China's Growth

The global economy consists of all countries in the world at different stages of economic development that produce goods and services and contribute to the world GDP. The global economy is divided into four categories of countries AIE’s, NIE’s, LDC’s and TEC’s. Collectively the GWP IS $61 trillion. The most impressive growth has been china. China has generated impressive 8-10% GDP in the last 10 years while reducing poverty however this has come to a cost to the environment.

Economic growth refers to an increase in value of goods and services produced by an economy, high income and living standards which leads to an increase in aggregate demand and full employment. Whereas Economic development refers to structural changes needed in the economy in order to promote economic growth and development. The Chinese economy has undergone 3 phases: 1949-77/ 1978-00/2001+. Those phases have contributed on achieving high economic development and economic growth up till now in the chine economy.

The 1st strategy used in china to promote high economic growth and development was to close the economy in (Phase 1: 1949- 1977). This strategy was unsuccessful because there were more negatives than positive effects on growth and development. The negatives regarding economic growth and development were china’s economic system as a planned economy, government allocated resources and all the private firms, and banks were nationalized and this wasn’t efficient. In rural zones farms were collectivized , price and wage systems were fixed , as well as imports and export prices were fixed .china suffered famine and poverty with their “ great lap forward” which attempted to industrial agriculture and industry but it wasn’t successful and the “ cultural revolution” which was a political reform to over throw the communist party . Those strategies had a negative impact on the Chinese economy and social life. The country couldn’t trade; the heavy industries were inefficient, low worker...