China in the global economy: A fast growing export country
- A brief summary of the economic reforms that China implemented to integrate in the global economy and the world trade.
- China's activities in the global market: a major export country
- China's export economy in the recent context of crisis
The economy of China is particularly interesting to look at, because China was still over two decades ago a very poor country, whose planned economy didn't allow any improvement for its citizens' standards of living. But after a series of reforms oriented towards the market and initiated by Deng Xiaoping in 1978, China has become one of the greatest examples of economic successes after World War II.
Its economic growth has reached an average 10% per year since then, and the considerable growth of Chinese export in the global market is the most spectacular illustration of China's economic success these recent years. China is a major demographic power, with 1.3 billion inhabitants, and the third largest economy in the world in terms of GDP (US$2.6 billion in 2006) . Even if the country is now facing the global economic slowdown due to the aftermath of the financial crisis, its GDP grew 9% in 2008 from the previous year .
Since the middle of the 1980s, China has liberalized its policies related to trade and foreign investments. Its economy is now almost as open as most of WTO's countries. The country entered this organization on December 11th 2001, after a long negotiation process, which marked the outcome of its opening strategy on the world market. Thanks to both increase in the Foreign Direct Investment (FDI) and the growing China's participation in international trade, the country has known an outstanding economic development. So much so that China no longer belongs to the group of low-income developing countries in the world and, since the end of the 1970s, some 400 million people have been lifted out of poverty, according to the IMF.
We will study here the economic reforms that China performed to make this possible, then we will examine China's export activities in the world trade and the reason why it has become a major export country, and finally we will look at the stakes this country is facing in this crisis context.
[...] The government seems no longer to try to reduce pollution and income inequality as top priorities, but ?leaders are casting for new strategies to spur domestic demand and wean the Chinese economy off its dependence on rich countries swept up in the global financial crisis.? According to Yardley, the export slowdown is starting to show its impact on Chinese manufacturing plants. Indeed, these recent months, about 7,000 small and medium-sized plants have already shutdown in Shenzhen and Guangdong. And, according to the mayor of Shenzen people have lost their job in the city by November 2008. [...]
[...] Therefore, it gave China a considerable competitive advantage on the global market, because these businesses have been able to offer commoditized goods at very low prices. But the share of this kind of products in China's exports has tended to decline because of the growing exports of hard manufactures like electronic goods, computers and appliances. Nevertheless, large component of this export growth in machinery has largely been due to growth in processing trade - the practice of assembling duty free intermediate inputs?. [...]