What are some of the reasons behind the successful performance of China as a leading economy of the world?
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Answer:
The answer to this question is not complicated but just basic economics. Or more precisely basic market economics. China simply followed the path that was taken by first Japan, Hong Kong and Taiwan in the 1950s and then Korea, Thailand, Malaysia, Singapore and others in the 1960s and is now also being taken by Vietnam, Bangladesh, India and others. The scenario is basically the same with the exact same ingredients with just a little local flavour to spice things up a little.
First ingredient is lots of cheap land open for factory development. In China this was speeded up by the Communist Party’s willingness to use force to remove any locals who did not like being told to vacate the wanted land which their family had lived on for decades. Since the Chinese Communist Party owns all the land in China outright with Chinese citizens being only leaseholders this was not a legal problem. Except maybe a moral one.
The second ingredient is lots of cheap labour ready and eager to be employed in developed factories. After 30 years of Chinese Communist Party misrule, madness and chaos the Chinese worker was poor and getting poorer and earned some of the lowest wages in the world. Also there was a lot of them thanks to the family planning policies set in place in the 1950’s and 1960’s. Chinese people are legendary for their industrious and capacity for hard work and this plus the low wages made them a highly attractive pool of labour.
Third ingredient is access to cheap capital for investment. In China’s case this was managed in two ways. First the Communist Party leadership designated certain geographic zones mainly along the coast that would be opened to foreign investment. Investment capital began to flow in from the large Chinese diaspora around the world and from Japan, Hong Kong, Korea, Taiwan and others eager to take advantage of the economic potential of China. This capital investment was so successful that the party leadership eventually extended the investment zone to include all of mainland China. Secondly the party leadership began to direct state owned banks to provide cheap capital to mainly state owned enterprises but also party approved privately owned Chinese enterprises.
Fourth ingredient is a cheap currency exchange rate against the US dollar. A cheap currency makes a countries exports highly competitive in the global markets.
Fifth ingredient is access to technology and modern industrial and financial practices. China has not had to reinvent the wheel indeed it has not had to invent anything. Everything China needed could simply be bought off the shelf. From modern steel production to mass textile production of cotton shirts and socks, to plastic toys, to microwave ovens, refrigerators, televisions and air-conditioners, and then to motorcycles, computers, mobile phones, cars and trucks and fast trains, the Chinese did not have to invent them just acquire the plans and methods to build them. In this they were helped by an army of millions of foreign technicians and managers who flooded into China from Hong Kong, Japan, Taiwan, Korea and elsewhere to oversee the setting up of factories and the training and instruction of the workers. China has also benefitted from easy access to modern financial planning and accounting practises, taxation and urban planning. All of which it could simply purchase on the open market.
Explanation:
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Answer:
CHINA IS NOW A SUPERPOWER of the world
this have many reasons behind this:-
- The China always makes cheapest things and transport it to its neighbour countries and the citizens of that neighbour countries start selling and buys that cheap thing in place of their country own products gradually the economy of that country is falling down and that neighbour countries have to only sell the Chinese products and the China will raise prices of that things and the China earn very profit .
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