How The Inflow And Outflow Of Fdi In China Changed Their Economy Global Economy Essay

2150 words - 9 pages

As one of the great world leaders economically, China has proven itself to be not only a very diverse country, but also that it is well adapted to the changes seen in the 21st century. With a population of over 1.36 billion people and a population density of 141 people per sq. km (China, 2012), China must continue to expand upon the economic and political developments that have been a contributor to their wealth and success as a country. However, with an aging population and median age of 36.3 years’ old that’s still rising (China, 2012), the political decision to remove the one child policy allows China to increase its percentage of the younger generation. As an aging population, if left to increase, would effect China’s growth economically as they would find themselves running out of young innovative educated people who are a contributing factor to any country wanting to grow. A growth that could hinder China’s aim to increase the percentage of population who through globalisation now live in urban areas, as the current percentage of China’s population who still live in rural areas is 46.8% (China, 2012).
1949 proved to be a very important year in China’s political history, as the civil war broke out the emergence of the Peoples Republic of China was introduced. China was now politically stable and was no longer under the ruling of the military and free from the Soviet Union alliance. Though China, through Mao’s ruling has gained a Marxist ideology, according to Joseph (2014: 151-156) Marxists view the world through socioeconomic classes and that Mao Zedong believed that Marxism was the ‘true meaning’ of ‘practical ideology’. Nonetheless, China today still carries this ideology even after the Mao era ended, using the ideology to revolutionise the way that China thinks about the proletarian population in the rural areas.
Though following the ideology and being politically stable allowed China to move its focus to trading internationally and rebuilding their poor economy, the only way to successfully do this would be to open up China to world trade. A move that was finally successful as ‘1978 marked a watershed in Chinese economic policy.’ (Breslin, 2013:84) Chinese leaders had made the decision in 1984, to open up fourteen selected provinces along the coast and begin international trade, mainly with the United States who at the time were one of the front leaders among the trading countries. However, Breslin (2013) noted that it was in fact 1992 that China truly became a contender for the leading trading power, with 1993 being the year that China had been able to negotiate deals with the USA to become one of the major inflows of FDI to China.
Nevertheless, China’s recent economic growth in the 21st has been due to changes and alliances made not only with new international connections but also majorly from joining the World Trade Organisation (WTO). Becoming a member in 2001 (China - member information, 2001) meant that China now had the ability...

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