Challenges Facing the People’s Republic of China
Edited by Juhzon Zhuang, Paul Vandenberg and Yiping Huang
Chapter 4: From economic miracle to normal development
When the People’s Republic of China (PRC) began economic reforms in 1978, its gross domestic product (GDP) per capita was only $152; by 2012, it had reached an estimated $6076, according to the International Monetary Fund (IMF). Although ranking only 87 out of the 182 economies (in per capita terms) in the IMF dataset, the PRC’s economy is already the world’s second largest, overtaking Japan in 2010. Some experts have even proposed the notion of ‘Group-of-Two’ consisting of the United States and the PRC as the global economic power (Bergsten et al. 2008; Zoellick and Lin 2009). Having successfully engineered a remarkable economic take-off and gained upper middle-income status, the PRC now faces the challenge of sustaining rapid growth and avoiding a middle-income trap. World Bank economists coined this term to describe the experiences of the many developing countries that achieved rapid income growth until they reached middle-income levels, but then had trouble moving to a higher income level. The PRC now faces this challenge as the low-cost advantages that aided its rise diminish. In October 2009, the PRC celebrated its sixtieth anniversary. Economic policies during those years can be summarized by two economic experiments: in the first 30 years after 1949, the government abolished free markets and adopted a central planning system; in the next 30, from 1979, it reintroduced them. Despite initial success, the first policy experiment failed. By the mid-1970s, the economy was on the verge of collapse.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.