China Economy - Made in China Essay

Introduction

China has become a world economic power whose progress seems to have no limits. Just one look around and we can notice the ubiquitous phrase "Made in China" printed on most devices we use daily; from the multifunction computer, to the simple glass that you use to drink water. Such a country whose population is the highest on the planet simply has become the world's factory. Their level of economic development has been such that it has managed to play and unseat the United States in its global hegemony.

This situation would never have been predicted years ago; taking into consideration the stability and superiority of the United States economy at the time. With an unprecedented push, China slowly escalated into the world economic stage, establishing itself as the second largest economy in terms of purchasing power. Its sudden prominence attracts the attention of even the most indifferent. When you look at its growing economy, extraordinary strength of manufacturing and its global relevance, there is no doubt that China has achieved superpower status.

The obvious structural crisis of the major world economic system, capitalism, and the weakening of its greatest opponent, the United States, has contributed to this development. Moreover, the negotiating capacity of the Chinese government to implement international treaties and institutional and ideological reforms were vital to ensure the progress and stability with respect to economic development. The People's Republic of China has overcome the hegemony of the United States, becoming the largest economy on the planet who determines the rules of international order. In this paper we propose to offer first a historical background and important facts about the country. Then we will make an account of how this country is becoming one of the most important economies in the world as it has managed to overtake the United States. Finally, we will discuss the areas where China’s economy should improve.

Historical background and important data

The People's Republic of China gained its independence in 1911, after been for centuries under the rule of different dynasties. The last dynasty, the Qing Dynasty, maintained its hegemony from 1644 to 1911 before being replaced by the government of the Republic of China (Ceinos, 2006). Officially, the People's Republic of China was established in 1949 after replacing the government of the Republic of China.

The geography of China has helped greatly to its development by having approximately 9,596,960 square kilometers of land area (Guermond, 2007). It has around 14 countries that make up its territorial limit: Afghanistan, Bhutan, Burma, India, Kazakhstan, North Korea, Kyrgyzstan, Laos, Mongolia, Nepal, Pakistan, Russia, Tajikistan and Vietnam (Guermond, 2007). Its natural resources are also of great global demand, since it has the largest reserves of certain minerals and other products. In terms of mining, it is the largest producer of graphite, tungsten and zinc (Guermond, 2007), as well as a producer of bauxite, coal, oil, diamonds, gold, iron, lead, manganese, mercury, natural gas, aluminum, uranium and vanadium (Guermond, 2007). By 2005 it was estimated that 14.86% of its land could be used for tillage (Jianmingm, s. f.). Of this amount, only 1.3% is permanently grown. Techniques have been developed in agriculture to grow and feed the world's largest population and export abroad (Jianmingm, s. f.).

In demographic terms, China is recognized as the most populous nation in the world with roughly 1.351 billion of citizens (World Bank, 2014). The annual birth rate is 0.59. To counter this excessive population growth, the Chinese government adopted a measure in which the number of children was limited to only one per couple in 1970. As a result of this measure, the Chinese population is considered as aged, since its mortality rate has increased. It is projected that by 2020 11.8% of China's population will be over 65 years.

On the other hand, the population density is estimated at about 135 people per square kilometer (Library of Congress, Federal Research Division, 2006). The most populated provinces are located to the east, which are: Jiangsu, Shangdong, Henan and Shanghai (Library of Congress, Federal Research Division, 2006). 62% of the population lives in rural areas and 94% of the total population lives in the 46% of the land area (Library of Congress, Federal Research Division, 2006). It is anticipated that by 2035 China's population residing in urban areas reaches 70% (Library of Congress, Federal Research Division, 2006).

How China became leader of the world economy

The development of China as the economic power that has become today has been part of a gradual process dating back many centuries. China's economic hegemony can be situated from the V and XIV centuries when its GDP of 26,550 million compared with 10,165 million in the rest of Europe (Maddison, 2001). Between the 450 and 1000, its GDP remained constant, while European GDP falls after the fall of the Roman Empire (Maddison, 2001). By then, the Song Dynasty was in control and established a series of measures that maintained a steady economic growth cycle that lasted for almost a thousand years (Maddison, 2001). This is due largely to the scientific and cultural development. Later, under the Yuan Dynasty until 1271, the country was on its way to overtake India as the world's economic power. However, Western Europe had already managed to overtake China by 1250. In 1500, China surpasses India with 25% of total world GDP, while Western Europe only reached 18% of global production. For the year 1820, China and Western Europe started the nineteenth century as the major hegemonic powers of the world, but China maintained a GDP 30 percentage points higher than Western Europe, counting its colonies and the United States together (Maddison, 2001).

After experiencing this period of economic dominance for more than a century, China's economy suffered what was considered the biggest collapse in its history. The causes of this precarious economic situation were mainly due to an economic and technological isolation. Other countries, such as the United Kingdom and Japan, became the powers that started to expand rapidly. With the Industrial Revolution, Britain began to conquer markets production worldwide by also entering the Chinese market. From being the first world economic power in 1820, twenty years after, China was invaded by British products (Maddison, 2001). Later it would be also affected by the war against opium, the disintegration of its government, the Japanese invasion and a civil war that did not finish until 1946 (Maddison, 2001). This state of deep economic withdrawal continued from 1840 until 1949.