Apart from the existing Cold war with China, India has to look in its own way to learn a lot from it. And yes, it is indeed the right period to do so. In the economical break down, the Americans and the Europeans are struggling to make their existence worthy in the global market, but it is a different scene in China.
(This essay is inspired by reading continuously about China in many editorials & magazines)
A long way back in 1970, China had its worst economy ever, it was very much low when compared to the other developing countries. But no one ever thought that they would reach 2nd position in Global economy and 1st position in overall trade.
In 1970’s they did not concern to privatise every business within the country but they concentrated where they have to – ‘the weaker section’. Formation of SEZ’s (Special Economic Zones) throughout the country made them adherent to the interest of FDI (Foreign Direct Investments). Linda Yueh, a researcher did an alluring work on the China and published a book and rest will deal about her book only.
To brief her research, China’s economic development was divided into three categories such as rural reforms, urban reforms and opening to global economy.
As Gandhi said that the development must start from the bottom to make its root strong, China concentrated on agricultural reforms straight away to help their farmers in early 70’s. They were backed by the support from local government & central government in a very well acclaimed manner, so that they went to 15% of total National Income by 1984. The reason behind it was the development of households. Government took certain amount of cultivation and gave back the rest to farmers. They used them to develop wealth which was then used to run many small scale businesses such as toy making etc., This major breakdown helped them to form TVE’s (Township & Village Enterprises) which in turn developed to a position of contributing one third of the total industrial output in China. The numbers involved were very huge and they had the potential to overcome economic abases.
To start with the fact, it is anticipated, that China will have more cities in the near future than any other country in this world. It means urban reforms have a strong impact from a very long time.
Decentralisation policy was adopted to make China an adept in urban revolution. Every state was allocated a certain budget to be spent on state owned enterprises. Thereby giving them immense confidence & backing to operate, sometimes, even as an independent body. They were allowed to take loans directly from banks & other financial institutions around the world. It had its chances when WTO included China under its belt and hence even Global Bank even become accessible.
This also helped china to make their entry into global market. In 1978, open –door policy of china enabled the foreign investment & the facilities offered in SEZ become more fascinating for the foreign player to drive with. In this they carefully adopted a principle of testing their strategy in one area and evaluating its success before making the policy nationwide.
The masterpiece of their economic plan to encourage export was to decrease the rate of imports (mainly the products needed to manufacture exports) and hence made a profound profit out of it. 16.9% growth in their overall trade was a remarkable achievement and hence they march on to reach the no.1 position in economy.
No comments:
Post a Comment