Economy of China

economy of the country

The economy of China is a Mixed Socialist market economy composed primarily of state-owned enterprises and that uses economic planning, while still allowing for many private businesses to flourish, as well as private investment.

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  • After the Japanese withdrew, the combination of the communists’ proven nationalist fervor and their program for wealth redistribution resulted in a mounting tide of popular support. This support facilitated the relatively quick defeat of the GMD, and the People’s Republic of China was established on October 1, 1949. Subsequently China collectivized its agricultural, industrial, and commercial systems. After Mao died in 1976, China’s new leaders embarked on a policy of economic reform, including the personal responsibility system and market socialism. Innovations involved allowing farmers to cultivate land for personal profit at prices set by market demand (once state quotas were met), permitting privately owned businesses, and allowing state-controlled foreign investment.
    • James DeFronzo, Revolutions and Revolutionary Movements (2018), p. 319
  • The economic reforms and related government policies unleashed spectacular economic growth. As China’s economy rapidly expanded, so did its need for energy, and after 1993 China dramatically increased oil imports. The booming economy permitted some citizens to become enormously rich while drastically reducing the percentage of the country’s people living in poverty. It also led to major environmental problems. Partly because China has made enormous economic progress and has improved the lives of the large majority of its people, the government appears to enjoy significantly more popular support currently than it did in the late 1980s. Contemporary public protests center on issues that have arisen from economic reforms or have resulted from the accompanying excesses and corruption. Many demonstrators appeal to national officials for help in combating local problems, and in recent years the central government has responded with policies to address some of their major concerns, like improving conditions for people migrating from rural areas to cities and reducing air and water pollution. Political change in China, including democratization, appears to be an ongoing but long-term process.
    • James DeFronzo, Revolutions and Revolutionary Movements (2018), p. 320
  • The financial fallout would be far reaching. Evergrande reportedly owes money to around 171 domestic banks and 121 other financial firms
  • China's fourteen percent growth rate does not mean it's going to be a world power. It means that coastal China, where the economic growth is taking place, is joining the rest of the Pacific Rim. The disparity with inland China is intensifying.
  • [It would be] naive to think that the turmoil in the market doesn’t have the potential to have second-order and third-order impact. Clearly with the changes that are taking place in the Evergrande situation, it’s concerning.
  • The problem is that you don’t restructure the world without restructuring the Chinese economy and you can’t restructure the Chinese economy without restructuring the political system all the way up to the very tippy top. The people at the tippy top have some say in how that all goes down... the question is how much.
  • In China, moneycapital, to be more technical – is considered a political good, and it only has value if it can be used to achieve political goals. Common concepts in the advanced world such as rates of return or profit margins simply don’t exist in China, especially for the state owned enterprises (of which there are many) and other favored corporate giants that act as pillars of the economy. Does this generate growth? Sure. Explosive growth? Absolutely. Provide anyone with a bottomless supply of zero (or even subzero) percent loans and of course they’ll be able to employ scads of people and produce tsunamis of products and wash away any and all competition.

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