Trade and investment issues between China and other econmies Essay

Trade and investment issues between China and other econmies - Essay Example However, after 1978, the country has experienced actual growth of more than 9 percent annually. In the topmost years, Chinas economy grew more than 13 percent. For the last 15 years, the nation has increased its per capita income (Zhuli and Mohsin, par. 1). Furthermore, some experts are even predicting that in about 20 years, the economy of China will be larger than US. An IMF research team that recently examined the sources of Chinas growth reached a surprising conclusion. The constant productivity increase was the driving force behind Chinas economic boom. According to Zhulu and Mohsin (par. 5), productivity gains in the years 1979 to 1994 accounted for more than 42% of the growth of China. By the early 1990s, it had overtaken the capital as the most important source of that growth. A traditional development view in which capital investment takes the lead is marked from this. The productivity jump originated in the reforms of the economy begun in the year 1978. Additionally, the much earlier study on the development of the economy have suggested an important role of capital investment in the growth of the economy. It has also proposed a sizable portion of the recent growth of the country is in fact accredited to capital investment that has made China more productive. The meaning of this is that better technology, new machinery, and more infrastructure investment has helped China to raise its output. Higher productivity has performed the most recent economic miracle in China, Zhuli and Mohsin (par. 10) state. The countys productivity increased at a yearly rate of 3.9 percent during 1979 to 1994, compared with 1953-1978s 1.1 percent. Output growth productivity share exceeded 50 percent. Such explosive growth is outstanding. Chinas economic growth rate of almost 4 percent puts the country in a class by itself (Zhuli and Mohsin, par. 10). Pre and post-1978 China experts indicate that market-oriented reforms embarked on