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ECON2500 > Lecture 4 (MCQ and SAQ) > Flashcards

Lecture 4 (MCQ and SAQ) Flashcards

1
Q

Inherited british institutional framework, the most laissez fair approach of the 3, focus on financial services

A

Hong Kong

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2
Q

Active industrial policy, boosted by the U.S. market

A

Taiwan

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3
Q

Late starter relative to other two (late 70s rather than 50s), state-led development, starting from a centrally planned economy

A

Mainland China

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4
Q

Reasons for strong Economic Development in China? (6)

A
  • Local initiative
  • Embraced regional competition
  • Integration in the world economy
  • Embraced leading technology, transitioning from follower to technological frontier
  • World-class infrastructure
  • Heavy investment in human capital
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5
Q

Remarkable success, growth miracles over several decades, which countries? (5)

A 
Hong Kong
Taiwan
China
Singapore
South Korea
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6
Q

Challenges of China’s economic development (6)

A
  • Avoiding middle-income trap
  • Low quality growth (poor social and environmental outcomes), not harnessing innovation
  • Social exclusion rural/urban divide, inequality in income and wealth
  • Ageing population
  • Environmental destruction
  • External imbalances (trade surplus vs capital account deficit)
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7
Q

Economic development in China strengths

A

Large skilled labour pool

Potential for further urbanisation

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8
Q

Double edged swords of China’s economic development (3)

A
  • Growth of emerging economies (potential customers vs prospective competitors)
  • Disruptive technologies (3D printing, free lance work, sharing economy
  • High savings (low consumption)
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9
Q

Development strategy - recent 5 year plans (6)

A
  1. Reducing the role of the state, and increasing that of the private sector to foster competition
  2. Embracing innovation and linking to worlds best R and D
  3. Embrace green development as a growth opportunity
  4. Foster equality of opportunity and social inclusion and protection
  5. Focus on fiscal sustainability
  6. Deepening integration with world markets, and enhance stakeholder rolls
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10
Q

1983 - 2013 growth rate

A

10% a year, cumulative 16.4x GDP

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11
Q

How many people out of poverty 1983-2015?

A

500 million

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12
Q

Worlds largest.. (2)

A

Exporter and manufacturer

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13
Q

When was China the worlds largest economy?

A

1500s-1800s

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14
Q

When was China’s severe decline?

A

1820 -1950

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15
Q

When did the East Asian miracle Peter out?

BUT China kept steering ahead

A

With financial crisis of 1997-98

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16
Q

Is slowing, but rapid growth sustainable in relation to… (3)

A
  • disruption to the world
  • the environment
  • Social cohesion
17
Q

Twin historic transformations:

A
  • Rural, agricultural society to urban, industrial

- Command economy to market-based (still with significant intervention, micro and macro)

18
Q

How many of the top 10 banks are chinese?

A

5

19
Q

What % of the global Fortune 500 companies are Chinese?

A

10%

20
Q

China is the worlds ….. Largest highway network

A

2nd

21
Q

How many of the top 10 container ports are Chinese?

A

6

22
Q

Top three banks

A

Industrial & Commercial Bank of China Limited, China
China Construction Bank Corporation, China
Agricultural Bank of China Limited, China

23
Q

Key aspects of the reforms started in 1978 (5)

A
  1. Pragmatic, market oriented
  2. Economic growth supported by macroeconomic and social stability
  3. Promotion of interregional competition (between local governments)
  4. Integration of domestic markets
  5. Integration with international markets
24
Q

Long run outlook of economic development - global trends (7)

A
  • Ongoing catch up and competition from middle-income emerging economies, also increasing automation (robots)
  • Diminishing growth in global trade, potential for protectionism
  • Continued debt deleveraging by advanced economies
  • Further progression of multipolar global economy
  • Rising to become worlds largest economy, largest emitter of CO2, largest share of trade, largest foreign investor
  • Unprecedented expansion of world middle class
  • Ageing population
25
Q

Long Run Outlook of Economic Development: Trends in China (5)

A
  • GDP growth decline from CAGR 8.5% (2011-2015) to 5% (2026-2030
  • Falling growth in inequality due to narrowing of the income gap between the coast and the interior
  • Shift from labour-intensive to skill-intensive sectors, more innovation at the expense of chinas low labour costs
  • Changes in social and political governance - more educated population
  • Congestion, pollution and large city problems - more innovative urban development policies
26
Q

Long Run Outlook of Economic Development: Opportunities (5)

A
  • Growing middle class - rising domestic demand for income-elastic products
  • Specialisation through international trade
  • High savings rate provides a domestic source of investment
  • Improvements in human capital and R&D provide the basis for growing incremental innovation and technological breakthroughs
  • Exploit competition between local govs to transition towards quality (green) development, improving quality of life and the environment
27
Q

Long Run Outlook of Economic Development: Risks (7)

A
  • Transition from middle-income to high-income society may not be smooth
  • Real estate market slow down or crash
  • Middle-income trap causing growth slowdown
  • Social risks increased (more middle class and higher education - demand better social governance and participation in public policy
  • Exposition to commodity price shocks (intensive energy and commodity use)
  • Exposure to capital losses in US treasury bonds if interest rates rise or US dollar appreciates
  • Protectionist backlash from Chinas growing share in international trade

ECON2500 (6 decks)

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