Why Is China Growing So Fast Term Paper Example | Topics and Well Written Essays - 1250 words

Why Is China Growing So Fast - Term Paper Example Any country is said to be developed if the demand and supply chain of a country shows that there is more supply of goods or anything than demand by the market. Many factors count in these regards: the natural resources and their extractions according to the geography, manufacturing, distribution, consumption, exchange medium etc. All these factors set the constraints and parameters in which the economy of any country works and may or may not flourish. All activities happening in a country also account for its economic growth. The occupations, education, business and investments are the basic pillars upon which the economy stands. The greater amount of people a country produce as literates or skilled workers, the more productivity will increase, and the economy will grow. More the resources are being used by the government for its people, the less will be the demand, and ultimately the economy will boost. Overall, the size of economy of any country is determined by the gross domestic product GDP and GDP per capita of the country, which only includes such economic activities in which the money is exchanged. The living standards in a particular state are measured through GDP per capita, and every change in GDP indicates a change in the living standards. Economic growth is defined as the â€Å"increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs including labor, capital, material, energy, etc. for a given amount of output† (Kendrick, John W.1961). Economic growth is often related to Economic Freedom—the process in which citizens are allowed to make their own economic policies without the interference of government. China, India and Japan are considered the fastest developing countries amongst all nations. There has been a pre-1978 era of capitalization during which the Chinese government has applied strict central indust rialization rules of its own which resulted in constrained economic growth and misallocation of resources. Ever since then having realized the effectiveness of providing economic freedom to its industrialists and decreasing the intervention on the part of government by shunning the policy of taking over the control of industries, China has witnessed rapid economic growth and has improved its business environment for local and foreign investors. In addition to that there were some other reasons of China’s economic boom apart from economic freedom? Economists carefully studied the Chinese economic system and revealed the following astonishing facts: 1. They said that no doubt the Chinese government highly focused upon capital investment like manufacturing and communication and put in an extra effort to increase the productivity of a huge skilled and efficient work force, which is considered to be the most significant factor and the actual dynamic force behind the rapid growth o f Chinese economy. The combination of large scale capital investment and efficient work force together have work wonders for the Chinese economy which can never be obtained by any of the factor alone. 2. The government of china encouraged private investors and businessmen to come forward to mutually put in place wide-scale economic reforms. Foreign investors were welcomed and they were provided with ideal conditions for business, with limited or no control of the state government. These strategies on the part of Chinese government proved to be successful and gave impetus to immense economic growth a