ciesRecent Chinese economic policies have shot the country into the worldeconomy at full speed. As testimony of this, China’s gross domestic product hasrisen to seventh in the world, and its economy is growing at over nine percentper year (econ-gen 1). Starting in 1979, the Chinese have implemented numerouseconomic and political tactics to open the Chinese marketplace to the rest ofthe world.
Just a few areas China’s government is addressing are agriculturaltechnology, the medical market, and infrastructures, like telecommunications,transportation and the construction industry. Chinese reform measures evenanticipated the rush of foreign investment by opening newly expanded industriesto out-of-country investors. Effects of this sudden change in economic strategyby a world power can be felt by practically every nation of the globe involvedin international trade. The change in the amount of imports and exports to andfrom China will increase the demand on countless markets, from automobile, topetrochemical, to pharmaceuticals, and optical fiber. Also, with all theforeign investment China is receiving, the socialistic republic will only growmore and more interdependent upon the world economy. However, the impressivegrowth rate of China’s economy is not without its shortcomings.Order now
Problems suchas inflation and inefficient state-owned enterprises plague the rise of theChinese economy. The main goal for China’s modern foreign policies is the development ofthe Chinese infrastructure. The significance of improved communication andtransportation cannot be over-stressed. Economically, enhanced means ofcommunication and transportation allows more expedient supply and demandscheduling. Two of the latest Chinese reform measures to aid in the developmentof the country are the Provisional Regulations on Direction Guide to ForeignInvestment and the Catalogue Guiding Foreign investment in China.
Both thesepolicies place specific industries including telecommunications, machinery, andelectronics on top priority. Funding for these projects come from foreigninvestments and appropriations from the Chinese government in the form of grantfinancing, and legislative or administrative support. Yet another example of the Chinese emphasis on industrial based growthis the far-reaching goal of having just under 100 million telecommunicationlines by the year 2000. China’s Central Ministry of Posts and Communication saidthat in order to complete this major task China will enlist the aid of majoroverseas suppliers and create manufacturing plants within the nation.
AT;T,Motorola, Northern Telecom, Alcatel, Erricsson, NEC, and Siemens are just ahandful of the multinational companies which hold a considerable share of theChinese telecom market, once again proving that China is becoming a party toglobal interdependence. The Chinese pharmaceutical market, much like Chinese industrial markets,is experiencing rapid growth due to reforms in China’s economic strategy. Thenation’s government has decided to lower import tariffs and remove the necessityof an import license to bring pharmaceuticals into the country. Also, patentedforeign drugs, such as Tylenol, are now being protected from counterfeiting byadministrative action.
The result of these provisions are overseas contractualinvestments totaling $1. 5 billion in the past five years, and income from themedical industry’s exports reaching 2. 6 times the amount five years ago,according to Zheng Xiaoyu, director of the State Pharmaceutical Administration(scitech/med 1). The pharmaceutical market’s growth is another example of theeconomic progress China has made. Even after accounting for all the economic benefits recognized by theworld, the Chinese still come out as the country with the most gains.
However,there are more motives behind China’s market reforms than just purely economic. On the political front, China is fast becoming an integral part of internationalorganizations. The Chinese government is making a conscious effort to reenterGATT (the General Agreement on Tariffs and Trade), realizing the importance ofcreating a favorable trading status among foreign nations. Slowing thisprogress, the 124 nation strong trade bloc has requested that numerousconditions must be met by China before the nation can become a member of GATTonce again.
Several of these provisions are the “elimination of importprohibitions, restrictive licensing requirements and other controls orrestrictions; lifting of all restrictions on access to foreign exchange and fullconvertibility of the Chinese currency” (china-tr. 2). Other important keythemes behind China’s Open-Door policies are “economic and technologicalcooperation with the West” (china-tr 1) and that China’s government no longersupports Third World revolution. Instead, China realizes that cooperation withdeveloping countries would be far more practical. Although Chinese foreign policy is aimed at opening the nation’s entireeconomy to the world, it neglects the agricultural market almost entirely, withthe exception of technical contracts.
These contracts are designed to improvethe transfer