China has achieved hyper economic growth in the past three decades which is very spectacular (Lu, 2011). It has already 16 percent of the global gross domestic product and it is predicted that it will rise to 28 percent by 2030. Moreover, Yue (2008) said that the sustained rapid economic growth of China has confirmed the rising trend of China as a potential global power.
Chinese president Xi Jinping stated that his party would be central to the realization of the ‘China dream’. But the question arises that will China succeed in transforming the economic model that it has served well for the last 35 years.
The Chinese communist party adopted a blueprint for the future at its Plenum. The party has acknowledged the market as the definitive factor in determining the future shape of the economy of China. It also realized to provide new economic growth generators which are beyond the labor-intensive manufacturing and state investment for export. Moreover, it also embraced the need to grow new jobs in the service sector and lift domestic private consumption, especially in China’s exploding second-tier cities.
Chinese’s authorities have recognized that for the implementation of this model, it should admit the imperative of state-owned enterprise reform, proper access to capital markets and competitive neutrality for the private sector. Moreover, for driving the efficient allocation of the resources in the economy of China, this model requires deep reform in capital markets of both private and public.
However, if the model which is taken as a major reform task failed to implement, it will seriously weaken economic growth, employment, and average incomes growth which in turn reduce the contribution of the Chinese economy to global growth. Accordingly, the reduction in global growth rate results in weakened global investment, trade and capital market flows.
Solow model of economic growth is a long-run model that tries to describes why there are such vast growth differences and income disparities across the world. It explains the productive capacities of countries over time. There is some similarity pattern of this model with the economic growth of China. The Solow model assumes that there are certain factors that determine productive potentials such as the skill of the labor force, the value of capital stock, the efficiency of energy consumption and the level of the technology currently used in production. China is very high in the above-mentioned factors that determine productive potentials which is why China will continue to be the fundamental political and economic power in the long-term to the wider Asia-Pacific region and the world beyond.
References
Lu, D. (2011, Dec). Transition of China’s growth pattern. Frontiers of Economics in China, 6 (4).
Yue, J. (2008, Jul). Peaceful Rise of China: Myth or Reality? International Politics, 45 (4).
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China has achieved hyper economic growth in the past three decades which is very spectacular (Lu, 2011). It has already 16 percent of the global gross domestic product and it is predicted that it will rise to 28 percent by 2030. Moreover, Yue (2008) said that the sustained rapid economic growth of China has confirmed the rising trend of China as a potential global power.
Chinese president Xi Jinping stated that his party would be central to the realization of the ‘China dream’. But the question arises that will China succeed in transforming the economic model that it has served well for the last 35 years.
The Chinese communist party adopted a blueprint for the future at its Plenum. The party has acknowledged the market as the definitive factor in determining the future shape of the economy of China. It also realized to provide new economic growth generators which are beyond the labor-intensive manufacturing and state investment for export. Moreover, it also embraced the need to grow new jobs in the service sector and lift domestic private consumption, especially in China’s exploding second-tier cities.
Chinese’s authorities have recognized that for the implementation of this model, it should admit the imperative of state-owned enterprise reform, proper access to capital markets and competitive neutrality for the private sector. Moreover, for driving the efficient allocation of the resources in the economy of China, this model requires deep reform in capital markets of both private and public.
However, if the model which is taken as a major reform task failed to implement, it will seriously weaken economic growth, employment, and average incomes growth which in turn reduce the contribution of the Chinese economy to global growth. Accordingly, the reduction in global growth rate results in weakened global investment, trade and capital market flows.
Solow model of economic growth is a long-run model that tries to describes why there are such vast growth differences and income disparities across the world. It explains the productive capacities of countries over time. There is some similarity pattern of this model with the economic growth of China. The Solow model assumes that there are certain factors that determine productive potentials such as the skill of the labor force, the value of capital stock, the efficiency of energy consumption and the level of the technology currently used in production. China is very high in the above-mentioned factors that determine productive potentials which is why China will continue to be the fundamental political and economic power in the long-term to the wider Asia-Pacific region and the world beyond.
References
Lu, D. (2011, Dec). Transition of China’s growth pattern. Frontiers of Economics in China, 6 (4).
Yue, J. (2008, Jul). Peaceful Rise of China: Myth or Reality? International Politics, 45 (4).