The Macro & Microeconomic Of China Essay Example | Topics and Well Written Essays - 2000 words

The Macro & Microeconomic Of China - Essay Example The Macro & Microeconomic Of China China has become a good model for ongoing rapid growth for a developing country as a whole. Compared to a developed country’s performance like the USA, its growth has been more than 300% as of the most recent year. There have been envious criticisms about Chinese ways of progressing. Are such accusations like currency manipulation and piracy of intellectual property the real reasons for such rapid economic growth? If not what enabled China to sustain its growth and to comparatively maintain low unemployment rates? The hypothesis to be proven in this term paper is that China, although ruled by the Communist Party which practices dictatorship up to a certain extent, was able to draw a general cooperation from among the majority of people. Its culture was actually practicing some aspects of democracy and genuine concern by the government for the welfare of the Chinese people. From its vast manpower resource, and the willingness of the government to fund the people’s productive endeavours, the aggregate productivity soared to great heights and was able to make China very competitive in meeting the global demand for goods and services. In other words, there were reforms (Fosu 2013, p.154) fro m harsh dictatorial rule in the past, to rational approaches in government transactions with people within China and in the international community. This paper also provides recommendations for other developing and developed countries to consider for adoption, as well as recommendations how China can further improve its socio-economic acceptance worldwide in spite of being a Communistic country. From State-Owned Enterprises to Restructured Business Enterprises Dosi et. al. (2013) described the companies in Mainland China to be made up of seven categories of ownership under the reformed or restructured economy, namely, (1) the State-Owned enterprises, (2) foreign-invested made up of foreign Multinational Corporations (MNC)s and Joint Ventures (JVs), (3)private-owned enterprises (POEs), (4)shareholding enterprises, (5)collective-owned enterprises (COEs), (6) Hongkong, Macau, and Taiwan invested enterprises (HMTs), and (7) Other Domestic Enterprises (ODEs). Details of businesses are fu rther identified in Figure 5 of the Appendix Section. These businesses became parts of the economy not instantly with one decision, but gradually over the years since 1978. The chronological reforms are as follows: Years Developments in terms of economic reforms 1978-1984 Stage 1. State-Owned Enterprises (SOEs) were decentralized. Both profits and power were transferred to the private sector. But government still ruled over the contracted businesses to the private sector. There were discouraging restrictions against foreign investors prior to 1978. (p.5) 1979 to mid-1980s A law on Joint Ventures enabled foreign investors to share technology with SOEs. Four (4) SEZz or Special Economic Zones were opened. Businesses were still restricted in the domestic market. Production was for export business operations. (p.5) 1985-1992 The government separated itself from the management of contracted businesses. Prior to this, SOE were controlled ultimately by the government. And there was only so me delegation of management rights. SOEs experienced net losses up to 1997, This brought about a policy to let go of the small business activities still under government control and to simply maintain the big sectors like monopolistic enterprises (e.g. energy and other natural resources). 1994 Parts