It is sixty years since a communist regime was established in China. It was officially declared as “the People’s Republic of China following the establishment of a communist regime.
China made progress in many areas over sixty years. China is about to overtake Japan as the world’s No. 2 economy and Germany as the No. 1 exporter.
China is on tract for 8% growth this year despite the global economic recession. Western countries are still beset by the ramifications of the global economic crisis, known as “credit crunch”.
China’s entry into World Trade Organization helped its economy be stronger than before. It would not be an exaggeration to say that its entry into WTO partly accounts for the current level of economic progress it has achieved.
China now produces commercial jets and high speed trains. Experts say that they were produced using western technology. Though they are not a completely Chinese innovation, their production cannot be underestimated.
Though some experts argue that the Chinese government’s unwillingness to open its economy completely would be an obstacle to the realization of its dream to be economic superpower, China is trying to the best of its ability to turn that dream into a reality.
Beijing, Shanghai and dozens of other cities are building vast subway networks to complement highways already in place. The Chinese government is courting the companies to make investment in new industries such as biotechnology. China is aggressively promoting wind power and high speed trains. Millions of small private companies have sprouted in China.
In 2008, 8,000 cars were exported to Russia and developing countries from Africa to Latin America.Domestic car makers such as BYD, Auto, Geely, and Chery have thrived by developing subcompacts (small cars) that sell as little as $4,400. Science and Technology Ministry in China has set a goal of producing 500, 000 vehicles by 2011.
BYD vows to be China’s largest carmaker by 2015. It also vows to overtake Toyota as the world’s leading brand by 2025 by producing 10 million vehicles a year, half of which are intended for export.
Chinese government is persuading its citizens to spend more and save less. Cities and provinces are boosting research spending and retraining workers. China is the pool of the world’s biggest science and engineering graduates. China exports high-tech goods. Last year, it exported $416 billon worth of high-tech goods.
Despite many good signs of economic progress, there are of course some challenges ahead.
Some critics reprove China for reneging on the promise it made to open its economy fully before joining WTO. In June 2009, National Development and Reform Commission ordered that wherever possible goods produced by Chinese owned companies be used in any project funded by Chinese government.
According to Standard Chartered Bank, a huge proportion of the new loans go to the government-controlled enterprises and only less than 20% go to small and midsize enterprises which are private. Experts argue that it makes it impossible for creative and innovative private enterprises to have enough capital. The failure of innovative enterprise does not lead to innovation.
China is accused of shifting from accelerating market reforms toward a more state-controlled economy. China does not want to allow foreign companies to play a pivotal role in strategic industries such as wind turbines and nuclear power generator. It is trying to whittle down the role of foreign companies in such industries. It is likely to worsen the economic relation of China with other capitalist countries, which might have adverse effect on Chinese economy.
Commercial Aircraft Corporation of China (Comac), which is state-owned, produces 90-seat commuter jet called “ARJ21”. It unveiled a middle range commercial jet dubbed “C919” in September, 2009. China wants to be self –sufficient producing everything itself. But, some experts maintain that it still lacks technological capabilities to produce these jets without relying on western technology. According to them, the avionics (electronic devices), engines and other key systems on the ARJ21 come from western suppliers such as Honeywell, General Electric, and Rockwell Collins.
The technologies used in wafer factories are two generations behind those of Taiwan, the US, Japan, and South Korea. Most companies in China do not have technology and money to invest in research and development.
Despite the fact that China has endeavored to promote car industry, cars produced by Chinese industries are still dominated by the foreign brands such as Volkswagen, Toyota, and Buick etc).
China’s economic reforms are now three decades in the making. Japan and South Korea took 30 years to reach the economy driven by innovation, consumer spending, and services.
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