Economic Reform of China Essay Example | Topics and Well Written Essays - 1250 words

Economic Reform of China - Essay faceThis leads to economic branch of 10% annually. By adopting a mixed economy China is leading successfully. The political sympathies of china has retain strong control over investments and allowed a limited private competition. This results in removing the deficiencies of capitalist economy and communism.Those countries which follow free trade and non liberal path, dominates the economy like China. The Chinas success proof is its gross domestic product statistics. Since 1978, the GDP has been double digits. However this progress has lead to number of challenges China is facing nowadays. These are financial crisis realism wide, incompetent banking system, over reliance on exports, inflationary pressures, widening income inequalities etc. In order to stool a harmonious society, China Government has to over come these issues. Furthermore trade and foreign investment plays a dramatic role in this re untestedal. The trade of goods has double so fa r. Large trade surplus, propose flow of foreign investments and heavy purchases of foreign currency makes China the biggest foreign currency reservoir holder. both factors contributed staggeringly to the growth of economy in China. One is Heavy Capital investment either by domestic savings or by foreign investments. And second factor is quick yield growth. This renewal leads high effectiveness which improves the output. The result is increased resources for extra investments in the economy. Moreover China has a higher rate of saving, as most Chinese has saved a lot by producing profit from say owned enterprises. As a result savings as percentage to GDP has raised trem closeously upto 50% which is highest rate in the world. Another factor which plays a study role in this revolution in China is Productivity gains. The enhancement in output is because of allocation of resources to the productive uses specially trade, serve and agriculture sectors. The government authorities were allowed to establish various enterprises on market rules. Direct Foreign Investments with its new technologies boosted the economy as well. DIRECT FOREIGN INVESTMENTS IN CHINAThe major factor for Chinas economic growth is Direct Foreign Investments. Chinas FDI usage has expanded from $636 million to $75 billion by the end of 2007.Manufacturing is the major part of the economy where larger portion of FDI are utilized. Almost 55% of total FDI is consumed up for manufacturing which leads 610,000 companies to curl and almost 28 million people will be engaged by these firms. CHINA craft PATTERNSChina becomes the trading power in result of economic revolution. Chinese exports were $1218 billion by the end of 2007 and its imports were $956 billions. China has grown dramatically during past years with average annual growth rate is 29%. Imports over this