Canada’s Benefit from a Transitioning Chinese Economy
The Communist ruled nation China has always been known for its cheap labour and sometimes questionable living standards. In 1978, China began the transition from a planned market economy to a more capitalistic, free market economy. Ever since then, numerous reform policies have been implemented and Liou (2010) says that these policies lead to an:
Increase economic growth and improve the quality of public life. These policies have promoted private business development in China and have gradually changed the Chinese system from a totally government-controlled planning system to a market-oriented capitalist system. ( p. 3)
China’s reform is a 2 stage process, with the first stage spanning form 1978 to 1993 and the second stage spanning from 1994 to the present day. While the reform has be ongoing for nearly 35 years, the bulk of major events occurred in the earlier stages. China kept it’s basic institutional framework but dramatically changed resource allocation and the relationship between government and business. With a change in resource distribution, the nations GDP, and living standards all dramatically improved. Qian and Wu (2000) say that:
During this period, China's GDP grew at an average annual rate of about 9 percent, or 7.5 percent on a per capita basis. The living standard of ordinary Chinese people improved significantly. The per person living space has doubled in urban areas and more than doubled in rural areas, and total household bank deposits, measured against the GDP, increased from less than 6 percent in 1978 to more than 40 percent in 1993. The number of people living in absolute poverty was substantially reduced from over 250 million to less than 100 million in this period as well. (p.4)
Not only did these reforms improve national GDP and living conditions, but also eliminated shortage of resources by properly distributing them, solving a common problem with all planned economies. Other nations such as Hungary made
Increase economic growth and improve the quality of public life. These policies have promoted private business development in China and have gradually changed the Chinese system from a totally government-controlled planning system to a market-oriented capitalist system. ( p. 3)
China’s reform is a 2 stage process, with the first stage spanning form 1978 to 1993 and the second stage spanning from 1994 to the present day. While the reform has be ongoing for nearly 35 years, the bulk of major events occurred in the earlier stages. China kept it’s basic institutional framework but dramatically changed resource allocation and the relationship between government and business. With a change in resource distribution, the nations GDP, and living standards all dramatically improved. Qian and Wu (2000) say that:
During this period, China's GDP grew at an average annual rate of about 9 percent, or 7.5 percent on a per capita basis. The living standard of ordinary Chinese people improved significantly. The per person living space has doubled in urban areas and more than doubled in rural areas, and total household bank deposits, measured against the GDP, increased from less than 6 percent in 1978 to more than 40 percent in 1993. The number of people living in absolute poverty was substantially reduced from over 250 million to less than 100 million in this period as well. (p.4)
Not only did these reforms improve national GDP and living conditions, but also eliminated shortage of resources by properly distributing them, solving a common problem with all planned economies. Other nations such as Hungary made