China's political and commercial development really took off after it gained independence from Japan following World War II. The International Monetary Fund (IMF) has ranked China as one of the most fiscally powerful nations. (Chen, 1999). The Politburo Standing Committee of the party congress, which consists of seven people, is the governing body in China's non-monolithic political structure. After five years, the Chinese pick their leaders. The rise of China's economy and political status can be attributed to a number of important reasons, including the country's increased productivity, opening up to the rest of the world, extensive reforms, anti-corruption drives, and transitional leadership. Expanding borders to the rest of the world and its large number of reforms, anti-corruption campaigns and transitional leadership.
Expanding borders to the rest of the world
Being the most important factor, it allowed for Foreign Direct Investment (FDI) to occur. Before 1978, investment in Chinese firms was very difficult, especially as a foreigner. Difficulty in investment discouraged the majority of foreigners until after 1978 when China expanded its borders. In addition, opening its borders allowed China to gain from trade and benefit from its compared advantage (Chen, 1999). The expansion allowed China to enjoy benefits of its still production industry because if it were allowed to have domestic production of ore, China would have been unable to meet the world’s demand for steel. Therefore, expansion of borders allowed China to import iron ore from abroad enabling China to control 50% of the steel market.
Growth in China’s productivity, Capital and Technology
Stock capital in China grew by 7% between the period 1979 and 1994. A higher stock capital made it possible for China to increase its output and productivity. The increase in the stock capital attributed greatly to Foreign Direct Investment (FDI) (Wu, Edgar, 2006). Labor productivity also increased hence an increase in labor productivity led to an increase in productivity. Therefore an increase of productivity by an average worker which is caused by an increase in the level of education would result in the ability of the worker to produce certain good in a set period. This indicated that although the number of workers remained the same, the effectiveness of the same workers increased over time. Increase in productivity was beneficial to China’s economy in that it attracts Foreign Direct Investment which increased capital investment. China’s labor productivity grew by 3.9% per year.
Large Number of Reforms
An increase in China’s labor force attributed to an increase in these reforms. These reforms helped China to transform from an agricultural based country to a manufacturing country (Chen, 1999). The labor force was on 80% of agriculture before 1978, but by 1994, agriculture had dropped by 50%, and manufacturing had risen. The reforms helped Chinese people to transform into modern beliefs and techniques. The transformation in beliefs perceived the movement from old-fashioned methods of mining and farming into modern techniques which yielded more and was more efficient.
Factors that have allowed China to emerge today
Population policy
China has a policy of one-child-per-family in order to carb unnecessary population. Success in fertility rate control has aided since the population is the optimal determinant of China’s growth potential in the long term. China’s prosperity is connected to the population policy, however, age distribution pose problems concerning productivity in the future (Fewsmith, 2010).
Anti-corruption campaigns
Former president of China Hu Jinping led a campaign on corruption in China which was also adopted by Xi Jinping avoiding corruption at all costs. Despite these efforts, some government officials still engaged in corruption and faced punishment imposed by the president (Fewsmith, 2010). This led to a firm country economically and politically as well. Anti-corruption campaigns and drives are serious and admirable in China.
Poverty Reduction
China has successfully uplifted a lot of peasants from poverty level and being the most successful country in poverty reduction (Fewsmith, 2010). Annexation of Hong Kong has also made poverty reduction feasible. Development of growth zones such as Shanghai has attracted FDI and investment of human capital such as education in colleges.
References
Chen, W. (1999). The political economy of rural development in China, 1978-1999. Westport, Conn. [u.a.: Praeger.
Fewsmith, J. (2010). China today, China tomorrow: Domestic politics, economy, and society. Lanham, Md: Rowman & Littlefield Publishers.
Wu, Y., & International Conference on "Transition, Growth, and Globalization in China:. (2006). Economic growth, transition and globalization in China: Advances in Chinese economic studies. Cheltenham: Edward Elgar.
