on a socialist path </li></ul><ul><li>Complete government control on market </li></ul><ul><li>Adopted ‘Market socialism’ in 1977 </li></ul>
  3. 3. The Economy of China <ul><li>GDP : $4.33 trillion </li></ul><ul><li>Industrial Contribution: 48% </li></ul><ul><li>Focus on government control of markets and firms till 1977 </li></ul><ul><li>Political ideology shaped economic discourse </li></ul>
  4. 4. Chinese Economy: 1949 - 1980 <ul><li>Big Push Strategy: Socialist Heavy Industry </li></ul><ul><li>Abolition of private ownership </li></ul><ul><li>Government controlled land and labor </li></ul><ul><li>Technologically sophisticated, large-scale, capital-intensive plants were setup </li></ul>
  5. 5. Chinese Economy: 1980 - 1990 <ul><li>New perspective: Economic policy separated from ideology </li></ul><ul><li>Focus on raising personal income and consumption </li></ul><ul><li>Private ownership, enterprises encouraged (SEZ) </li></ul><ul><li>Move towards are a market economy with government controlling heavy industries </li></ul>
  6. 6. Chinese Economy: 1990 - 2000 <ul><li>Move towards a ‘Socialist Market Economy’ </li></ul><ul><li>Government followed “Grasping the large, letting the small go” philosophy </li></ul><ul><li>Self-sufficiency in food, double real income per capita, </li></ul><ul><li>Boom in private sector, encouragement of competition even with state owned enterprises </li></ul>
  7. 7. Chinese Economy: 2000 - Now <ul><li>Focus on more balanced wealth distribution and improved education, medical care, and social security </li></ul><ul><li>Over 10% growth in GDP in 2003, 2004 and 2005 </li></ul><ul><li>Rising inequality of income – 35% live under $2/day </li></ul><ul><li>Future problems: ageing population, acute environmental damage due to industries </li></ul>
  8. 8. Chinese Economy: Govt. Role <ul><li>Government planned and managed the economy since 1949 </li></ul><ul><li>Top-down flow of command – 100+ ministries for economic activities </li></ul><ul><li>Gradual reduction in government role since 1978 reforms </li></ul><ul><li>FDI has increased, SMEs dominated by private sector </li></ul>
  9. 9. Chinese Economy: Problems <ul><li>Systematic problems: corruption, environment issues, underemployment, unemployment </li></ul><ul><li>Steady increase in inflation rates on an year-on-year basis </li></ul><ul><li>Shortage of gasoline and diesel fuel </li></ul><ul><li>Food shortages following February 2008 storms </li></ul>
  10. 10. Thank You The Chinese Economy

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