China Unbalanced Essay

3712 Words Feb 16th, 2015 15 Pages

In this case study, we will attempt to answer what measures China took in preparation for acceptance into the WTO and how it adjusted to its eventual admittance in December of 2001. We will also review some of the problems associated with China’s economic growth strategy.
We will begin our analysis of these questions by examining China’s economy at the time of Deng Xiaoping’s accession to power in 1978 and the economic growth strategy he and his successor implemented which ultimately led China to ascension into the WTO. We will then review various conditions imposed upon China by the WTO and how China reacted to those changes and to what extent these lead to China’s current status and interaction
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Xiaoping implicitly initiated implementation of two of the three fundamental pillars of a market system, namely freedom of choice and competition. On the other hand he retained ultimate power over the people as was shown by his imposition of a one child policy to curb population growth. This imposition on the Chinese people is reflective of the country’s centrally planned market as it removed the choice of its citizens to procreate and enforced severe measures to ensure compliance by the people. This clearly shows that despite China’s economic transition towards a more free market style, the objective was economic growth and not a change from its communist political system. Western society saw this law as somewhat barbaric, however, one could conclude that it was done, along with increased farming, to improve the welfare of the Chinese citizens and reduce poverty among the masses.

The government then used the farming surplus to finance town and village enterprises (TVEs) which produced labor intensive products such as clothing, shoes, ornaments, small electronic items and eventually automobiles for export to Hong Kong. TVEs moved from the production of low value added products into a more diversified value added product mix.Although these TVEs were owned by local or provincial authorities, the growth in their popularity (30% annually) provided employment for approximately 14% of the

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