Sustainable Growth In China Essay

1464 words - 6 pages

Chinese economic growth in the past few decades has been truly remarkable. Gross Domestic Product (GDP) growth per annum on average reached 9.4% in the period 1978 to 2002, the total GDP in 1998 was 6.4 times the GDP in 1978 . Official stats may overstate growth by understating inflation but growth of at least 6% a year is still quite impressive. Prior to 1949, GDP per head was no higher than in 1820 and between 1949 and 1978, growth was only around 2.3% per capita per annum . China’s Gross National Product (GNP) grew 7.2% annually from 1978 to 1990, averaging 9.7% per capita from 1982 to 1988 and was among the best in the world . However, “past growth is a poor predictor of future performance” and the considerable volatility in China’s economic growth has prompted the question whether this growth is genuinely sustainable. China’s high savings rate, its advantages as a developing country, as well as its disciplined and literate labour force should prove its critics wrong. However, there are other underlying factors which determine the sustainability of growth such as the type of growth, the state of the environment and the transition of the economy from planned to market. China’s growth may not appear to be as sustainable when these factors are also taken into account.
The Chinese economy has some of the highest saving rates in the world, it averaged 37% of GDP between 1978 and 1995 . The stable and high savings rate supports vigorous rates of investment and capital accumulation – crucial for economic growth. Households currently contribute half of total savings. The rapid rise in GDP per capita has reduced the level of subsistence consumption. Rising aspirations have led to people saving a greater proportion of their income. Examples include the increasing availability of imported consumer goods and the desire to provide a better education for their children. Another explanation for the rise in the savings rate is the change in demographics. As life expectancy rises, there is a strong incentive for workers to save for their retirement as pension benefits may be inadequate due to rising living costs. In addition, declining fertility and the one-child policy has meant an absence of children to depend upon financially in old age. Trends like these will most likely continue as the Chinese economy becomes more open and as the dependency ratio rises. Therefore, the Chinese economy can expect economic growth which results from a high savings rate far into the future.
As China is a developing economy, it has a “backwardness” advantage. According to World Bank estimates, poor countries have tendencies to grow more rapidly than rich ones, controlling differences in educational attainment, savings and population growth . A developing country such as China has technological levels lagging far behind that of developed countries. It is then possible for China to adapt technological knowledge from advanced economies at a relatively lower cost in order to...

Find Another Essay On Sustainable Growth in China

Energy issues in a growing china - a bottleneck for further economic growth ?

1770 words - 7 pages 1.0 Introduction25 years of economic reforms and growth unsurpassed in human history has made china the freight train economy of the world. China is not the biggest economy, but given time, there is no argument that china will be. However, in any given developing country there are several bottlenecks on important resources which can seriously hinder or even stagnate the economic development. In this report, the student will look at what issues

The Fall of The Orient Essay

1349 words - 6 pages The Fall of The Orient. Zhiwu Chen, a professor of Finance at Yale School of Management, had once addressed two pivotal questions to the world: “Why has China’s economy grown at such a fast rate during the last 30 years, and is this growth rate sustainable?” Over the past decades, China’s uprising as a huge economy power was undeniably prominent, first in Asia and then to the eyes of the world. The most popular answer as the world knows it is

The Import of China for Recent 10 Years

2413 words - 10 pages country in the world. Even though when the world economic was in economic recession and depression and crashing in economic crisis, China however still maintain in the sustainable economy growth. To a certain extent, the fast growing export performance of China plays a significantly important role in the advanced of the economic development. For a long time, the prosperous economic environment in China is not only made China a more attractive

Expanding Business Globally

1214 words - 5 pages , their policies and practices focused on the environment, health and safety standards and processes. Alcoa has continued to ensure their values; principles and human rights position are maintained while "…acknowledging the country's unique regulatory environmental and social-economic circumstances." Alcoa expects double-digit growth and supply and demand that is more balanced in their industry in China. Alcoa understood the technological

Aging population in China, Japan and Korea

1286 words - 5 pages China, Japan and Korea have lots of similarities; such as they start economic development and growth within a short period of time, which is 1960s of Japan, Korea in1970s and China had economic reform since 1978. They have successfully controlled their population growth which population transition from high birth rate to low birth rates in a short period of time. Population aging is one of the social issues which they are facing. This essay will

Revaluation of the Chinese Yuan

826 words - 3 pages slowed to approximately 15% with commodity prices high, companies' margins, thus, being squeezed. Property prices also moderated after a period of extraordinary growth.China's government officials and policy makers also reacted in decisive and prudent ways to control growth and have resorted to market driven measures to control growth at sustainable levels. For instance, China increased interest rates (last October) to hold back money and credit

The Environment and Economy: An Emerging Balance in China

1286 words - 5 pages the economy with environmental preservation, which may ultimately lead to increased development through sustainable policy. When Mao Zedong first rose to power, the notion of economic growth over environmental protection was instilled in the nation. Moreover, nature was perceived as “an enemy to be vanquished, not an ally to be cultivated”, and this philosophy was later espoused by Deng Xiaoping (11). In his work, What Does China Think, Mark

Energy Crisis in China

1265 words - 5 pages a political problem, the decrease of the economic growth and the poverty are the three main causes. People always say that China has abundant energy resources in their region, and many types of metallic and nonmetallic mineral resources. There are more than 20 kinds of mineral resources account for 50% or more of the total in China (China Mining Association (CMA)). Therefore, why China does suffered from the problem of energy shortage? China

China's Impact on European Trade

3124 words - 12 pages in their economy. No doubt that China has a great influence in the global trade flow. So, China is expected to lead the world to a more transparent and open economy.The challenges of sustainable growthDespite the China economy success, challenges still lies in China. Its competitiveness as an exporter cannot hide the structural problems that the country faces. There are also disadvantages for a country to have rapid growth. Other social problems

Resource Shortage Paper

1011 words - 4 pages Law aided in the protection and rational utilization of water resources. The Basic Environmental Act in 2002 was established to raise the quality of the environment, preserve environmental resources, and pursue sustainable development by promoting environmental protection. Based on some of the actual situations in China today, all this legislation appears meaningless.In 1998 China spent 8.7 billion on environmental protection, a 43.7 percent

The Global Water Shortage

1351 words - 5 pages -saving society, because those solutions will save people’s lives, the environment and sustain economic development. The China’s most important and serious problem is water shortage and this problem will not stop if solutions are not found quickly. So, there are some of the main causes of the water scarcity in China: first of all, it is water over-use. This is because of the growth of population and people’s increase of demand for

Similar Essays

Essay About 3 Countries In Africa. About Their Sustainable Growth

1320 words - 5 pages doing moderately. Education is the first thing that a country has to achieve. Once they attain education, then they may work on other areas such as governmental issues. Then, when the country has a secure government and laws, they may go to health care, or economical issues. None of these things would be able to happen if the country wasn't adequate in education.I think the country in Africa that is most likely to have sustainable growth is Gabon

The Effects Of Population Growth In China

2336 words - 9 pages prediction had come true. This led to the overcrowding and hunger in China that still is evident today. The worst overcrowding was along the China's eastern coast. Finally, Mao Zedong realized that his ideas led to a lot problems. He came up with the new policy. He urged that each family to have no more than two (2) children. The idea of Mao Zedong had was an effort to slow down the population growth, but the overpopulation in China

The Problems Of Population Growth In China

1261 words - 5 pages China is a developing country with the biggest population in the world. Based on 2008 research data about Chinese population, China has over 1.3 billion people (1,330,044,605 as of mid-2008), and it becomes the world's most populous country (Matt, 2008). The excessive population growth has been brought contradictions and serious problems such as environment pollutions, social problems like housing, employment and education. The Chinese

China Set To Cool Off Its Growth. An Essay About The Recent High Levels Of Economic Growth In China. Economics

638 words - 3 pages China set to cool off its Growth.China is experiencing large economic growth to the point where it may not be sustainable without equally large inflation. But any reduction in rate of Chinese economy's growth will have little effects on neighboring Asian economies due in part to the current and anticipated growth of both U.S. and Japanese economies anticipated. It appears that the Chinese government is trying to take preemptive, measures