ECONOMIC DEVELOPMENT

DEVELOPING COUNTRY ANALYSIS

PROFESSOR: M. GHOSH

October 15, 2008

The Revitalized Empire

A look into China’s economic development

Growth in an economy that has been at a disadvantage in the past is known as economic development; a term generally applied to the increase of prosperity and quality of living in a developing country such as the situation we observe in China’s recent fast paced race to the pinnacle. The success of any countries development can be measured in terms of jobs created and their respective income; as well as its excellence in health and education and human development. China is the perfect example for a country in its prime economic development, due to its large growing population and its ambitious attempt to demonstrate to the world that they are serious and determined to make themselves a world power. Although, with any rising country, there comes its own advantages and disadvantages, such as environmental, medical and political problems which can affect the way the world views the country and its potential for continual growth. Filled with prospect and risk, China offers a great atmosphere for investment and its impact on the world is growing at an exponential rate. To many countries in the world, China is known as the most cost effective country to manufacture goods, which is why many of them tend to import a lot of products from China. The consequence of such great demand for their production, and their large population yearning for wealth, is difficulty in controlling the quality of their products. Without a strict enforcement of rules, manufacturers can get away with making products which may not be healthy for consumers because of the producer’s lack of quality control. When countries receive tainted/contaminated products from China, they will eventually stop purchasing from them due to the dangers of their products. The rush of foreign investment agents in China displays the reality that it is the fastest growing market to be operating in. They are set full steam ahead for what seems to be the fastest growing economy of the 21st century and pressure is upon them to fix all their problems.

Historically, China had been a leading country, impressing the world with its talents in various academic fields such as sciences and the arts. They hit a road bump in the 19th century as the country was in great turmoil due to war and famine; they suffered defeat and humiliation by such countries as Japan, Russia and Britain. The Chinese economy and the country itself began to bloom in the late 20th century, around 1980 China’s leaders decided to take a market-oriented route for economic development. Because of this decision, China’s economic output has multiplied six times what it used to be! Due to the success of the country’s economy, poverty has diminished and the standard of living has increased tenfold. China is located in Eastern Asia and is slightly smaller than the U.S in land mass which carries many natural resources such as coal, natural gas and the world’s largest hydropower potential. China’s per capita income is near $5800, although it is hard to estimate due to the large gap between the rich and the poor. Less than 8% of its population is living under its $1 per day poverty line indicating its extreme increase of living standards, since only twenty five years ago over 50% of their nation was living in poverty. Most of the poor citizens live in rural areas working with agriculture, and the richer families live in urban areas working with manufacturing; although China has recently decided to fund education and health care for its disadvantaged areas. A difference in the poor and rich was inevitable, because of their migratory system named Hukou, residents had to file applications to move between rural and urban areas, which in turn prevented many of the rural citizens from benefiting and prospering from the country’s economic growth; whereas the citizens living along the coast received great opportunity as China opened themselves up to world trade and economic development. Because of their rapidly developing economy; manufacturers have been omitting large amounts of greenhouse gasses into the environment causing intolerable levels of air pollution in cities such as Beijing. This can be dangerous for their economy because tourists will stop visiting the country and the Chinese citizens will develop health issues; for example during the 2008 Beijing Olympics, some athletes denied attending the games because they did not want to be perform in such heavy air pollution. A consequence to growth: China faces severe natural resource scarceness and environmental deterioration, because they do not have the land or natural resources to sustain their growth, they will have to spend a large amount of money importing from other countries in the future, as their own resources run dry and their population expands. Along with a large population, many rampant diseases ran loose in China; 900,000 people are living with aids and the rare avian influenza which is contacted from birds is still alive in the country. Life expectancy for both males and females at birth is around 73 years of age, and the total infant mortality rate is about 21 deaths per 1000 births. China’s human development index which combines life expectancy, adult literacy and standard of living is 0.777 ranked #81 out of 177 countries. China stands as the world’s second largest economy next to the U.S; its creation of stock markets and foreign trade have aided in its current growth.*

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China has many major developmental challenges due to its large population and strong economy; they must focus on a few key points if they wish to maintain a healthy powerhouse. The environment and health issues would be the biggest concerns coming from China today. We have seen recently in the news, the effects of Chinas green house gas pollution, the amount of CO2 it emits into the environment because of its numerous manufacturers, as well as dangerous chemicals being found in their product. The United States imported over $288 billion of products last year from China, and the effect of China ...

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