China as the Second Largest Economic Country in the World

As a country with the most population in the world, with a population exceeding 1,363 billion people (estimated in 2014), the majority are Chinese. China has the largest population in the world at around 1.35 billion people with an area of 9.69 million square kilometers and making it the 4th largest country in the world. It is estimated that in 2014 it will become the most populous country in the world.

China as the country with the second largest economy in the world has the largest and most complex economy. Since the introduction of economic reforms in 1978, China has become the fastest growing economy in the world. As of 2013, China was also a member of various other organizations such as the WTO, APEC, BRICS, Shanghai Cooperation Organization, BCIM, and G-20. China is a big power in Asia, and a potential superpower according to some observers.

Development Of China’s Economy

China is the country with the world’s second-largest economy according to nominal GDP (as of 2013) with a total of US $ 9,469 trillion according to the International Monetary Fund. According to the calculation of the balance of shopping ability (PPP), China’s economy is also in second place, with a value of US $ 16.149 trillion. In 2013, the GDP per capita was the US $ 11,868, while the GDP per capita was the US $ 6,959. In this case, China in the order of 90 out of 183 countries in the ranking of GDP per capita.

The Chinese economy as a socialist economy makes it the main economy that is the fastest growing in the world, with an average growth rate of 10% for 30 years. There are 31 administrative divisions in China. Below is the top administrative division according to the GDP ranking in 2012. GDP is diverted from CNY to USD using an FX rating of 6.3125 CNY / USD.

From January 1, 2002, China has become a member of the World Trade Organization. In the new system, the Chinese Government emphasizes increasing personal income and introducing new management systems to increase productivity. The government also focuses on foreign trade as the main foundation for economic growth. The government established more than 2000 Special Economic Zones (SEZs) in which investment laws were stretched to attract foreign capital.

The result was a doubling of GDP from 1978. In the year of 1999, with a number of population that reach to 1.25 billion people and GDP of only $ 3,800 per capita, China has amazingly become the world’s sixth largest economy in terms of exchange rates and the third largest in this world after the European Union and the United States were purchasing power. The average annual income of Chinese workers is $ 1,300. China’s economic development is one of the fastest in the world, around 7-8% per year. This makes China the world’s main focus today with almost all countries.

Economic Development Strategy

In its development slowly the country’s economic development has shifted from a guided economy to a mixed economy that is heading towards a free economic system. In an official document issued recently, the government outlined a democratic state administration. Economic development in China through four stages, namely:

  1. Since late 1978, the Chinese leadership has renewed the economic system from the Soviet planned economy to a market-oriented economy but still within the rigid political framework of the Communist Party.
  2. The big leap in which China left the Soviet Union’s planned economic model and changed from a guided economy to a mixed economy.
  3. The cultural revolution, where the socialist market economy is in the presence of state control at the macroeconomic level, and centralized structuralize policies. Produce efficiency by maximizing profits, selective involvement in the economy, and fast and more stable economic growth.
  4. China’s growth in the current era shifted from an open economy to a market orientation.

Socialist Market Economy

is the economic system used by China (People’s Republic of China). This system is based on the dominance of the state-owned sector and open market reform. This system originated from China’s economic reforms introduced under Deng Xiaoping’s government. The reason for his ideology was that China was in the main stage of socialism as an initial stage in the style of socialist production.

Therefore it is adapted to capitalist techniques in order to develop. However, this system is widely criticized as a form of state capitalism. In terms of exports and imports, China is included in the list of the largest export-import countries. In fact, it is estimated that China’s economic power will defeat American power with China’s revenues reaching $ 8382.