China: Successes and Failures Essay Plan

This is an essay plan on the title "Have the successes of the Chinese economy outweighed the failures in recent years?"

China - Successes and Failures

Critical evaluation

How to assess the degree of success and failure?

• i) Relative performance of China e.g. to other fast-growing emerging economies
• ii) Performance relative to targets set out in successive five-year plans
• iii) Successes in aggregate measures such as growth / per capita incomes v regional / sectoral / industrial, urban/rural
• iv) Long term v short/medium term perspective e.g. broad sweep of progress post 1978 / Chinese economy post 2007

Always look to disaggregate when you can e.g. strong HDI improvement but China’s HDI ranking still lagging GNI per capita ranking

Recognition that China remains in transition - how well placed is she to avoid a middle-income trap? Can she move from a low to higher value producer?

Can China successfully transition to a higher quality of growth - more balanced, inclusive and sustainable?

Challenges and opportunities from China reaching the Lewis Turning Point

Economic reform is frequently is a two steps forward, one step back process - is China any different?

Suggested areas to look at:

• Progress in sustaining growth / per capita incomes / reducing extreme poverty
• China the 1st country to meet the MDG of halving rural poverty
• Income and wealth inequality - a long term rise but hints of starting to move down the Kuznets curve?
• External trade performance / reforms to China’s currency policy (nudging towards floating the Yuan wishful convertability)
• Share of world output / investment (inward and outwards)
• Rise of Chinese MNCs / relative under-performance of SOEs
• Slow pace of innovation in many sectors - perhaps the result of a fear of failure?
• Demographic problems - failures of one-child policy - China needs to increase the base of population and tackle population ageing
• The looming debt crisis - will China suffer from debt deflation following a financial crisis?
• Pollution crisis and policy responses (threats and opportunities)
• Possible institutional failings - corruption, under-developed financial markets
• Global economic tensions - protectionist sentiment v grand designs for New Silk Road, AIIB, BRICS development bank
• Aid/financial assistance from China to more than 120 countries including many in Sub Saharan Africa
• Excessive capital investment - evidence of diminishing returns to capital, mal-investment, structural excess capacity e.g. in steel and housing

Success/failure overview

China needs to find the right balance between development and distribution, between markets and efficiency