Chinese Dominance in the Global Economy -A study of effects of how China’s economy affected other economies.

Authors: Mihir Sampat , Kankana Ghosh

Pages: 73-78

Abstract:

The story of economic development in China is interesting. Since its inception of People’s Republic of China in 1949, theeconomy was based after the soviet model. So, accordingly, the communist China severed its ties with the capitalist world. Itsubstituted imports with domestic goods using its own resources. However, it was also very dependent on Soviet resources andadvices.The aim was to create a model of state-owned heavy industries sector from the capital accumulated from agriculture. This modelallowed China to use its resources to establish the foundations of an industrial economy. Employment and social welfare wereassured to all citizens, and China moved ahead of most developing countries in educating its citizens and ensuring better healthfor them. The Chinese leadership took major policy decisions in the 1970s. This was because industrial production was notgrowing fast enough, international trade was minimal and per capita income was very low. China ended its political andeconomic isolation with the establishment of relations with the United States in 1972.The privatisation of agriculture in 1982 was followed by the privatisation of industry in 1998. Trade barriers were eliminatedonly in Special Economic Zones (SEZs) where foreign investors could set up enterprises. In China, the state played andcontinues to play a central role in setting up a market economy. Privatisation of agriculture led to a remarkable rise inagricultural production and rural incomes. High personal savings in the rural economy led to an exponential growth in ruralindustry. The Chinese economy, including both industry and agriculture, grew at a faster rate. As of 2020, Chinese have come along way. With the second largest economy of the world, it dominates the global economy. The paper analyzes its impact onPakistan, Africa and USA.