Economic Issues Associated with Communist China and their relationship with Africa as a Result. Introduction
The importance of this topic is vast due to the fact that China is one of the fastest growing economies in the world, being part of the BRIC countries which are synonymous with emerging markets and economic growth. According to Chow (2002, p252) “the exponential rate of growth was 9.7%” in the time period of 1978 to 1998 which substantiates that China’s economy is one of the fastest growing when compared with other rates of growth among other countries. China possesses the title of the chief exporter and second highest importer in the world, therefore the success of their economy directly influences the rest of the world. This topic is very important to modern day economists due to the fact that China has become a ‘major player’ and has the ability to one day eclipse the United States of America as the primary leader in the economic field. With that responsibility certain obligations occur such as having ‘clout’ when issues are raised and that China will be potentially seen as a World leader in the mould of the US. When contemplating international economic issues associated with China, It is essential to note that the People’s Republic of China is a single-party state, with governance of the communist party coming as a result of the Chinese civil war. The direct years after the communist party usurping power, China’s economic growth stagnated and faltered due to the leadership of Mao Zedong. It has been referred to as “chaotic” and although stringent rules and regulations where-ever-present in the early years under Mao, they have relaxed since his death in 1976. If his death had a large effect on the economy of China so too did the 1978 reforms that allowed for a freer market place and encouraged growth in rural areas. This has resulted in new urbanised areas, outside of the major cities. With this increase in urbanisation comes the need for materials and, although China possesses many resources they are dwindling in comparison to what they once were. Therefore it has become evident that China must import various necessities and raw materials, originally from Saudi Arabia and since Africa. The links that China has made in Africa have resulted in the production of a ‘bilateral trade route’ whereby both parties are enjoying the benefits of their relationship substantially more than competitor countries. The 1978 reforms where essential to China’s current economic standing and that the communist party allowed for a set of circumstances to arise and in this unique case China was able to prosper regardless of communist rule. This in association with China’s inextricable links with Africa and more specifically the Sub-Saharan Region has allowed for the continued growth throughout the resulting years. Main Body
The theme of communism’s effect on China’s economy can be viewed in a variety of ways, the ‘pre-reform period 1952-1977’ and the ‘reform period 1978-1999.’ A major factor in separating these two ‘periods’ is the death of the communist leader Mao Zedong in 1976. Krugman (1994 p75) stated “it is hardly surprising that a major recovery in economic efficiency occurred as the country emerged from the chaos of Mao Zedong’s later years,” this would indicate that Krugman is suggesting that the communist rule was specifically hindering economic growth by the “chaos” of Mao’s rule. According to Wang and Yudong (2003 p32) there was “negative productivity growth during the pre-reform period 1952-1977” thus corroborating Krugman’s indication. Oi (1995 p1133) also substantiates Krugman’s point in that Oi states “the Maoist system was plagued by economic inefficiency,” thus suggesting the communist party was a hindrance to the growth of China’s economy. However, Oi goes on to say that “this same legacy [Maoist] provided the foundation that allowed post-Mao China to turn in short order into an economic dynamo” therefore,...
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