China's Past vs Current Strategies ('One Belt, One Road' (Two…
China's Past vs Current Strategies
: Setting up SEZ in 1980s. Increase incomes --> increase in export income in AD. Increase in sustainability
: Reforming the resulting 'Dualist economy'. Due to prior strategies (SEZs, Tax policy, FDI inflows). China has created an economy dependent on these zones for growth, employment and higher incomes. Leads to unsustainable inequality between rural and urban workers. Up to 150-200% difference in regional incomes.
13th plan --> "Balancing: bridge the welfare gaps between countryside and cities by distributing and managing resources more efficiently
Current education reforms, linking uni and businesses, to increase productivity and EG by increases years in education (increased ED)
Current 5 year plans specifically identify broad focus/strategies to address these unsustainable imbalances, with western and northern provinces development
Protection reduction and tariff reform (1992), joining WTO in 2001.
China has stepped in to role attempting to be key champion of globalisation. China has recently signed the ChAFTA in 2015 and is promoting the RCEP. RCEP is the rival China led initiative excluding the US which has usurped the TPP as the front runner for free trade deals in the region.
13th Year plan - "Opening up: Deeper participation in supranational power structures, more international co-operation"
'One Child Policy' - improve education and healthcare, issue of less people in the labour pool, increasing ageing population --> impact on future growth
2 Child Policy 2015 - Loosening grip on population control with current strategy. Allow natural economic forces to control family sizes
General growth and building infrastructure - 3 Gorges, high speed trains
12th plan - Co ordinated development with the 'One Belt, One Road' initiative, and overarching regional development strategy
13th plan - "Innovation: Move up in the value chain by abandoning old heavy industry and building up boxes of modern information intensive infrastructure
12th plan - Building new airport in Beijing. Plus making the made in china mark of quality by 2025. More sustainable for exporting, rather than always being the low cost producer
Economic Growth + Development
Growth at all costs
12th and 13th plans currently taking on bard serious issue of enviro damage.
Air pollution in cities (600k premature deaths pa)
Move away from heavy industry over time (shift to high tech to services, services now 50% of GDP)
13th Plan --> "Greening: Develop environmental technology industry, as well as ecological living and ecological culture"
General economic development - 12th plan - building 36 million new affordable apartments for low income people
Banking reforms 1980s-1990s
Financial deregulation for investment reform of capital markets. More individual investors on Hong Kong and Shanghai exchanges. With for households and firms to provide investment funding rather than foreigners or government sector. More sustainable source of investment capital
'One Belt, One Road'
Two ends of Eurasia, as well as Africa and Oceania are being more closely tied along two routes - one overland and one maritime
6 major economic cooperation corridors and several key maritime pivot points across Eurasia. In order to build a smooth, secure, and efficient transport routes connecting areas along the belt and the road
The overland belt involves the creation of an economic and trade corridor extending from China's west through Central Asia and finally to Europe
The belt initiative calls for the integration of the Eurasian land mass into a cohesive economic area
For the maritime 'road', China's development of ports and hubs across the Indo-pacific is a key aspect of the initiative
OBOR provides a global context for China's growing economic links with Australia
Foreign and economic strategy deriving from the silk road initiatives
OBOR emphasises five key areas of cooperation:
Coordinating development policies
Forging infrastructure and facilities networks
Strengthening investment and trade relations
Enhancing financial cooperation
Deepening social and cultural exchanges
China claims that OBOR will 'include 65 countries, 4.4 billion people and about 40% of GDP'. China has reportedly established 75 overseas economic and trade cooperation zones in 35 countries as part of the OBOR initiative.
'Chinese' dream' involving the 'great revival of the Chinese Nation