Topic 1 essays - economics

increased volatility

• GFC - China’s GDP growth fell from 14% in 2007 to 9% in 2009 → prompted a $580bn stimulus package

• Trade war - GDP slowed from 6.7% in 2018 to 6% in 2019 (lowest in nearly 3 decades)

growing income inequality

• China’s gini coefficient increased from 0.38 in 1985 to 0.46 in 2019 → shows an increase in inequality due to globalisation

environmental impacts

• heavy reliance on manufacturing exports has made it responsible for around 30% of global co2 emissions

• china is now the world’s largest producer of renewable energy, including over 1/3 of the world’s solar power and 1/3 of wind capacity

growth - ag reforms

• led to a signficant rise in food production, with increase incomes invested into private enterpises = signficant rise in crop output, by 48% from 1978 to 1987

• ag output increased by 8% per year and food prices decreased by almost 50%, leading to a real GDP increase by 42%

growth - open door policy

• 400k (1980) to 6 million (2024) → manufacturing enterprises

• this policy led to an average GDP growth of over 9% annually

growth - trade liberalisation

• average tariff levels decreased from 55% in 1980 to 12% in 2002

• trade increased from 8% of GDP in 1973 to 64% of GDP in 2006

• stats from the WTO show that China’s merchandise exprots reached $3.3 trillion in 2021 → clear manifestation of globalisation

• CHAFTA - the value of two goods increased by 66%

capital controls

• regulation and government intervention → tightly regulate how much money flows in and out 

• encourages FDI rather than portfolio investment → want to reduce volatility and want the money to be used productively rather than just investors making money

• one of the largest recipients of FDI in the world → however, weak investor confidence has reduced FDI flows and therefore relaxation of these controls (lowest levels since 1988)

development - compulsory education