Economic Development Level

The current rise in the Chinese GDP and national income has encouraged the domestic demand,

which has also promoted the growth of tourism industry. Furthermore, farming friendly policy

promotes most Chinese people to go out of China. Thus, this will make the policy to stimulate

the economic development of the country. In the recent years, the average annual GDP growth

increased to 7%, and it created more jobs of about 450 million (Gerald & Pak & Lai-Ha, 2012).

This has enhanced the economic growth quality and efficiency.

Economic System

The most fundamental motivation for China's rapid economic development is the rapid reform

and the opening policy. This reform has got three turning points. Firstly, the socialist market

economy system is changed from the previously planned command economy. Secondly, China

has transferred to the wide opened community from the previous closed and semi-closed society.

Thirdly, the living standards of the people are enhanced. The economic system of China tried to

introduce a mechanism of the little market in the planned system and the implementation of the

household contract responsibility system in the rural areas and transformed the state-owned

enterprise in the city (Sean & Sara, 2012). From the world’s economic crisis, it is a fundamental

principle to stimulate economic growth in expanding domestic demand.

The current economic situation

The downward trend economic growth is the current main economic situation in China. The

growing rate of retail sales of social consumer goods and consumer confidence index is in a slow

decline of foreign trade in recent months. The exports and the imports growth remain at low
levels. Decreasing the external demand and the economic growth important constraints are the

important constraints for the economic growth. Basing the above statement, Chinese

government insists on the implementation of a proactive fiscal policy and a prudent monetary

policy, improving macro-control policies and strengthening them, and then keeping the rapid and

stable economic development (Daron & James, 2012).