China rises

John farndon

Review by: Zahra Bhatti

The main Thesis of the read is pertaining to the economic boom of China. Due to
massive labor force and wise economic policies, China is emerging as new global
power. Emerging middle class spending and improved infrastructure has attracted
gigantic foreign investment unmatched by any other nation of the world.

The author in the chapter explains step by step how a closed, conservative and
communist economy of China changed over the period of time and the policies
successive governments followed to ensure that the country stayed on track to become
the economic hub of the world.

There is indication of usage of both primary as well as secondary data. Primary data is
used in the form of observation methods. Secondary data is used from different sources
such as World Bank, official figures and journals. Observation and analysis of the author
are utilized to support the arguments of the article.

The evidence is composed of china’s recorded history and recent official figures and
World Bank source. Quantitative research method is used by the author like GDP, per
capita income while explaining the arguments of china’s rapidly growing economy. The
author presents viable data to support his thesis both in the form of statistics from
various world economic forums to observing actual change in policies of other countries
towards the emerging China. The author mentions as to how, by the end of 2006, China
completed 28 years of swift economic growth. At the current pace, China is bound to
cross US as the new Global economic power of the world by the end of the next
decade. If the system of Purchasing Power Parity (PPP) is used to compare the
economies of the world, China had already grasped 12.5% of the world economy back
in 2001.

As to the data pertaining to change in attitude of global powers towards China, the
author mentions how in December 1992, the Economist published an article about
China’s economic momentum. In November 1993, German Chancellor headed for
Beijing accompanied by heads of major industrial giants of his country and signed
contracts worth US$4.1 Billion. Similarly, heads of other developed countries signed
various contracts worth US$40 billion by end of 1996.

The author mentions various cities of China that showed massive economic growth over
the years. Special Economic Zones were formed in Shenzhen, Zhuhai and Shantou
where Import duties and taxes were relaxed so attract foreign investment. In 1982, 14
other coastal towns were given a similar status. In explaining how the economic reforms
first started, the author gives the example of the city of Wenzhou as well which was cut
off from the rest of china due to its geographical location. This served to its benefit as
government check on open markets here was not strict and it formed a model to be
followed in rest of China as well.

The conclusion and inferences drawn by the author seem fairly logical. The read
gradually progresses from the economic policies followed by government of China in
each decade to its outcome in present times. The validity of the arguments is justified by
the fact that Chinese economic boom has proved and in some cases, surpassed its
predictions. The author goes in much detail to explain the results of various economic
models adopted by the Chinese governments whether conservative or liberal. Starting
from the disaster of the Mao years to wisdom of Deng’s economic incentives such as
Special Economic Zones and bold reforms, the author narrates the outcome in a very
meticulous way.

The author concludes that the success of Chinese Economic model has brought
prosperity to its people. As the private enterprises performed better than the state-
owned, weight has slightly shifted over form the latter to the former. Though this created
massive layoffs, it was inevitable to sustain the economic progress. Almost forty
thousand state-run businesses were closed from 1996 to 2001 resulting in lay-offs for
fifty-three million people. As of today, majority of people are employed in private
industries and this whole activity was termed as ‘capitalism with Chinese mask’. But
China didn’t ignore its work force that had brought prosperity to the country in 70s and
80s. Units are being set up to improve the skills of this work force so that they can
compete in the open market.

Author concludes his argument by holding that the simple reason of china being an
economic powerhouse is its manpower and investment. As world’s biggest population, it
has world’s biggest labor force that has been the key to success and china rise. They
are there to turn the money invested into real economic breakthrough and production.

The article will be placed under the Analysis section of my research in which I will
critically evaluate the factors contributing towards China: the emerging Power of the
world and its position in the world as expeditious flourishing economic superiority.