When inquired to share their views whether it is going to be encouraging or damaging in case China assumed to be "considerably having more potential on the economic front compared to today, " in sixteen nations nearly the majority of 11 nations or a multitude of 5 nations witness it as encouraging. Prominently, this upbeat notion is seen in several nations, like Mexico of 54%, whose production sectors face a major competition with China. Taking an average estimate, 49% see it as encouraging and 33% view it as downbeat. In just four nations does a multitude view it as downbeat - Italy which is 47%, Spain -- 47%, Turkey -- 42%, and Argentina -- 41%. There is also a divided opinion in two nations - the U.S. And Germany. (22-Nation Poll Shows China Viewed Positively by Most Countries Including Its Asian Neighbors)
The U.S. Dow Jones Indexes who carried out a survey lately about the future development of the top 50 worldwide transactional corporations, one-third of these corporations consider that the economic growth of China constitute the most encouraging aspect for their advancement five years ahead. The Dow Jones Indexes launched the "Global 50 Giant Index" for the 50 major multinational corporations five years back. According to the survey, the economic growth of China was placed first among several factors which would be impacting the future development of the corporation in the coming five years. Among them constitute China's low cost but good products, exceptionally talented human capital and an extensive market. Truly, 13% of the companies maintained that the economic growth of China would put a harmful impact on their future growth. They primarily implied that China's economic development would involve hike in oil prices and raw and semi-processed materials and compete with their products. but, an added 20% firms maintained that their future proceeds from the global markets would arrive chiefly from China, and their market share in China will be enormous as that of the U.S. The exploration outcomes even revealed the patterns of development of the large multinational companies in five years from now. Merger and Acquisitions -- M & a will no more be the primary means for the progression of these multinationals, their development in the coming years will depend primarily on the improvement of their own products and services. (Survey: China's economic growth is a most positive factor)
To include more of the several advantageous causes for the development of China constitute that taking into account the massive population in China, supply of cheap workforce is taken for granted, which offers immense advantages to the long-standing persistent economic growth. A huge population not just indicates a quality supply of labor, but an enormous market scale as well. As the economic growth of China continues to be at a nascent level in contrast to that of the Western nations, the earnings and purchasing power are quite restricted. Therefore, a huge opportunity exists for the growth of domestic market. The inhabitants of China habitually keep aside huge sums for savings and thus have a high savings rate. It will be a vital assurance of the demand of investments for future growth in investments and enabling of speedier economic development. (the trend of Economic development of mainland china in the 21st Century) considerable gap exists between the stages of production technologies available in China compared to other developed nation, which is a pointer that a huge scope exists for development of old-economy industries in China. The economic restructuring in China have been executed in a phased way. Therefore the restructuring work is yet to be over till now. Ultimately, under the trend of globalization, the spate of economic development and consequences of improved production technologies have provided the economy of China an increasingly significant part to contribute as regards industrial labor division in the global trade system.
Therefore it is discernable from the above deliberations that following twenty years of restructuring and inviting foreign companies, the Chinese economy has been marching ahead. The macroeconomic settings has faced "qualitative" modifications like an improvement in the extent of globalization, the economic system favoring towards market driven economy, development towards private companies, phase wise allocation of economic management powers, augmentation of regional economic power and more and more stress on laws and legislations by government control. These important modifications can be regarded as vital achievement of the execution of reforms and the policy of inviting foreign companies by Chinese government. Taking into account the basis of these achievements, it is therefore regarded that the twenty year long economic reforms and liberalization of the economy have implemented a global influence on the economy of China and would present encouraging prospects for the nation. (the trend of Economic development of mainland china in the 21st Century)
Restrictive Trends in China
Nevertheless, we should indicate that not every change on the "nature" of Chinese economic setting as an outcome of "restructuring and the policy of inviting foreign companies" are encouraging to the steady growth of the Chinese economy and society. To put in differently, restructuring and inviting foreign companies have even resulted in a number of damaging impacts to China. These impacts might result in such adverse outcomes and destabilization of the society and economic stalemate in the coming years. (the trend of Economic development of mainland china in the 21st Century) Overall, China is classified into a 'developing country' status. However the enormous expanse of the nations implies that a lot of regions are there which are on their path towards industrial and economic growth. Disparities in the speed of industrialization have broadened regional disparities in economic development leaving certain regions in a transitory state. It goes without saying that, it is totally expected that as a socialist, industrial country, China occupies, on the whole, has been capable of attaining a certain level of growth. What is crucial for the current objectives remains that disparities in regional economic levels have led to huge gaps in the nation that would be a hindrance to the future prospects of China. (Ash, p.126)
It is popularly regarded that the exceptional economic growth of the Chinese economy in the last twenty years does not hold any assurance that identical pace of growth will be maintained in the coming years. As per guesstimate by the World Bank, the pace of GNP growth of China will come down with the passage of time. The mean yearly growth rate will come down from 8.4% within 1995-2000 to 6.6% within 2000-2020 and subsequently a mere 5.5% by the year 2020. The causes of the lowered economic growth rate primarily comprises hold up in the growth of labor force and alterations in the age composition of the population, deterioration in the rate of capital output, waning in the propelling force given by enhancement in the organizational modifications and dwindling scope for technological progression.
The downbeat view maintains that more and more dependability on overseas investment in China would thwart capital formation through domestic savings and pressurize the subsidiary company's dependency on the flagship company and deteriorate the international balance of payments or BoP by payment of interest and dividends would be a hurdle to its future positive growth (Park, p.65) Apart from that, the citizens are yet to reap from China's economic growth particularly in the country side. Nearly 160 million of the nation's 1.3 billion people thrive on below one dollar per day. This state of underprivileged condition has forced the rural folks to rush to the cities in search of jobs that are paying. This change in demographics is showing bad results; cities and farmlands are gradually eating away China's farmland. The country which in the past has been self-reliant presently is compelled to import enormous quantities of grain and oil. The menace of pollution constitutes another shortcoming of the nation's economic development. China houses 16 of the 20 maximum polluted cities in the world as stated by the World Bank. (Supersized! China's economy booms)
To the extent the various sectors are concerned, it is approximated that agriculture will progress with the identical growth rate which prevailed in the yesteryears. Nevertheless, the growth rate might probably be many times lesser compared to that encountered by the industrial sector and the service industry. The contribution by the agriculture sector in Chinese economy will slowly be diminished in the coming years. But there will not be any food shortage in the forthcoming future. The drift of agricultural development will certainly result in excess labor. If the excess of agricultural labor force cannot be efficiently shifted and retained in other sections, joblessness will be a severe social and economic problem in China in the coming years. The service industry will be the sector with the maximum vigor in the Chinese economy in the future. Even though the service industry has developed extremely…