Chapter 3: China’s Rise and East Asian Economies: Towards a Sino-Centric Regional Grouping?
* John Wong RELENTLESS GROWTH 3.1 The Chinese economy since 1978 has experienced spectacular performance on account of its successful economic reform and open-door policy. Average annual economic growth for the period of 1978–2007 was 9.8 per cent, with many ups and downs in the process. Real growth for 2007 was 11.9 per cent, up from the high rate of 11.2 per cent of 2006. In fact, China has chalked up double-digit rates of growth for five years in a row, averaging at 10.8 per cent a year (2002–2007), since its accession to the World Trade Organization (WTO) in 2001. This is truly phenomenal, especially because such ‘hyper-growth’ took place amidst a low annual inflation rate, below 3 per cent for the whole period – inflation only appearing in the last quarter of 2007. As shown in Figure 3.1, China’s economic growth process in the 1980s (its first decade of reform) fluctuated quite a lot, due to the so-called ‘reform cycles’. Since 1990, the growth process has displayed two spurts of high growth. One was sparked off by Deng Xiaoping’s Nanxun (tour of South China) in early 1992 and the other by China’s accession to the WTO in 2001. The Nanxun effect, as it may be called, signals China’s long march into a market economy by deepening and broadening economic reform, as Deng started a bold move to convert China into the so-called ‘socialist market economy’. The extensive marketization that followed tremendously enhanced the economic efficiency and productivity of China’s...
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