China's Economy Flashcards
What did China do?
Movied from centrally planned economy to more market-orientated system
1978
Began to follow Asian Tiger path of development through export driven road to development
Asian Tigers
Highly developed economies of Hong Kong, Singapore, South Korea and Taiwan.
These regions were the first newly industrialized countries
How did it happen?
Communist control was relaxed
Foreign investment + joint ventures were encouraged
Internationalisation of the Chinese economy = called GUANXI NETWORK = connections that exist between Chinese people + companies scattered all around the world
How did China attract foreign industry in SE?
14 ‘open’ coastal cities and 5 Special Economic Zones were set up
What are SEZs?
Where foreign companies were encouraged to set up manufacturing plants in return for preferable tax rates
Initially concentrated on coast facing Taiwan + the Pacific (particularly around Hong Kong)
Advantages of SEZs
They allow tax grants = more profit
In favourable locations geographically to work
Labour = 80% cheaper here
What did the large amounts of FDI mean?
Economic growth
2006
$63 billion per year of inward investment
2 Social Issues
↑ income gap tween rich + poor despite high GDP growth
Huge rural-urban migration = left thousands in countryside isolated as well as a decrease in agriculture = poverty + famine has spread
2 Environmental Issues
Deterioration of environment (Smog + River pollution) + use of natural resources
Soil erosion = ↓ arable land
2 Economic Issues
Economy = driven by exports + investment not consumption
Unemployment grown in areas = people moving to find work
2001
China entered WTO = better access to global markets = TRADE BOOOOOOOOOOOOMED
2006 exports
$969 billion
