Economy of China
China is regarded as the most populous country in the world with a population of approximately 1.3 billion. Besides, it also comes at position two globally in terms of the largest economy by nominal GDP after the United States. Since China’s initiation of market reforms in 1978, it has moved from a centrally planned economy to one that is market based. This has placed the country through an experience of rapid economic and social development over the years.
The annual GDP growth of China is rated at an average of 10%. As a result of this, quite a number of people estimated to be about 500 million have been able to move above the poverty line. Almost all the Millennium Development Goals that were set by China have been reached and the few that may not have been achieved are almost near. Actually any development goal set by the nation and have not been achieved is already within reach. This has made China to be one of the most influential nations in the global economy.
Despite the great economic performance displayed by China, its market reforms are still not complete. Official data indicates that approximately 98.99 million people in China still live below the poverty line that was by 2012 set at RMB 2,300 annually. In fact, the nation has the second largest number of poor people globally after India. The reduction of poverty remains one of the greatest challenges that China is currently faced with.
There are quite a number of challenges that China has been faced with too as a result of its ascension to economic bloom. These challenges include high inequality, environmental sustainability, rapid urbanization, external imbalances among others. Another great problem that China is faced with is demographic pressure with regards to the aging population and internal labor migration.
In order to ensure that China’s economic growth is sustainable, there is need for significant policy adjustments. Based on the statistics from the past, there is proof that the transition from middle-income to high-income status can be very challenging compared to moving from low-income to middle-income. These policy adjustments should be made soon in order to protect the economy from deterioration.
The challenges faced by China above are outlined in its 12th Five-Year Plan (2011 to 2015). The plan gives a highlight of the development of services while also shedding light on addressing environmental and social imbalances that might shake the country’s economy in the future. The plan has also set targets to effectively ensure that pollution is reduced to solve environmental challenges. Other issues that are also addressed in the five year plan include increasing energy efficiency, improving access to education and healthcare, and expanding social protection.
Considering China’s annual growth target of 7%, there are clear indications that the country is aiming at putting much emphasis on the quality of life instead of the pace of growth. Generally, China has great economic muscle and is expected to even rise to the top of the world in the near future.
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