ppt on chinese economy in ecomonies
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CHINESE ECONOMYCHINESE ECONOMY
Presented by:
Hitesh Patel
Jayant Behra
Nisarg Shah
Piyush Jain
Sudhir Patel
CHINA BACKGROUNDCHINA BACKGROUND
1949 China transformed into a Socialist Economy by Marxist.
After war with Japan in 1945 many mines and factories were
destroyed.
The Soviet troops has dismantled half the industrial area &
shipped to Soviet Union.
In 1949 the Communist Government has acquired majority
of the sectors and remaining 17% in 1952.
The Communist Government has started implementing
policies for the development of powerful Communist Country.2
CHINA 1952-1957CHINA 1952-1957
The First Five year plan implemented(1953-57).
Plan was implemented by adopting the Soviet Model.
Rigid policies and framework implemented for the
Growth.
By 1956 67.5% enterprises were state owned and
remaining 32.5% jointly public-private owned.
Heavy industries i.e. Iron, Steel, Coal, Mine etc were
pressurized for the inception of Development.
3
1970-781970-78
In early 70’s the radical group Gang of Four Gang of Four attempted to
dominate the power of the center.
After the fall of Gang of Four in 1975, new policies were framed
and encouragement to increase Foreign trade was given.
Also the exchanges of students and foreign experts with the
developed countries were to be encourage.
The economy quickly recovered from the Stagnation period
between 1976 and 1978 from Cultural revolution.
Industrial output jumped to 14% in 1977 and increased by 13%
in 1978.
An Era of Development was laid down by the Communists.
4
ECONOMIC REFORMS ECONOMIC REFORMS
In late 1970 and early 1980 Trade with other
countries were allowed.
Economic zones created for attracting the
Foreign Direct Investment (FDI).
Privilege to farmers for selling out their surplus
crop in the open market was allowed.
Township Village Enterprises (TVE) were
established.
Creation of Special Economic Zones5
LATE 1980 AND 1990LATE 1980 AND 1990
Creating a pricing system and decreasing the role of
state in resource allocations
Administratively driven command economy transformed
to a price driven market economy
Closing of unprofitable enterprises
Dealing with insolvency in the banking system.
Constraints on foreign trade were relaxed, and joint
ventures with foreign firms were officially encouraged as
sources of modern technology and scarce foreign
exchange
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ECONOMIC REFORMS’ ECONOMIC REFORMS’ ACHIEVEMENTACHIEVEMENT
The real GDP on average grows to 9% a year.
People below poverty line (BPL) has reduced to
a large extent.
Increase in foreign exchange reserves.
China has became second largest economy
after USA.
Between 1996-2000 China cumulatively
approved 104,621 foreign invested enterprises,
with a commitments of US 279.984 billion.
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GLOBAL OUTLOOKGLOBAL OUTLOOK
DEMAND GROWTH CONCENTRATED IN ASIA FOR
NEXT TEN YEARS – ESPECIALLY CHEMICAL GRADES
CHINA WILL CONTINUE TO GROW AND DOMINATE
SUPPLY DESPITE HIGHER COSTS
CHINA INTERNAL DEMAND WILL GROW AT 40 -
50% RATE
ASIA PRICES WILL BE $300 – 500/MT LOWER THAN
US AND EU8
COMMUNIST TO CAPITALISTCOMMUNIST TO CAPITALIST
China transformed its economy into Capitalist economy by
opening the doors for the foreign trade.
Challenges for the Communist to Capitalist!!
Growth in inequality of Income
Corruption and Crime
Inflation
Unfavorable demographics
Domestic and international imbalances.
Financially distressed state-owned and
state-influenced enterprises.
A dysfunctional financial system
9
RISE IN GDPRISE IN GDP
10
OUTCOMES OF OUTCOMES OF TRANSFORMATION TRANSFORMATION
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SLEEPING DRAGON AWAKESSLEEPING DRAGON AWAKES
China has been called as People Bomb due to increase
in population.
Growth rate of population estimated at 14mn per year.
Unemployment is about 20 percent.
HIV/AIDS is spreading .
Corruption
Fear of global pandemic Bird Flu because of worlds
biggest poultry population.
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