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, the

economy was based after the soviet model. So, accordingly, the communist China severed its ties with the capitalist world. It

substituted imports with domestic goods using its own resources. However, it was also very dependent on Soviet resources and

advices.

The aim was to create a model of state-owned heavy industries sector from the capital accumulated from agriculture. This model

allowed China to use its resources to establish the foundations of an industrial economy. Employment and social welfare were

assured to all citizens, and China moved ahead of most developing countries in educating its citizens and ensuring better health

for them. The Chinese leadership took major policy decisions in the 1970s. This was because industrial production was not

growing fast enough, international trade was minimal and per capita income was very low. China ended its political and

economic 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 eliminated

only in Special Economic Zones (SEZs) where foreign investors could set up enterprises. In China, the state played and

continues to play a central role in setting up a market economy. Privatisation of agriculture led to a remarkable rise in

agricultural production and rural incomes. High personal savings in the rural economy led to an exponential growth in rural

industry. The Chinese economy, including both industry and agriculture, grew at a faster rate. As of 2020, Chinese have come a

long way. With the second largest economy of the world, it dominates the global economy. The paper analyzes its impact on

Pakistan, Africa and USA.