China case study

Question 1

China positives

Answer 1

Made rapid progress in economic and human development by reforming its economy to become ‘market driven’

China has become very integrated with the global economy through international trade & foreign investments. resulted in sustained increase in per capita income → improvemnts in living standards & reduction in poverty.

Question 2

China and economic growth positive

Answer 2

The main indicators of globalisation including investment flows and international trade have elevated China’s economic activity by boosting the productivity and technical efficiency of firms who receive opportunities to obtain funds and access the wider international consumer market.

Additionally, the exposure of businesses to global markets and foreign investors through reductions in protective barriers and the financial deregulations of FDI flows has subjected domestic firms to the demand of foreign consumers,* prompting a growth in domestic supply with 12.4% of world exports were composed of China’s exports. *

Question 3

China and economic growth negative

Answer 3

As exporting industries in China became reliant on foreign consumers, the synchronization of business cycles exposed China to international downturns. Economic conditions in China are directly influenced by the state of its major trading partners, as evident in the 2020 GDP contractions during the COVID pandemic, highlighting China’s dependence on the global supply chain.

Question 4

Open door policy

Answer 4

in 1980 an open door policy was adpotted towards trade & investment with SEZ’s established in southern & eastern coastal provinces of China. These SEZ’S attracted foreign investment by MNC’s through various incentives (low tax rates, cheap labour & power,less stringent government regulations)

1. SEZs became highly efficient areas of rapid manufacturing growth that promoted external economies of scale with new developments of infrastructure & hubs for global trade.
2. gave access to foreign capital, encouraged and allowed FDI and technology transfers along with an inflow of management skills
3. rapid growth impacted environment with widespread pollution. china has become world’s second largest emitter of greenhouse gases.

Question 5

China’s economic reform strategy

Answer 5

Deng Xiao Ping implemented economic reforms between 1978 and 1997 to improve China’s eocnomic performance → based on achieving rapid industrialisation & modernisation by sustaining high rates of economic growth to raise living standards.

Question 6

Belt and road intiative

Answer 6

Est 2013, BRI promote flow of goods and investment across the Eurasia
1. construction of new trade routes increases connectivity & lower cost of trade transportation → boosting growth through China’s lower income provinces

2. Increased connectivity between China and Eurasia will amplify China’s status → more countries become more reliant as they forge both economic and political bonds with China
3. Expansion of Chinese infrastructure e.g railways and telecommunications in rural regions in order to increase job opportunities (180,000 jobs created)
   - Improvements to income inequality China’s Gini co–efficient decreasing from 0.473 in 2013 to 0.465 in 2019 (disposable incomes in rural regions increased by $1000 within 6 years → improves standards of living