Growth and development trends of the Chinese economy in the 21st century

¶ … growth and development trends of the Chinese economy and economic development of China in relation to this argument. It also puts light on the role played by the Chinese government in making China the fastest growing economy of the world.

The 21st Century Is The Chinese Century

According to a number of people 'the 21st century is the Chinese century'. People, however, made the same comments about the Chinese economy 100 years ago but unfortunately such comments did not prove out to be fruitful. However, in the present era, it is quite evident from the economical and financial development of the Chinese economy that China is going to play an important and critical role in the world economy. And if we analyze the trends of development in different sectors of the Chinese economy we can deduce that China has a potential to become a global market leader. According to a number of studies, the major reason behind the rise of the Chinese economy in the 21st century is the constant development of this economy in the 20th century. (Kirby)

In a period of one and a half century China has transformed itself from a non-growing, stagnant economy, that does not play an important role in the global competition, to a giant manufacturing power house that plays an important role in the economy of the world. The output or production of the Chinese economy has been increasing at a constant rate of ten percent per year. In addition to that, the growth rate of the export of Chinese products is seventeen percent per year. China consists of about one fifth of the total world population and it has a share of about four percent in the total trade of merchandise in the world. The share of China in the total production of the world ranges between three to four percent. This share depends on the purchasing power parities and the prevailing exchange rates; hence it keeps on changing with the change in these two variables. ("China in the," 1997)

Growth Trends in The Chinese Economy

In the year 2002, the Chinese export increased to $325 billion. There was a massive increase in the exports of this country ranging up to 22%. The exports were limited to $95 billion in the year 1992. The increase in exports led towards an increase in the Gross Domestic Product (GDP) of China. Thus, with its massive export development the Chinese economy grew by 8.0% in the year 2002, which is the highest growth rate for that year. (Kalish, 2003)

The massive development of the Chinese economy resulted in the increase of Foreign Direct Investment (FDI) in the Asian region. In the year 1999, China received eighteen percent of the total Foreign Direct Investment (FDI), whereas, Association of Southeast Asian Nations (ASEAN) received sixty one percent of the total Foreign Direct Investment (FDI). But in the year 2002, the situation was somewhat contradictory with China receiving sixty one percent of the total Foreign Direct Investment (FDI) and the Association of Southeast Asian Nations (ASEAN) receiving only seventeen percent of the total Foreign Direct Investment (FDI). (Kalish, 2003)

China's Strong Sense of Direction

In the desire to make the Chinese economy and society developed and advanced, the Chinese government or leadership is adhering to a strong sense of direction. This sense of direction and determination is a valuable asset for an emerging superpower. All of the commendable economic activity in China occurred under the communist party government. The command economy held back the real production capacity and economic potential of China as compared to Japan and other developed economies of the world. It was under the current leadership that China realized its real potential and experienced a transition from a command economy to an open market economy. The existing government is still working on different reforms and policies to maintain the current growth trend of the Chinese economy. (Dellios, 2005)

Conclusion

'The 21st century is the Chinese century' is a valid statement and it is backed up by the massive growth trends in the Chinese economy. China can maintain its rise and influence in the global economy if there are no wars between China and the United States of America, no major catastrophes and no uncontrollable fluctuations in the economic conditions. Apart from these facts, it is quite evident that in the 21st century the power of the United States of America is going to decline and that of China is going to increase. (Elliott, 2007)