A Brief Summary of China’s Astounding Economic Growth

In 1950, China’s foreign trade was a meager $1.14 billion. (Chang 1995, 956). According to Cable and Ferdinand (1994) “the most tangible economic manifestation of China’s ‘open door’ policy is its trade performance. Its trade turnover grew from $15 billion in 1977 to $165 billion in 1992.” (245) Avery Goldstein (1997-1998) provides additional data which shows a more complete picture of China’s trade volume when combined with the data from Cable and Ferdinand (1994). Goldstein states that “over the same time period [the 1980’s to the mid-1990’s], China’s trade volume ballooned from $38.2 billion to more than $250 billion.” (41). During the first ten months of 2006, according to the Chinese Government (2006), China’s foreign trade volume increased 24.1 percent “year-on-year” and reached $1.425 trillion. The increase in China’s trade volume from $15 billion dollars in 1977 to $1.425 trillion during the first ten months of 2006 equates to an astounding 9,400% total increase in a little less thirty years.

The present and projected growth of China’s economic growth continues to be on the rise. Prior to the February 27, 2007 drop in the Chinese market, the Shanghai Index had gained 12% year-to-date and, if it continues at this pace, China will see its fifth straight year of double-digit growth. In 2006, the Chinese economy grew 10.7% and projected growth for 2007 is at 10.8% according to Goldman Sachs (Cheok, 2007). Further, the 2008 Olympics in Beijing are bound to bring in substantial revenues from tourist and media dollars related to the event which will likely continue the double-digit growth for a sixth year.

China’s middle class continues to rise and current estimates place the number of Chinese middle-class citizens at 400 million and it is this population within China that will provide a domestic market for goods that would normally be sold to other countries. Also, according to Vogel (2004), in addition to China’s rising middle-class she has roughly 150 underemployed rural laborers which provides a “virtually unlimited supply of future workers, low wages can continue for a long time to come. Wages can therefore remain low and China can continue to compete in labor-intensive production.” (46)

References

Cable, Vincent., and Ferdinand, Peter. 1994. “China as an Economic Giant: Threat or
Opportunity?” International Affairs 70: 243-261.

Chang, Maria Hsia. 1995. “Greater China and the Chinese ‘Global Tribe.’” Asian
Survey 35: 955-967.

Cheok, Dora. 2007. “A China Affair” CNBC.com,
http://www.cnbc.com/id/17806732/for/cnbc (March 30, 2007).

Chinese Government. (2006). “China’s Foreign Trade Volume Hits New High.”
http://english.gov.cn/2006-11/13/content_441227.htm (November 13, 2006).

Goldstein, Avery. 1997-1998. “Great Expectations: Interpreting China’s Arrival.” International Security 22: 36-73.

Vogel, Ezra F. 2004. The Rise of China and the Changing Face of East Asia.” Asia
Pacific Review 11: 46-57.