Chinese economic miracle: what is the secret. Chinese economic miracle

China's technological and socio-economic progress over the past 15 years is incredible and unimaginable. In a very short period of time, China has managed to build a powerful, highly diversified and competitive civilization.

Modern history (20-21 centuries) knows no precedents for such a grandiose breakthrough in such a short period on a high base. There are examples of the rapid rise of the USSR in all areas of the economy and economy from the late 20s of the 20th century, the rapid industrialization of the USA in the mid-20th century, the outstanding recovery rates in Germany and the USSR in the post-war period, the technological saturation and external expansion of Japan from the 70s to the 90s, but China? You know, it is developing at a monstrous pace in absolutely all areas, and economies of scale also play a huge role. China's population is larger than the populations of 28 EU countries, the US and Japan combined. In this sense, China has a certain fundamental advantage, which lies in its huge domestic market.

The Chinese miracle was built in several stages. After the collapse of the communist system in the late 80s and in the wake of globalization, China attracted over 3 trillion dollars of direct investment, more than 1 trillion of which was investment in the industrial structure of China by transnational corporations with the rights to establish branches of TNCs in Chinese jurisdiction. Those. This is not the purchase of shares in Chinese companies and long-term direct investments in Chinese debt instruments, but direct investment by foreign companies in the industrial infrastructure of China for the subsequent sale of products on the world market.

China has become the main recipient of foreign investment from global multinationals. Why is China the world's factory, and not India or Africa, where labor is even cheaper?

To conduct business, TNCs require:

Availability of transport infrastructure (roads, airports, ports, railways);

Availability of energy infrastructure and supplies (electricity, fuel, gas);

Utilities (water supply, sewerage, treatment facilities, garbage removal);

Communications and logistics (access to telephone, internet, courier deliveries);

Ensuring the safety of enterprises and employees (low crime rate, developed law enforcement system);

The legal system is sound (guarantees of maintaining ownership rights to investments and assets, protection of intellectual property and opportunities for marketing products);

Educated and able-bodied population. Issues of personnel qualifications are very important, and TNCs are only engaged in advanced training and retraining within the framework of industry specifics, but not in training the base).

Low taxes;

Low intermediate costs for servicing enterprises (cost of rent, electricity, fuel, utility bills, communications, logistics, resource supply, construction costs, and so on);

The full cost of remuneration (salary level, personal income tax, social payments, insurance, and so on).

It is clear that Africa, having huge free labor resources and extremely cheap labor, will not become the new China due to the lack of the necessary infrastructure for doing business, often a complete lack of security and legal guarantees, an uneducated population without a work culture. TNCs will not, at their own expense, build power plants, roads, ports and send the army to guard factories, while training the population.

China has provided all this in full, providing TNCs with sterile conditions for investment and a population willing to work 12 hours a day. Depending on the region and industry, for every job created by TNCs in China, from 8 to 15 new jobs were created through the multiplier. It is clear that the industrial infrastructure needs to be supplied; hence, transport, communications, construction, and the financial sector developed in China, and to ensure construction, the metallurgy, mechanical engineering, construction materials and electrical equipment sectors exploded.

The population from rural areas moved to cities, and the cities themselves swelled quantitatively and improved qualitatively - widespread urbanization occurred. In the early 90s in China, up to 60% of the workforce (or almost 400 million people) were employed in agriculture and fishing, now there are about 200 million or 28%. Almost 200 million working people directly or indirectly settled in industrialized cities and suburbs, and together with their families this is over half a billion. The greatest migration of people in human history in less than a quarter of a century.

The income base generated in China's industrial cluster under TNCs returned to the Chinese economy and was reinvested and multiplied multiple times. Factory workers, having received their salaries, created demand, for example, for food, clothing, household appliances, medical, cultural and entertainment services, and so on. This in turn created jobs in trade, healthcare, leisure and the list goes on. Positive feedback loops created more and more new jobs in technological segments, gradually displacing the archaic.

But China had a fundamental vulnerability. China has de facto surrendered its sovereignty to the will of top managers and owners of TNCs. Chinese exports were not sovereign, because at the initial stage, 80% or more consisted of intermediate and final products owned by TNCs.

As the well-being of the population grows, their efficiency and return decrease (since the wealthier a person is, the less intensively he works in difficult working conditions, in production, in mines, in agriculture, and so on), along with this, appetites and demands grow . China fell into a trap in this sense. The faster the country developed and the welfare of the population grew, the lower the potential ability to service gigantic exports and the lower the attractiveness of China in the eyes of international investors. Therefore, sooner or later there will be a limit to economic growth in the formation of a “global production site.”

The Chinese leadership realized this not 5 years ago or even 10 years ago, but even earlier. In the late 90s, right on the trajectory of world globalization and beyond the aggressive investment in China by TNCs, the Chinese leadership, in turn, used this unique moment to create conditions and factors for a long-term growth model based on generating domestic demand on its own.

The period from 1998 to 2009 was characterized by frantic investment activity and urbanization. Cities were built from scratch, social, cultural, industrial, transport, and network infrastructure developed in all aspects and at all levels. We can say that China built itself up from scratch in just 15-20 years.

Having nothing, China in less than half a century has become probably the most modern and progressive country in the world in terms of infrastructure development and the creation of industrial clusters of all levels - from zero (mining coal, ore, grain, wood) and low-value processing to high-tech areas and ultra-high tech. At the same time, both the infrastructure of the plants and the equipment are the most modern in the world, if we take comprehensive estimates of the entire industry. The expansion is so significant that now less than 2% of fixed assets in China's industry have a service life of more than 25 years. By industry standards everything is very modern. There is nothing like it anywhere in the world.

China wasted no time. The Chinese adopted managerial and administrative experience and learned technological innovations from TNCs. Having understood how to build factories and how to manage them, the Chinese began to create their own.

Each of you knows Chinese counterfeits in clothing, for example, not branded Adidas and Nike, but Chinese Abibas and Nuke, which copy the design, composition and structure of the original fabrics and are often sewn in similar factories and, in particularly neglected cases, in the same factories as the original on the night shift (sometimes even with a complete copy of the logo and design).

So, the specificity of the first phase of China’s industrial expansion on its own was imitation, copying Western brands with minimal changes. You could say the companies are clones of the originals. These products were both exported (usually to poor countries in Asia, Africa, Eastern Europe, and the Middle East) under the guise of “nonames” and occupied a niche in domestic markets. The proportion is approximately this: 20-25% for export, the rest for ourselves. This applies to light industry.

But with mechanical engineering, not to mention high-tech, it’s more complicated. If you take a modern German BMW or an American processor into your “garage”, you will not be able to create a copy, even after thorough reengineering. Here we already need brains, stands, laboratories and technology.

The transition from automatic copying to creating your own products in China happened very quickly (in 7-10 years).

The period from 2009 to the present is characterized by some attenuation of uncontrollable investment activity in fixed assets with a concentration on domestic demand, optimization of production chains and capacities, extensive technology development with the main goal of creating our own competitive technologies and products that can effectively and without compromise replace imports ( essentially import substitution), and in the future to export. First to nearby Asian countries, then to Europe.

China has begun to focus more on quality rather than quantity. Increasing labor productivity, efficiency of production facilities, increasing the efficiency of use of infrastructure and fixed assets, real and not imaginary diversification of all systemically important industries that provide high added value. In such a way that the crisis in one industry is compensated by growth in others.

Since 2009, a full-fledged middle class has begun to crystallize in China - those who do not experience any problems in everyday operational expenses and can, WITHOUT attracting credit resources, purchase food, clothing, household appliances, digital equipment, pay utility bills, medicine, education, and attend entertainment events, do major renovations of premises (every 5-7 years) and travel (once a year), while even saving cash. However, when buying real estate or a car, you may need to borrow. There are now more than 65 million people in China (slightly less than 10% of the employed), which in absolute terms is TWO times higher than in the Eurozone, where about 32-34 million people out of 151 million employed belong to the middle class and 37-40 million in the USA from 150 million employed. The middle class in China is comparable to the middle class in the United States and the Eurozone combined, and this is a remarkable achievement, considering that 20 years ago in China, no more than 7 million could classify themselves as middle class.

China began to focus on developing human capital and technology. The authorities were quite clearly aware of the threat that TNCs could pose, because a change in the situation (economic, financial or political) and the subsequent exit of TNCs from China could destroy the Chinese economy, so the Chinese need their own companies and technologies.

As of 2014, China invested in R&D (both fundamental and applied from the state and business) over $370 billion in PPP terms, having overtaken the united progressive Europe of the 15 leading countries in 2013, and in 2008 made Japan. In the mid-90s, Chinese investments in science were approximately the same as in Russia, but now they are 10 times higher. China is still behind the US (460 billion), but by 2018 (in just 2 years) China will become the most active investor in science and technology in the whole world! In this area, the effect of accumulating a critical mass of knowledge and experience is important. Technological breakthroughs do not occur linearly, they have a stepwise formation, so without any doubt, China is on the right path and in the long term everything will be fine with it, unlike Russia, which has chosen the path of degradation and decay.

We not only have a flawed and archaic economic structure of the late 19th century, but we are also gradually accumulating a fundamental gap in technology at all levels from progressive countries, which will be almost impossible to compensate in the foreseeable future without extraordinary solutions and fundamental changes in policy and scientific and technological orientation. But, as you know, in Russia there is no and will not be an anti-crisis plan - the national authorities are happy with everything, they are not interested in science and technology, and even less so in economic transformations. This is compounded by the critical obsolescence of fixed assets, the gradual extinction or retirement of qualified personnel from the USSR, and almost no new ones appear (and those who do appear, many leave the country to places where their talents can be used).

China is simultaneously moving from a model of export orientation of a non-sovereign format under TNCs to the creation of a highly diversified and developed economy of a new type with its own technologies at all levels, with a new generation of qualified personnel, scientists and geniuses. At the same time, the stage of imitation and copying quickly passes. The Chinese learn quickly and create their own technologies. China is actively working on the domestic market (which is very capacious), cultivating a middle class; in the future they will move on to external expansion and capture of sales markets.

This is only in general terms with a minimum of numbers and textures. China is fascinating. This is a real success story. There is a lot of exciting, enchanting data there, especially in comparison with other countries. So I'll continue soon.

The rapid and successful development of the economy is due to the large volume of industrial production and the correct implementation of the country's export policy.

Financial system

China's main currency is the yuan. It is believed that the yuan can become a competitor to the American dollar. However, currently the yuan is directly dependent on the dollar, and changes in its exchange rate are strictly controlled by the state. Since China is a leader in export trade, an increase in the value of the yuan will negatively impact all sectors of the economy.

Now China ranks first in the world in terms of foreign trade volume. The most popular items are electronics, cars, toys and textiles.

China not only successfully exports products, but also invests in the economies of other countries. For example, the volume of investments in states located on the African continent amounts to more than a trillion dollars. In addition, Beijing is successfully implementing its projects in the construction, energy and transport sectors.

Development of economic sectors

Since the end of the 20th century, China's economy has developed rapidly. The largest part of the country's GDP is occupied by industry, agriculture and the service sector. The most actively developing:

mechanical engineering;
automotive industry;
healthcare;
information technology industry;
Internet trading.

The rapid pace of development is especially noticeable in agriculture and industry.

Agriculture

All lands suitable for arable land are actively used. Most of the land is grown with rice, which is the main crop. In addition to rice, soybeans, potatoes, wheat and other crops are grown in China. In livestock farming, China occupies a leading position in the breeding of chickens and pigs. Sheep farming is developing rapidly. The large number of reservoirs in the country contributes to the active growth of fisheries. The pace of development of the agricultural industry directly depends on natural factors. Constant droughts and floods threaten its further development.

Industry

Construction and industry form the backbone of China's economy. A fifth of the world's industrial output belongs to China. Almost half of the country's GDP comes from these industries. The automotive industry, the production of personal computers and steel are developing at an active pace. Particular attention is paid to the development of the energy industry. A large amount of resources is invested in the development of nuclear and alternative energy (construction of wind farms).

The influence of foreign capital on the Chinese economy

The main feature of the Chinese economy is state control over foreign investment in a number of industries. For example, the intervention of foreign partners in such industries as:

mining industry;
production of nuclear fuel and radioactive materials;
air travel.

In social activities, there is a strict ban on the presence of foreign capital in the following areas:

GMO production;
publishing activities;
social studies.

Government procurement is available to foreigners, but the quantity is regulated by Chinese law. In the financial sector, the “rights” of foreign investors are also limited. In banks, the volume of foreign investments should not exceed 25%, in the securities market - no more than 49%. In the telecommunications and construction industries, the presence of foreign investment is no more than 50%, and in the construction industry, the participation of foreign capital is limited to the construction of office buildings, hotels and inns.

China's economic development can rightfully be called phenomenal. China is a leader in many economic sectors and has a significant influence on global trade.

Introduction.

The People's Republic of China (PRC) is the third largest country in the world in terms of territory. Its area exceeds 9.6 million square meters. m. Population - over 1300 million people. The Chinese make up 94% of the population, with over 50 nationalities living in total.

China is divided into 26 provinces and three central cities - Beijing, Shanghai, Tianjin.

The economic transformation in China, which has been going on for about two decades, has attracted noticeable and growing interest in the world. Interest in this country is not accidental. China, being one of the oldest states in the world, has achieved impressive success in the real sector of the economy for the first time in its centuries-old history. A number of signs show that the country will continue to develop in an upward direction in the near future. China has a chance to repeat the experience of Japan and South Korea.

The necessary internal prerequisites for this exist. China has a large territory, is the largest country in terms of population, and occupies an important geostrategic position, especially in the Asia-Pacific region (APR).

The specifics of the Chinese version of systemic reforms are of great interest. The leadership of the PRC still adheres to the official ideological course towards building socialism; the country maintains the traditional political system for socialist countries with the monopoly of the Communist Party on power.

In China, decisive steps have been taken to transfer the economy to a market economy. At the same time, China managed not only to avoid a transformational recession, which is almost a general pattern of the initial stage of reforms in post-socialist countries, but also to ensure high dynamism of economic development and a stable improvement in the living standards of the population.

China, whose economy is largely based on public ownership and develops according to plan, is a fairly large industrial state. In terms of total industrial production, it took 4th place, and in terms of the number of enterprises - 1st place in the world.

Stages of economic development.

The Cultural Revolution in China, carried out since 1967, caused enormous harm to the Chinese economy. The model is based on the priority of agricultural development and a strong central government. Industrial production declined. The country is facing very serious socio-economic problems. After 1976 China has changed its course of economic development.

Since 1978 a course has been taken towards the formation of a rich democratic socialist state with a per capita income of the population at the level of moderately developed countries of the world.

Since 1979 China has set a course for the transition from a closed society to an open one, counting on the influx of foreign investment into the country for the modernization and development of industrial production. The geographic proximity of Hong Kong was a major advantage for foreign companies that began to locate labor-intensive, export-oriented assembly plants in China.

To stimulate investment, the Chinese government created 4 special economic zones: Shanghai, Zhuhai, Shantod and Haikou, where the flow of foreign direct investment from Hong Kong, Taiwan and the United States went.

In 1984 14 coastal cities and ports were opened. Western investors have the opportunity to enter China's large domestic markets.

In 1985 In China, 18 more cities were opened that had an excess of cheap labor and where the production of primary and processing industries was located. This entailed the relocation of entire factories and modern production complexes of TNCs to these regions and the modernization of local enterprises.

In 1986 The Chinese government has released a list of 22 regulations aimed at improving the investment climate. Special exchange offices were opened for investors who had the opportunity to buy hard currency and imported raw materials here.

In 1985-1986 these cities accounted for 23% of China's industrial output and 40% of its exports.

In 1990 A new corporate policy was introduced, and regulations on copyright protection came into force. This has boosted investment from Japan, the US and Western Europe.

Since 1992 In China, measures are being taken to liberalize the service sector and the prerequisites for joining the WTO. As a result, previously closed sectors of the economy were opened: real estate, transport, telecommunications, retail trade, etc.

In 1995, a law was passed allowing foreign companies to create holdings.

China is constantly taking steps to attract foreign investment. They include: tax holidays, preferential import tariffs, easing rules for the admission and dismissal of foreign personnel.

In general, four stages of China's economic development can be distinguished:

1. Transition from a natural, semi-natural economy to a planned commodity economy.

2. The transition from an agricultural to an industrial society.

3. Transition from a closed society to an open one.

4. Transition from a society of “moral principles” to a legal one.

Type of economic development.

There are two types of economic development:

· Intensive – based on increasing the scale of production through qualitative improvement of production factors, i.e. improvement of means and objects of labor, personnel qualifications.

· Extensive – achieved through a quantitative increase in factors of production, with a constant technical basis.

Despite the fact that China receives huge foreign investments aimed at industrial development and the introduction of new technologies, the economic growth of the Chinese economy is achieved mainly due to an increase in production factors (cheap labor, etc.).

Therefore, in the presence of elements of an intensive type of economic development, the Chinese economy is developing according to an extensive type.

Level of economic development.

China's economy is developing at a high rate - 7-10% per year. However, this occurs due to extensive factors and structural changes. The manufacturing (light) and service industries have developed greatly. By 2002 the share of new industries in total industrial production should increase to 30%. China has about 2,100 overseas firms.

Despite the high rates of economic growth, the increasing share of China in global industrial production and GDP, GDP production per capita, and labor productivity remain significantly lower than those of developed countries. But the PRC has the necessary potential to maintain high rates of economic development, further integrate the PRC into the regional and global economy, and transform the country into a power comparable in GNP size to Japan.

Social structure of the economy.

Since the beginning of the 80s. The Chinese government was going to reform the banking system. In China, at that time, there was a two-tier banking system:

The top tier - the People's Bank of China - was supposed to become the country's central bank, responsible for the stability of the national currency, while interference in the affairs of the bank by central and local authorities was excluded.

The lower tier - state specialized and universal banks - were supposed to become purely commercial banks, that is, their activities would be reduced to making a profit.

However, adopted in 1995 The law on the PBOC left in force the principle of direct administrative subordination of the PBOC to the State Council of the People's Republic of China. The Law on Commercial Banks, also adopted in 1995. confirmed the preservation of the national credit plan as the main instrument for regulating financial flows.

The tax system has also undergone reform. Since 1994, the income tax rate has been 33% for all forms of ownership.

Economic strategy and policy.

Joint ventures operating in priority sectors of the economy received special benefits. China is characterized by the creation of joint stock enterprises with foreign participation from 22 to 50%. Foreign investors provide enterprises with technology, equipment and financing. The Chinese side provides infrastructure, manpower and local connections.

According to the law, technologies and know-how provided by a foreign party must be advanced and meet the needs of the country. Chinese authorities oblige investors to purchase raw materials, fuel and auxiliary equipment from local suppliers and sell products outside of China. This helps the state accumulate foreign exchange reserves.

Characteristics of GDP.

China's GDP is approximately 3.2% of the gross world product (GWP) - about 1 trillion. $.

China's GDP includes the total volume of final goods and services produced on its territory. For example, some of them:

· Electricity production – 1100 billion kWh or 8.9% of global production.

· Oil production – 160 million tons or 4.73% of world production.

· Iron ore production – 38 million tons.

· Production of non-ferrous metals:

Aluminum – 9.1% of world production.

Copper – 8.8% of world production.

Lead and zinc – 14.7% of world production.

· Production of cotton fiber – 4.8 million tons.

· Wool production – 141 thousand tons.

· China is in third place in the number of cattle - 104 million heads.

Data 1994-1996

Industry.

A large diversified industry has been created in the PRC. Along with the traditionally developed industries (textile, coal, ferrous metallurgy), new industries such as oil production, oil refining, chemical, aviation, space, and electronics have emerged. In terms of the total number of industrial enterprises, China ranks first in the world. Currently, about 3/5 of all labor resources employed in the industry work in heavy industry, and half of the industrial output is produced. As throughout the world, new and cutting-edge technologies are being introduced in China, and much attention is paid to resource and energy saving.

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St. Petersburg State University of Architecture and Civil Engineering

Department of Economic Theory

Essay

China's economic successI: causes and results

Completed by: student of group 2-M-I

Bobchenok Pavel Sergeevich

Checked by: Lesnaya Maya Ivanovna

Saint Petersburg

Introduction

In the world press, today's China is spoken of as the “major phenomenon” and at the same time the “great unknown” of the 21st century. Indeed, its significant successes achieved over a quarter of a century are an impressive international event at the turn of the 20th and 21st centuries. But these successes are the result of a number of factors.

Purpose of the work: to find out why the Chinese economy has achieved such power.

Job objectives:

· Consider the features of China's economic policy;

· Find out what factors contributed to such success.

Object of analysis: China.

Subject of analysis: economic relations.

When the People's Republic of China (PRC) was founded in 1949, the country was in devastation as a result of decades-long hostilities and inflation. The government was given a number of tasks: consolidating power, restoring public order, and solving the problem of mass unemployment and hunger. In 1975, Chinese Prime Minister Zhou En Lai put forward a new economic program, the goal of which was to take a leading position among the world's economic powers by the year 2000. This program was aimed at accelerating the rate of growth in industry and agriculture, as well as the development of science. After the death of Mao Zedong, the role of ideology in government policy decreased markedly.

Since 1978, the basis of China's economic policy has been the thesis of the indivisibility of consumer welfare, economic efficiency and political stability. The emphasis was on increasing the level of personal income and consumption, introducing new systems of incentives, management and productivity improvements. In August 1980, a controversial reform program was adopted aimed at reducing the role of central government in favor of a mixed economy with planned market methods of management. This program was reflected in China’s sixth five-year economic development plan adopted at the same time. Key elements proposed were: implementation of agricultural reforms, including long-term land leasing and allowing farmers to produce cash crops and engage in non-farm activities; the right of enterprises to self-government; development of greater competition in the market; reducing the tax burden of non-state-owned enterprises, and finally, developing direct contacts between Chinese and foreign trading companies. Over the past 10 years, China has made impressive economic progress. GDP growth rates averaged 7% per year and are projected to remain at this level.

Since the early 1980s. China's government budget regularly runs into deficits that have been growing for more than 20 years. Since 1982, the state budget has consisted of two parts - the state budget and the construction budget. In particular, in 2002, state budget revenues amounted to 1890.4 billion yuan, and expenses - 2205.3. Most of the state budget of the PRC is formed from taxes - 93.4% (2001). There are only five types of taxes: 1) trade and industrial tax, which makes up the majority of tax collections (83% of all taxes); 2) customs duties; 3) agricultural tax; 4) income tax from state enterprises; 5) income tax from collective enterprises. A significant portion of state budget expenditures goes to capital construction (34.2% of all expenditures), development of the social sphere, culture and education (27.6%), defense (7.6%) and administrative expenses (18.6%) .

The starting point in the formation of export production areas and the establishment of foreign economic relations was the creation of special enclaves in the provinces of Guangdong and Fujian. Then areas of economic cooperation arose in the delta of the Pearl River (Pearl) in Guangdong province, in Fujian, in the delta of the Changjiang (Yangzi) River, where the economic complex of Shanghai, Jiangsu and Zhejiang provinces emerged. The development of economic cooperation areas on the coast of the Bohai Gulf began. Here, the production complexes of Beijing-Tianjin, as well as the provinces of Liaoning and Shandong, became the base centers. Their creation required huge capital investments. In the second half of the 1990s, the share of government and business investment in export production areas consistently exceeded half of the country's total investment. These areas gradually became the main engine of the country's economic growth. In 2000 they created 56%, In 2005, over 58% of the GDP of the entire country.

Economic development was accompanied by a dynamic process of urbanization. In 1984, at the beginning of the reform of the urban economy, there were 465 cities in the country, in 2005 - 657. During this time, the number of villages decreased by almost 2.5 times. Almost 75.5 thousand volosts disappeared. Their number decreased by 5.7 times. The urban population increased from 240.2 million to 562.1 million people.

Enormous successes have been achieved in foreign trade. China has become one of the main players in the global market. Foreign trade has become a powerful engine of the economy. The volume of exports and imports amounted to 39% of GDP in 1995, 40% in 2000, but already about 64% in 2005. Thanks to the rapid growth of foreign trade, China's share of world trade increased from 4.6% in the 90s to 9.4% in 2007. Along with the USA, Germany and Japan, the country has formed a kind of club of the world's leading trading powers.

China has become one of the largest recipients of foreign capital, ranking third in the world and first among developing countries in terms of inflows from abroad. The amount of foreign capital used increased from $10.3 billion in 1990 to $63.8 billion in 2005. The influx of foreign capital investment played a leading role in the development of foreign trade and international economic relations of the PRC. The share of enterprises with foreign capital in 2005 .accounted for 58.5% of exports and 58.7% of imports. In mid-2006, the total volume of Chinese direct investment abroad exceeded $3.6 billion.

The country has acquired the role of an important participant in geo-economic processes. Considering itself as a “strategic partner” in relations with many countries of the world, China simultaneously and invariably acts as a competitor and adversary, seeking to realize its long-term national interests. China has become a major, recognized player in the geopolitical arena. Without its participation, decisions are not made

China is the owner of the largest foreign exchange reserves, placed mainly in securities of the United States and partly EU countries. In 2006, their volume exceeded $1 trillion. The increase in foreign exchange reserves was a natural result of the implementation of the strategy of export orientation of the national economy over 15 years, widely known under the motto “Go outside!”

The largest contribution to GDP comes from industry. Industrial production in China grew at a faster pace - in 1979-2001. on average 11.5% per year. Production is growing most rapidly in export-oriented industries (light, food, textile industries, mechanical engineering and electronics), in high-tech industries, as well as in the production of durable consumer goods (passenger cars, computers, mobile phones, televisions, household appliances).

Rice remains the main grain crop, which is harvested three times a year in the southern regions of the country. Important branches of agriculture are livestock farming and fishing. China ranks first in the world in the production of meat, eggs, honey, bee products, silkworm cocoons, total livestock, and poultry.

According to data for 2001, highways rank first in length in China - 1,698 thousand km, of which only 19.4 thousand km. make up expressways. The length of the airlines is 1553.6 thousand km, of which 517 thousand km are international airlines.

In China, the functions of the central bank are performed by the People's Bank of China. There are also four specialized industry banks: 1. Industrial and Commercial Bank of China; 2.Agricultural Bank of China; 3.Bank of China; 4.People's Construction Bank of China. In 1994, three “policy” banks were created - the State Development Bank, the Agricultural Development Bank of China and the Export-Import Bank of China, which began to compete with the four sectoral Chinese banks. In 1995-96 14 national and regional commercial banks were created, as well as a large number of various non-banking financial institutions, which began to play an active role in the financial life of the country. There are 2 stock exchanges in China - in Shanghai and Shenzhen.

Five key factors have underpinned China's remarkably rapid economic growth over the past three decades: the introduction of market mechanisms, openness to trade and direct investment, high savings and investment rates, transformation of the labor force structure, and development of the education system.

Before the reforms, officials in China's State Planning Committee were responsible for distributing basic industrial goods such as steel and machine tools, while the state distributed consumer goods. The State Price Committee often arbitrarily set prices for many goods, so that there was sometimes no direct relationship between income and labor productivity .

On the eve of the reforms, there was no labor market in China. In cities, there was a state distribution of jobs among graduates of educational institutions, and the salary system was also established by the state. The state also played a very significant role in the distribution of capital. A quarter of all investments were financed from the state budget.

Over the first two decades of economic reform, market forces gradually replaced non-market institutional orders. The share of planned production fell sharply, and in determining prices for the vast majority of goods and services, state planning was replaced by market mechanisms. Competition appeared in urban labor markets, wages were no longer fixed, and labor mobility increased significantly. The role of the budget in financing investments rapidly declined.

The second key driver of economic growth over the past three decades is the increasing openness of the global economy, which has already led to marked changes in market structure and increased competition. Domestic producers have to compete not only with huge volumes of imports, but also with a large number of goods produced by foreign firms within the country. Because these foreign firms have advantages in technology, design, and marketing, they stimulate competition in the domestic market. Chinese leaders understood that domestic firms needed to improve their efficiency to remain competitive.

The third factor that underlies rapid economic growth is high rates of savings and investment. The established level of investment in China is much higher than in other developing countries with comparable levels of per capita income. A high level of investment leads to a rapid increase in fixed capital, which, in turn, contributes to the redistribution of labor from the agricultural to the modern sector, which has a beneficial effect on economic growth.

The fourth factor that has significantly influenced the rate of economic growth in China is the sectoral transformation of the workforce. The share of people employed in agriculture has fallen from 70% at the beginning of the reforms to 50% today. As the labor force moves from agriculture to industry or services, overall productivity increases as a result. Thanks to investment in primary education, China already had a relatively high literacy rate for a low-income country in the run-up to the reforms. Adult literacy in 1977 was 66%, almost 2 times higher than in India (38%). Adoption of the Compulsory Education Law of 1986, which increased the duration of compulsory schooling from five years to nine. By the mid-90s. adult literacy was just above 80%. This gave China a key advantage in attracting foreign investment in industry. Most foreign manufacturing in China involves component assembly, and the workforce is overwhelmingly female, mostly from rural areas.

Over the next decade, each of these factors will continue to contribute to economic growth. Structural transformation of the labor force will also remain an important positive factor for economic growth, as the share of workers still employed in agriculture will continue to decline in the coming decades. China will likely continue to rely on investment in education, and the first decades of reforms contributed significantly to the rapid development of the economy.

Centralization of power has been and remains the most important condition for the implementation of ambitious plans for accelerated economic growth, as well as overcoming acute problems and contradictions along this path. And like every centralization, in China it showed a tendency to weaken/erode. This was the price the state had to pay to achieve its goal. In addition, China has directly or indirectly contributed to the complication of many resource, and with them, environmental and economic problems of the world. Environmental destruction has reached enormous proportions.

While all the major drivers of economic growth will be favorable for another decade or so, China faces three daunting challenges to ensure continued growth.

List of used literature.

economic reform china

1. Valery Romanyuk. Myths and realities of the Chinese miracle. "News".

2. Gelbras, The price of China’s economic success, “World Economy and International Relations.” 2007, No. 9, pp. 26-34.

3. Melyantsev, Economic growth of China and India: dynamics, proportions and consequences, ”Me and Mo”, 2007, No. 9.p.18-25.

4. Mikheev, Russia-China: “Reloading” relations, “World Economy and International Relations.” 2010, No. 6.

5. Fred Bergsten, Bates Gill, Nicholas Lardy, Derek Mitchell. China. What you should know about the new superpower. “Institute for Comprehensive Strategic Research”, 2007, 256 p.

6. Encyclopedia of the countries of the world.”Economics”, 2004, 1319c.

7. http://rutube.ru/tracks/3120241.html?v=6dd0d192f9256ef1e7d05ce01999a869

8. http://www.ereport.ru/graph/gdpchina.htm

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