The Driving Forces of China’s Rapid Economic Emergence
The Driving Forces of China's Rapid Economic Emergence
China’s economic position during the pre-1978 era was characterized by steady growth levels of six percent a year, with a myriad of ups and downs. The economic status of the country has, however, improved post-1978, with growth levels of 9 percent annually, and minimal constraints (Hu & Khan, 1997). Several peak years have witnessed growth levels of up to 13 percent, with the country's per capita income quadrupling in the last 15 years (Hu & Khan, 1997). Such growth levels, as witnessed post-1978, inform logical assumptions that the country’s economy is likely to grow larger in the next 20 years as compared to that of the United States. Ideally, this shift in economic growth is attributed to primary factors like capital accumulation, due to the increase in available capital assets in the country, new factories and supporting machinery, as well as the development of communication systems. However, a tremendous increase in the country’s productivity levels owing to high employee efficiency is the principal reason for the country’s economic boom.
At the end of 1970, Chinese policy makers initiated a series of incentives to maximize the country’s domestic growth by pursuing a well-structured economic development model. Application of the model has facilitated an increase in the country’s gross domestic product, reduced mainstream poverty, and initiated significant gains in the world shares. Among the key characteristics of the model is that it is highly producer biased with a need to increase the country’s investment and export levels. This is informed by the government’s need to ensure a stable exchange currency and offer direct support to state and government firms (Dorrucci,Pula & Santabárbara, 2013). During their early development stages, the government attempted to provide substantive support to state-owned enterprises so that they...