China's Economy Developing Fast

Why Is China's Economy Developing So Fast
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Why Is China's Economy Developing So Fast
Introduction
Following many years of state control of every productive assets, the Chinese government in 1978 began an ambitious program that could see major economic reforms in the country (Hu & Khan, 1997). These reforms were aimed at awakening the dormant economic giant and encouraging the establishment of rural and private businesses, liberalized international trade and investment, and a relaxed government control over some of the prices of commodities. In addition, China began investing heavily in educating its workforce and in industrial production. These efforts, by all accounts, have worked to see that China is today. In many peak years, these changes saw Chinese economy grown by over 13 percent and the per capita income has almost quadrupled since this program was initiated (Hu, & Khan, 1997). There are different reasons political and economic experts have cited to account for this rapid economic growth in China. This paper identified population dynamics, policy reforms, and the Chinese people ideologies and views as the primary factors that have contributed to the fast growth of Chinese economy.
Population Dynamics: Demographic Transition, Demographic Dividend, and Lewis Turning Point
The rapid growth in China’s economy can be attributed to demographic dividend that has made it almost impossible for the country to reach its Lewis turning point. The Lewis returning point signals a situation where labor becomes limited especially with the aging population. Over the last four decades, there has been a significant fall in the rates of fertility due to policy changes and economic factors. These changes have led to the so-called population dividend (Cia, 2018). China enjoys the positive impact on economic growth resulting from demographic dividend. For example in China, a relatively low dependence ratio and large working-age population ensure that the labor supply remains unlimited (Cai 2010). According to Cia (2018), a favorable population structure has been seen to theoretically favor economic growth. Such important channels have magnified the importance of capital, improved the quality of labor, increased labor supply, and strengthened labor mobility. In countries with such population dividend, there will be more production and this makes one of the reasons why China has witnessed a rapid economic growth over the last four decades.
Policy Reform And Opening Up: Impact on China’s Economic Development
About 40 years ago, China began a journey to reform its policies and open up to the entire world. Xi Jinping, the Chinese President saw this move as a way that serves the needs of the Chinese people to achieve their development aspirations, innovation, and afford quality of life. Policies of opening up to the world also meet the world trend toward cooperation, development, and peace. In this regard, China has witnessed not only a fast economic development, but also actively participated in global causes such as peace initiatives. In terms of economic growth, China’s GDP grew from $175 billion to $12 trillion from 1978 to 2017 (Qingu...