Home / Summaries / Understanding contemporary China / chinas-china-countries

China's Economhy - China's Dynamic Growth in Perspective

15 important questions on China's Economhy - China's Dynamic Growth in Perspective

How did China's yearly economic growth compare to the growth of the world economy in the period 1978-2010?

China's growth was at an annual rate of 9.9%. The average annual rate of the world economy was less than 3%.

Why was China's economy much less affected by the world wide economic recession than other countries?

Because of its large size and population; over 80% of its growth is generated by domestic demand.

Describe how China's export structure has changed since its open-door policy of 1978.

In 1978, 55% of China's export constituted of primary commodities (e.g. natural recources and agricultural products). In recent years, 95% of China's export is made up of manufactured products.

Even the export structure within manufactured goods has changed drastically. In the early 1990s, the export was dominated by labor-intensive manufactured products like clothing, footwear and toys. Nowadays electronics and machinery are overtaking these items; in 2010 these products accounted for 31% of China's total exports.

In 1978, China's exports accounted to $9.8 billion. In 2010 export accounted for $1.6 trillion.

Which factors have contributed to China's economic growth?

Increased domestic demand
Trade expansion
Increased foreign investment

What is the result of these high amounts of FDIs (in combination with a growing trade surplus)?

China's foreign exchange reserves have increased. In 2011, China owned US$1.6 trillion in US Treasury securities (17% of the US's national debt).

Other countries have pressured China to take action because of having these high amounts of foreign exchange reserves. What to these countries want to China to do?

They pressure China to appreciate its currency.

China appreciated its currency as other countries pressured. Why are these countries not satisfied yet?

Because China has only appreciated its currency modestly to the US Dollar and has even depreciated it against other major currencies along with the US Dollar. China therefore continues to have a trade surplus and continues to accumulate foreign reserves.

What can be said about the exchange rate of the Chinese RMB (China's currency) in the period of mid-1990s to mid-2000s?

It was under a de facto fixed exchange rate.

Which dilemma does China face with regard to its foreign reserves, especially with regard to its US dollar reserves?

If China were to sell off some of its large US T-Bill holdings it might push the dollar down. China will then lose on the sale and on its remaining holdings. If China continues to keep its foreign reserves it might also face large losses if the US dollar continues its downslide.

Describe the change in GDP in the period of 1978 - 2010 for China.

China's GDP in 1978 was 365 billion RMB. In 2010 China's GDP was 40 trillion RMB. This makes China the world's second largest economy.

Which two sectors are the main contributors to China's economy?

China's industrial sector (accounts for about 46% of the total GDP) and the service sector (also a share of about 46% in China's GDP).

Why can it be assumed that China's statistics of the period of the Great Leap Forward are inaccurate?

Because during this period in the late 1950s, production targets were set for enterprises. This pressured underperforming enterprises to make false reports.

Why do some believe that China's GDP actually underestimates the true size of China's economy?

Because of the existence of a large underground economy and widespread activities of smuggling and capital flight.

China has followed other East Asian countries in pursuing export-led growth. But how is China different from these countries?

China has actively promoted process trade. It imports components, then assembles these into finished products which are then exported.

Why do Foreign Invested Enterprises (FIEs) shift part of their production to China?

Because of the beneficial policy measures and low labor costs.

The question on the page originate from the summary of the following study material:

Understanding contemporary China | 9781588268440 | Robert E Gamer

View summary

A unique study and practice tool
Never study anything twice again
Get the grades you hope for
100% sure, 100% understanding

Remember faster, study better. Scientifically proven.

China's Economhy - China's Dynamic Growth in Perspective

15 important questions on China's Economhy - China's Dynamic Growth in Perspective

How did China's yearly economic growth compare to the growth of the world economy in the period 1978-2010?

Why was China's economy much less affected by the world wide economic recession than other countries?

Describe how China's export structure has changed since its open-door policy of 1978.

Which factors have contributed to China's economic growth?

What is the result of these high amounts of FDIs (in combination with a growing trade surplus)?

Other countries have pressured China to take action because of having these high amounts of foreign exchange reserves. What to these countries want to China to do?

China appreciated its currency as other countries pressured. Why are these countries not satisfied yet?

What can be said about the exchange rate of the Chinese RMB (China's currency) in the period of mid-1990s to mid-2000s?

Which dilemma does China face with regard to its foreign reserves, especially with regard to its US dollar reserves?

Describe the change in GDP in the period of 1978 - 2010 for China.

Which two sectors are the main contributors to China's economy?

Why can it be assumed that China's statistics of the period of the Great Leap Forward are inaccurate?

Why do some believe that China's GDP actually underestimates the true size of China's economy?

China has followed other East Asian countries in pursuing export-led growth. But how is China different from these countries?

Why do Foreign Invested Enterprises (FIEs) shift part of their production to China?

Summaries related to Introduction - New Challenges

Understanding contemporary China

1. News values

Aantekeningen ruth

A brief history of marketing text

Pathways to pregnancy and parturition

Organizational behaviour

International Finance Theory and Policy, Glo…

The lean startup: how constant innovation cr…

Core grammar for higher education

An Introduction to Sociolinguistics

English pronunciation for student teachers

Sounding Better