Asian tigers China development experience

Priyanka Bajaj(07) Gaurav Kothari (27) Karan Mago (31) Shreya Rungta(42) Sachin Shetye (49) Mukull Ovalkar (59)

Brief history
From 0 AD to around 1500 AD, China reigned supreme as the world's dominant leader in technological innovation Some of mankind's greatest inventions:
Printing Paper Gunpowder Compass Pottery and porcelain Silk

Brief History (Cont..)

In 1978 a man named Deng Xiaoping, a reformer led China away from Communism towards market economics

Major Reforms:
Privatization of China's agricultural sector, Foreign investment, A more open market, Access to advanced technologies, and management experience

China: Facts
GDP (purchasing power parity): US$9.872 trillion (2010 est.) GDP global rank: #3 (behind the European Union and the U.S.) GDP, real growth rate: 10.3% (2010 est.) GDP, per capita: US$7,400 (2010 est.) Labor force: 819.5 million (2010 est.), #1 global ranking Population below the poverty line: 2.8%

[ Source: CIA World Fact Book, accessed 2011 ]

Overview of Development
China is the worlds fastestgrowing major economy,
with an average growth rate of 10% for the past three decades years

In 2000, Chinas accounted for only 7.1% of the worlds total GDP (in PPP terms)
In 2010, that figure increased to 13.3%. By 2020, it is expected to reach 20.7%.

[ Euromonitor International Top 10 largest economies in 2020 July 7, 2010 ]

Overview of Development
In 2000, China topped Italy to become the worlds sixthbiggest economy. In 2005, China overtook France to become the fifth-largest. In 2006, it moved up again by knocking off the U.K. In 2007, China became the third-largest economy by topping Germany

[CIA World Fact Book; Fortune China is richer, but most Chinese are still poor Feb. 17, 2011 ]

Overview of Development
China is the worlds second largest economy, after overtaking Japan in 2010.
[The Economist online Aug.16, 2010; CNBC Aug. 2010, The Guardian UK Feb. 2011]

Future Predictions
China could overtake the U.S. as the worlds biggest economy by 2030, according to economic experts

[ New York Times, China Passes Japan as Second-Largest Economy August 15, 2010]

China could overtake the U.S. as the largest economy as early as 2027

(Goldman Sachs Group Inc. chief economist Jim ONeill)

Chinas economy could overtake the U.S. economy by 2019

[The Economist online, How to gracefully step aside Jan. 11, 2011]

Development Indicators
Economic
Demographic Human Development Index

Economic Development Indicator

It was not an obvious path to growth. But for nearly 30 years China had indeed been growing, thrusting its citizens into prosperity and its goods across the world. Between 1978 and 2005, China's per capita GDP had grown from $153 to $1284, while its current account surplus had increased over twelve-fold between 1982 and 2004, from $5.7 billion to $71 billion. During this time, China had also become an industrial powerhouse. According to the 11th five-year plan, China needed to sustain an annual growth rates of 8% for the foreseeable future. No country has ever before maintained the kind of growth that China is predicting.

China, economically frail before 1978, has again become one of the world's major economic powers with the greatest potential. In the 22 years following reform and opening-up in 1979 in particular, China's economy developed at an unprecedented rate, and that momentum has been held steady into the 21st century.

China adopts the "five-year-plan" strategy for economic development. The Twelfth FiveYear Plan (2011 2015) is currently being implemented.

In the 1980s, it had transformed its vast and inefficient agricultural sector, freeing its peasants from the confines of central planning and winning them to the cause of reform.

In the 1990s, it had likewise started to restructure its stagnant industrial sector, wooing foreign investors for the first time. These policies had catalysed the country's phenomenal growth. Instead, China had to take what many regarded as the final step toward the market, liberalizing the banking sector and launching the beginnings of a real capital market.

This step, however, would not be easy. As of 2004, China's stateowned enterprises were still only partially reorganized, and its banks were dealing with the burden of over $205 billion (1.7 trillion RMB) in nonperforming loans, monies that had little chance of ever being repaid.

China is continuing to urbanize and certain provinces are larger than many developed and developing countries in terms of GDP However, China should not be view as one market due to income gap between different regions

Demographic Development Indicator bulk of its increase in GDP per capita from an increase in labor productivity

Trade & Investment

China has become increasingly open to the global economy, leading to a marked increase in competition Trade liberalization has made China one of the most open economies in the developing world Imports are almost a third of GDP, much higher than in the United States, and domestic firms also must compete with large quantities of goods produced and sold by foreign firms in China China has also been very successful in attracting FDI To attract FDI, foreign banks were allowed to set up branches in special economic zones (SEZs)