ASSIGNMENT 1
CHINA
China Outperforming Peers – Policies enabling
exceptional growth
Group A
Submitted at:
FH Joanneum
Business in Emerging Markets
(Master)
Submitted by:
Naiime OLIAEE
Maksim SEMENOV
Melanie SKOLA
Jia Yun TEO
Patricia VILCANQUI
Supervisor:
Dr. Vito BOBEK
Table of Contents
1
Introduction ............................................................................................................ 2
2
Long-term Track Record of China .......................................................................... 2
2.1 Opening of the Chinese Economy ...................................................................... 2
2.2 Introduction of Economic Reforms ...................................................................... 2
2.3 Take a long view of EM, looking back at their real performance over decades and
looking forward to where they could be in 2030. ....................................................... 4
2.3.1 Macroeconomic indicator ................................................................................. 4
2.3.2 Yuan ................................................................................................................ 5
2.3.3 Economic model .............................................................................................. 6
3
4
Policies that shaped China’s present business situation......................................... 7
3.1
Agricultural policies ........................................................................................ 7
3.2
Industrial policies............................................................................................ 9
3.3
Trade policies ................................................................................................12
SWOT of the identified policies in China............................................................... 16
4.1
Strengths.......................................................................................................16
4.2
Weaknesses .................................................................................................17
4.3
Opportunities & Threats ................................................................................18
5
Impact of the policies in different aspects of China’s economy ............................. 19
6
Conclusion ........................................................................................................... 23
7
Lessons Learnt..................................................................................................... 24
Bibliography ................................................................................................................ 25
-1-
1 Introduction
China will be used as the emerging market to analyze for this module over four
assignments. Prior to the initiation of economic reforms and trade liberalization nearly 40
years ago, China maintained policies that kept the economy very poor, stagnant, centrally controlled, vastly inefficient, and relatively isolated from the global economy. (Congressional Research Service, 2019). Over the past decades, the Chinese economy has
seen explosive transitions and growth, and as a result they are outperforming many of
their peers in terms of economic growth. Today, China is considered an upper middleincome country and the world’s second largest economy (The World Bank, 2019). In this
report, some of the factors that contributes to the growth of the nation will be examined.
2 Long-term Track Record of China
2.1 Opening of the Chinese Economy
Prior to Deng Xiaoping’s rise to power, the Chinese economy was almost in isolation. A huge portion of the economic output was governed and controlled by the state,
in which the production goals, controlled prices, and allocated resources were set (Morrison, 2019). Deng’s initiation of the economic reforms and trade liberalization opened
the Chinese economy in 1978. He was the pragmatic and disciplined driving force that
steered China towards the reform of its economy through the shift of focus from political
movements to economic developments.
2.2 Introduction of Economic Reforms
China first introduced the household responsibility system (HRS) in 1978. The
HRS is a system that abandoned collective brigade production structure and took up
collective contracting of owned land to households. In the early 1980s, it started to
spread nationwide and superseded the people’s commune system that had existed for
a quarter-century. This was the first break from the nation’s planned economy (Cai et al,
2019). With the adoption of HRS, the Chinese agricultural sector has observed a significant growth.
Commencement of the shift from central planning started with main market exchanges, and at the same time with establishment of international trade and investments.
The central government created ‘special export zones’, also known as ‘special economic
zones’, in certain parts of China to encourage foreign investments, exports and imports
of goods, and this was an indication of China opening up to the external world. The
2
Chinese government also introduced price and ownership incentives for the farmers, in
which allowing them to trade some of their crops in the free market. Additional reforms
were introduced in several stages, all of which sought to decentralize economic policymaking in many sectors, especially in trade.
With the free market reforms, tax and trade incentives were offered to attract foreign direct investments (FDI) in China. The state price controls on many products were
steadily eradicated. Trade liberalization played a big role in China’s economic success.
The removal of trade barriers aided competition and attracted even more inflows from
the FDIs. Figure 1 depicts China’s GDP from 1970 to 2018, and it shows a trend of their
GDP rising steadily ever since the introduction of the economic reforms.
Figure 1: China’s GDP (in current US$) from 1970-2018 (The World Bank, n.d.)
Since the market reforms and implementation of its economic reforms in late
1970s, China has lifted more than 700million of their citizens out of absolute poverty
(Wang, 2019). This can be observed in figure 2, where the trend shows a significant
amount of reduction in the population living in poverty as well as a decline in the poverty
rate of the Chinese population.
3
Figure 2: China’s poverty population (in hundred million) from 1978-2018 (State Council
Information Office, 2016)
2.3 Take a long view of EM, looking back at their
real performance over decades and looking forward to where they could be in 2030.
2.3.1 Macroeconomic indicator
In less than 20 years, China will become the world's first economy, leaving behind
the United States. Despite the slowdown in economic growth, China will be able to provide an enough level of economic growth to ensure that the incomes of most of its citizens are considered enough to classify them as middle class. PricewaterhouseCoopers
projected that USA will move to the second position after China by 2027 if we measure
GDP by nominal value.
4
Figure 3. Projected GDP growth paths of China and US
Japan also calculated the share of world GDP in the period we are interested in.
So, according to the latest report of the Japanese government, in 2030, China will become the world's largest economy and its share in world GDP will be 23.9%, the US will
fall to 2nd place (17%), Japan will become the third (5.8%), and India – the fourth (4%).
The Royal Bank of Canada's report "The impact of the world on China" predicts
that by 2030, China will become one of the high-income countries, and by 2025, China's
wealth will increase by 4 times.
In the fall of 2011, the United Nations population Department and Goldman Sachs
published a joint report that estimated that China's middle class will reach 1.4 billion
people by 2030. The report notes that " according to the world Bank's middle-class classification criteria, the entire population of China will be classified as middle class in the
next 20 years."
2.3.2 Yuan
The Chinese national currency will become international in the early 2030s, although not global. With a high probability, entering the number of world reserve currencies, the yuan is unlikely to be able to take away the palm from the dollar.
The fact that China will take the first place in the list of the world's largest economies, however, does not guarantee the same success of its national currency. Nevertheless, it is obvious that in 20 years, under favorable conditions, the internationalization
of the Chinese currency will still take place.
5
In any case, the prospects are quite good, because the scale of the spread of the
yuan is already large and in the early 2030s it will clearly be much larger. Only stability
and liquidity are in question, but this is a question of changing the domestic monetary
policy of the Chinese leadership
Figure 4. Dynamics of GDP growth per capita
2.3.3 Economic model
If Beijing does decide to carry out a complex reform of the country's economic
system, then in 20 years China will become a harmoniously developing country with a
well-functioning economy and a rich population.
Not only competent experts, but also the country's leaders themselves say that
the current model of development of the Chinese economy is outdated. The current
scheme, based on continuous reforms, cheap labor, and a steady flow of foreign investment and export profit, is working worse. This is due to a drop in demand in the global
market.
According to the Bloomberg Agency, at the end of 2012, 24 Chinese companies
with a total value of $1.74 trillion are on the list of the worlds' 500 largest companies by
capitalization. The indicator is not very good both in terms of comparison with the United
States (170 companies with a total value of $10.6 trillion), and in terms of comparison
with the Chinese indicator in 2009 (34 companies and $2.19 trillion, respectively).
Chinese companies have a more serious representation in the Fortune Global 500
list and where in 2012 there are 73 Chinese companies (2nd place in the ranking), three
of which are in the top ten. Although Sinopec, China's CNPC, and China's State grid
Corporation occupy these places from 5th to 7th, respectively, it is noteworthy that the
6
Industrial and commercial Bank of China ranked third in terms of profitability with revenue
of $41.6 billion, behind Gazprom and Exxon. Another promising factor is that the Chinese
occupy six positions in the top ten corporate employers in the world and here, in addition
to oil companies, are already represented by the China post group, China telecommunications and aviation industry corporations from China.
Chinese analysts believe that, despite the current downturn, the prospects for Chinese companies in the top League are the rosiest. Justin Lin, former chief economist and
senior Vice President of the world Bank, is confident that by 2030, the number of Chinese
companies in the global 500 will increase to 150, and the share of "in the team standings"
will be at least a third.
3 Policies that shaped China’s present business
situation
To understand the business situation of China in recent times, it is important to recall
the economic reforms that started in 1978 during the rule of Deng Xiaoping and their
evolution from that year until now. Also, it is important to consider recent policies
implemented for China’s actual government leaded by Xi Jinping due to the potential
changes that they would develop in the future1.
The case of China is especially interesting because it is a country that, in economic
terms, has consistently performed outstanding for decades but, it is not yet a developed
country like other western countries. Therefore, in the following lines we explain some
Chinese policies that had have an impact on the country’s productivity and on the
business environment.
3.1 Agricultural policies
Before 1978, the Hukou System was a tool for controlling social and geographic
population distribution in China, by which farmers could not aim to have same rights and
benefits as urban residents2. This system along with the community ownership of
farms were the former agricultural policies established by the socialist government
leaded by the communist party and their leader Mao Zedong.
1
Wikipedia, https://en.wikipedia.org/wiki/Chinese_economic_reform
Zhou, Ping. (2020, February 11). China's Hukou System. Retrieved from https://www.thoughtco.com/chinas-hukousystem-1434424
22
7
After 1978 there were implemented rural reforms by which collective farming
ended in almost all of China, and family farms returned to have a dominant role in
agriculture. However, the land system did not change to a simple private property
system, because according to this new policy, the land is worked by individual
households by the ownership still remains with the “collective”3.
These policies aimed to increase the agricultural output. In fact, available data
suggest that both, labor and land productivity increased since 19784.
Figure 5 The growth performance of agriculture in China
The bald evidence of such numbers highlights the major changes that have taken
place during the last three decades. China today is much less a rural society than it was
in 1978 and agriculture can no longer be regarded as a driver of economic growth.
Concerning the Hukou System, after 1978, country residents were allowed to
get a new type of permit by which, after fulfilling some requirements, farmers were
allowed to move to urban areas. However, the freedom of moving from rural areas to
urban areas was not an easy procedure until 2001, when China joined the World Trade
Organization and this fact led the increase of demand of labour force in urban areas5.
The impact of these policies had transformed the composition of the rural and
urban population in China as we can see in the next Figure, which shows that from 2001,
the rural population keeps decreasing while the urban population increases constantly.
3
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
4 https://rauli.cbs.dk/index.php/cjas/article/download/2861/3065/0
5 https://www.thoughtco.com/chinas-hukou-system-1434424
8
Figure 6. Urban and rural population in China
3.2 Industrial policies
From 1978 and the next years were introduced a branch of reforms in Chinese
economy that have an impact on China’s industry nowadays:
3.2.1 The dual – track system
This is a Chinese policy introduced from 1984 by the government, which allows the
government the control over some sectors of the economy, including the industry sector.
However, the government allows the private sector to invest in some sectors6.
This system implied a two-tier price system as well for most of goods. For example,
a commodity had both, state-set planned price (typically lower price) and a market price
(typically higher price). At this point, we must clarify that the dual-track system meant to
state the coexistence of two coordination mechanism (plan and market) and not the
coexistence of two ownership systems7.
After 1984, the dual-track pricing system was adopted as a planned policy for the
transition to a market system, in which the state operates in industrial economy at large
6
http://press-files.anu.edu.au/downloads/press/n4267/pdf/ch12.pdf
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
7
9
scale. This meant that state-owned factories were introduced to the market and began
the process of adaptation to market processes8.
The dual-track system allowed state firms to transact and cooperate with nonstate
firms, allowing valuable flexibility. However, the commitment of the reformers was to
introduce a gradual process in which the state intervention would become less and less
important until the economy grew out of the plan. This objective was achieved during the
first years of the decade of 1990’s.
Figure 7. Steel production and planned allocation
As we can see in the previous Figure, when the sale of some goods such as the steel
started to grow, the planned government allocation starts to deeply decline, which shows
how the economy grown out of the plan9.
3.2.2 Privatization policy
The Chinese government avoids the term “privatization”. However, in the practice,
often these operations were made through management buyouts in the State- Owned
Enterprises after 1995, and in consequence, private businesses have been adopted
more recognition and legitimacy.
8
http://press-files.anu.edu.au/downloads/press/n4267/pdf/ch12.pdf
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
9
10
In fact, this policy made possible the rise of private businesses at the level of
becoming a player in the Chinese economy. By the end of 2004, according to Barry
Naughton, the urban private sector, without counting foreign-invested firms, employed
about twice as many workers as the traditional state sector: 55 million, compared with
less than 30 million in SOEs10.
Figure 8. Workers of SOE and privatized firms in china
According to L. Huang and Y. Yao11, the number of workers on duty of privatized firms
are even more than the half of the number of workers on duty of pure State-Owned
Enterprises. The next figure shows this
On the next Figure we can see the share of profits by enterprise type, this picture
shows the instability of state-owned enterprises compared to private or foreign investors.
This meant a fact situation that not only fostered to follow the track of the privatization
but also to continue the reforms in other aspects of Chinese economy.
10
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
11 https://www.tandfonline.com/doi/pdf/10.1080/14765281003750199?needAccess=true
11
Figure 9 Share of industrial profits by enterprise type
3.3 Trade policies
3.3.1 Regulatory and Administrative Restructuring policies
By the 1990’s, when Chinese economy had grown more than expected, the
government started a regulatory reform aiming to introduce competition as a force for
economic change and less direct government action in the productive enterprises. The
main reforms were related to fiscal system, new foreign trade system and a new
company law. These reforms were introduced on January 1, 199412.
The commitment to this new direction was strongly signaled early on, when three
crucial measures—a new fiscal system, a new foreign trade system, and the new
Company Law—were made effective on January 1, 1994.
A) Fiscal and Tax System
This reform started in 1994 and it aimed to stop lower fiscal revenues, but also
to expand the tax base applied uniformly to all economic actors. This reform
included putting central-local government fiscal relation on a sounder and more
stable basis.
B) Banking and Financial System
The People’s Bank of China (PBC) set up nine regional branches along the lines
of the U.S. Federal Reserve Board and conducted, determined and implemented
12
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
12
the monetary policy of the country. This administrative restructuring took place
within the adoption of macroeconomic austerity. Later, state-owned commercial
banks faced a hard budget constraint, as their access to easy government
money was shortened. In turn, they began to pass tougher standards on to their
clients in state-owned enterprises13.
As a result of this reform, in 1999 were created four asset management
corporations to take control of some non-performing loans of the four big state
commercial banks and begin the liquidation of them. These steps were
fundamental to achieve a stable banking system14.
C) Corporate Governance
Refers to the reform introduced with the Company Law, which contained for all
state-owned enterprises a gradual reorganization as limited-liability corporations
with clear corporate governance institutions. This law have slowly transformed
the organizational structure of the Chinese public sector.
D) Membership in the WTO
In 2001, China acceded to the WTO which meant a fundamental step in the
degree of openness of the Chinese economy to the world. Since then, this
country is a major export and import power15. However, this accession required
an extraordinary Chinese acceptance of a broad range of regulations made to
allow China to match with international standards.
After 1978 China step by step embraced openness to market policies, and the
accession to the WTO is a milestone in this long process. In the next Figure the
dramatic change of Chinese economy is remarkable.
13
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
14 Ibidem
15 https://seekingalpha.com/article/3850676-what-chinese-rebalancing-mean-for-trade
13
Figure 10. China’s share in world trade surged after 2001
3.3.2 Special Economic Zones
In consistency with the openness to the market policy, from 1979 to 1980, were
created four Special Economic Zones (SEZs) in order to attract investors to China. Each
SEZ strategically targeted a particular group of maritime Chinese as mainly source of
investment16.
By 1992, 60 SEZs were set up in China, including the initial 4, in 15 coastal port
cities, 8 river port cities, 19 inland cities, and 13 border cities. Then, this process was
widely adopted, specially through the coastal provinces and many jurisdictions started to
develop their own development zones. By 2005, there were 210 national developed
zones and 1346 provincial development zones. Therefore, the production of China is
strongly coordinated by its proximity to coastal areas and the capacity to access global
markets through port and airport modes17.
16
https://valeriaribeiroufabc.files.wordpress.com/2017/07/barry-naughton-the-chinese-economytransitions-and-growth.pdf
17 https://transportgeography.org/?page_id=4103
14
Figure 11. China’s Special Economic Zones
Finally, as a brief summary about the most remarkable policies applied by China
from 1978 to the present, the configuration of the actual GDP shows graphically the real
impact in Chinese economy.
15
Figure 12. China's GDP composition, demand side, 1978 - 2011
4 SWOT of the identified policies in China
In this chapter, the existing policies discussed in class and the ones previously described in the paper are assessed with regards to their strengths and weaknesses. This
assessment is done in the form of a SWOT-Analysis.
4.1 Strengths
China is the second strongest economy globally and expected to be the strongest
economy in the future. Chinas middle class has grown a lot in the past and therefore the
disposable income grew as well.
A strength of China are the policies and programs that have been implemented.
For example, promoting investments and exports and initiatives to strengthen financial
institutions and boosting welfare programs. Other strengths are the built-up bureaucratic
capabilities and the simplified and improved tax administration.
To outperform peers, building a better bureaucracy is crucial. To achieve that
China has developed a special training for officials, in which they learn a holistic view in
different functions, before they take high positions in the government.
16
However, China does also have a strength in the process of agile experimentation, which is an important skill in the volatile and complex times we have. The process
of agile experimentation was used by the Chinese government to identify successful policies, which were tried and tested on a local level and then adopted on a national level.
Even though it is not possible to fully predict the future effects of programs, this process
of agile experimentation can help to identify the best policies.
4.2 Weaknesses
In general outperforming developing economies show improvements in government effectiveness, regulatory quality, and rule of law. However, as has been presented
in class by Mr. Bobek, it can be seen in the graphic below that in comparison to other
long-term outperformers, China is not doing as well in terms of governance indicators.
Figure 13. World Bank Worldwide Governance Indicators 2017
As can be seen in the figure, even though China shows improvements in government effectiveness and the rule of law, they are not doing as well as the other long-term
outperformers in all three areas (government effectiveness, regulatory quality and the
rule of law) in total.
17
4.3 Opportunities & Threats
China is involved in a trade war with the US, which is the strongest economy
globally, which is one threat for the Chinese economy. This might also be one out of
many factors which contributed to the slowing down of growth in economy. However, it
cannot yet be predicted how this will develop in the future.
In general, for China to achieve a sustained, high GDP per capita growth there
needs to be an increased productivity, a strong and inclusive income growth and a higher
demand for production.
Especially a high level of productivity is important. Because even though China
has a high quantity of labor, the only way to be an outperformer compared to peers in
the future is to use that labor very productively. This could be achieved, for example
through improved technology and processes or better infrastructure.
In the chapter about the long view of China and where they could be in 2030, one
topic discussed was the economic model. For potential future opportunities or threats
the reform of the economic model is important. China has the opportunity to become a
developing country with a well-functioning economy and a wealthy population. But if
there is no reform that could be a threat, because the current economic of China is becoming obsolete, as was described in prior chapters.
Another opportunity or threat could be the Chinese currency. It is not clear how
successful the currency Yuan or Renminbi (RMB) will be internationally. However, as
mentioned in previous chapters, the prospect for the Renminbi gaining importance internationally is good. But it is not clear whether stability and liquidity could be a threat,
because it is dependent on the monetary policy of the Chinese government.
As opportunities and threats often can be two sides of the same coin, for China
to keep outperforming peers in the future there are (as learned in class) three important
aspects. First of all, good macro policies (aimed at supporting capital accumulation, income growth, and economic stability) are important. As well as competition policies supporting productivity growth and an improved public sector.
Very important for handling threats is an ability to manage stability in sometimes
volatile global economic conditions.
18
5 Impact of the policies in different aspects of
China’s economy
Between 1978 and 2015, China moved from a poor, underdeveloped country to the
world’s leading emerging economy. Despite the decline in its share of world population,
China’s share of world GDP increased from less than 3% in 1978 to about 20% by 2015
(Figure 14). According to official statistics, real national income per adult grew more than
eightfold between 1978 and 2015. While the average national income per adult was approximately €120 per month in 1978 (expressed in 2015 euros), it exceeded €1,000 per
month in 2015 (Figure 15).
19
Figure 15. The rise of per adult real national income in China, 1978-2015
Economists generally attribute much of China’s rapid economic growth to two
main factors: large-scale capital investment (financed by large domestic savings and
foreign investment) and rapid productivity growth. These two factors appear to have gone
together hand in hand.
Economic reforms led to higher efficiency in the economy, which boosted output
and increased resources for additional investment in the economy.
China has historically maintained a high rate of savings. When reforms were initiated in 1979, domestic savings as a percentage of GDP stood at 32%. However, most
Chinese savings during this period were generated by the profits of SOEs, which were
used by the central government for domestic investment. Economic reforms, which included the decentralization of economic production, led to substantial growth in Chinese
household savings as well as corporate savings. As a result, China’s gross savings as a
percentage of GDP is the highest among major economies. The large level of domestic
savings has enabled China to support a high level of investment. In fact, China’s gross
domestic savings levels far exceed its domestic investment levels, which have made
China a large net global lender.
Several economists have concluded that productivity gains (i.e., increases in efficiency) have been another major factor in China’s rapid economic growth. The improve-
20
ments to productivity were caused largely by a reallocation of resources to more productive uses, especially in sectors that were formerly heavily controlled by the central government, such as agriculture, trade, and services. For example, agricultural reforms
boosted production, freeing workers to pursue employment in the more productive manufacturing sector. China’s decentralization of the economy led to the rise of non-state
enterprises (such as private firms), which tended to pursue more productive activities
than the centrally controlled SOEs and were more market-oriented and more efficient.
Additionally, a greater share of the economy (mainly the export sector) was exposed to
competitive forces. Local and provincial governments were allowed to establish and operate various enterprises without interference from the government. In addition, FDI in
China brought with it new technology and processes that boosted efficiency (China’s
Economic Rise).
Figure 16. Employment share, GDP share and Total factor productivity growth by sector
The recently completed 11th Five-year plan stated that China would build competitive advantage based on science, technology, and innovation, and this is a prominent
objective of the 12th Plan. In early 2006, the government announced its National Program Outline for Medium- and Long-Term Development of Science and Technology
(2006–2020). Its key pillars include indigenous innovation”, “a leap-forward in key areas,”
“sustainable development”, and “setting the stage for the future.” The strategy calls for
21
increasing R&D in priority areas including ICT, biotechnology, nano-sciences and nanotechnologies, materials, energy, and others; it seeks to encourage enterprise-led innovation; to strengthen intellectual property protection; create a favorable environment for
S&T innovation; attract S&T talents; and improve the management and coordination of
S&T. During the 11th Plan period, the central government’s outlay on science and technology rose by 22 percent per year. By 2010, R&D accounted for 1.75 percent of GDP
and it is projected to reach 1.85 percent by end 2011. Innovation and technology development are assigned a central role in the 12th FYP (2011– 2015), with the highest priority
given to:
•
Strategic industries (energy-saving and environmental protection, next genera-
tion information technology, biotechnology, high-end manufacturing, new energy, new
materials and clean-energy vehicles). A number of mega-projects with a focus on basic
research are earmarked for a large injection of resources starting in 2011. Two that have
been singled out are in the life sciences—on drug discovery and on major infectious
diseases—reflecting the view that research on biopharmaceuticals and stem cells might
lead to profitable innovations.
•
Promoting enterprise-led innovation.
•
Strengthening supporting services.
•
Raising expenditure on research and development to 2.2% percent of GDP.
•
Increasing rates of patenting to 3.3 per 10,000 people. (World bank, Supporting
Report 2 China’s Growth through Technological Convergence and Innovation)
22
Figure 17. WIPO patent cooperation treaty, share of international patents by sector, 2007-2009
6 Conclusion
In summary, the conclusion can be found below.

The Chinese economy was almost in complete isolation prior to the market and economic reforms. With its economy open and the introduction of economic reforms, it
has lifted many of their citizens out of extreme poverty. The path of industrialization
has aided many of the Chinese population with the provision of jobs and chances at
having a better quality of life.

Chinese reforms were intended all to open their economy to the market and make
their industry competitive. The results of these policies are in many ways remarkable
from its results. However, we must take into consideration that the property rights
as well as the migration policies still are not as the conception in western countries.

The Chinese government has made innovation a top priority in its economic planning
through a number of high-profile initiatives, such as “Made in China 2025,” a plan
23
announced in 2015 to upgrade and modernize China’s manufacturing in 10 key sectors through extensive government assistance in order to make China a major global
player in these sectors. However, such measures have increasingly raised concerns
that China intends to use industrial policies to decrease the country’s reliance on
foreign technology (including by locking out foreign firms in China) and eventually
dominate global markets.

Considering China's economy by 2030 can be concluded that despite a slight slowdown at present, China will make the leap between 2027 and 2030 that will probably
give you a chance to become an advanced economic system in the world overtaking
the U.S., Japan, and Russia. The yuan will become one of the most important currencies in the world but not the main one. And only because of the outdated economic model, China cannot develop at the pace that allowed it to become a leading
country in the near future.
7 Lessons Learnt

It was challenging to provide data with a consistent range of years.

There are a lot of information available regarding China and we must analyze
and cross-reference them with the other sources available.

There are abundant Chinese policies available.

It is difficult to give accurate forecasts of economic development based on the
indicators of previous years

We can't rely on a single source of information to build an accurate analysis

We could identify 2 important steps concerning the evolution of China’s development as an outperformer country. First, after 1978, under the rule of Deng Xiaoping and after 2001, when China joined the WTO.

It does not matter the colour of the cat while it catches mice. Deng Xiaoping
24
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