Calvo, Jhoanne C.

BSA 2-1
Group 2 - Case Study 4
Understanding a Development Miracle: China
1. Cite three (3) strategies that China adopted that spur their economic growth and
development.
China’s adopted strategies that spur their economic growth and development are
export-led investment and growth, health and educational investments, as well as
productivity growth. Export-led Investment is the result of two transitions: structural
change and demographic trends. China's World Trade Organization membership
has enabled it to fully integrate into the global economic system and reap the
benefits of its comparative advantage in labor supply. Furthermore, the level of
education in a country's speaks volume regarding its economic progress. It serves
as an excellent predictor for not just the current level of economic development,
but also the prospects for higher growth. Education and the labor market are often
used to nurture and enhance a country's valuable human capital. As states
compete in the global market economy, this is the national resource that, more
than any other, will define success in terms of GDP, investment environment, and
so on. China nowadays is working on the "Healthy China" project. As a result,
health investment has progressively become a priority for the Chinese
government. They must steadily boost governmental health investment, raise
people' health expenditures, encourage the development of the health industry,
and finally help China achieve long-term economic growth. Moreover, strong
productivity growth is the primary reason behind China's extraordinary economic
growth.
2. Explain the TVEs as an income revenue of the government as well as enhancing
village or town’s ownership while maintaining investors protection.
In terms of growth rate and productivity, China's township village enterprises
(TVEs) surpass state-owned enterprises (SOEs) for the reason that, first, TVEs
reflect ambiguous or informal private property rights, that are most effective in
partial reform. Second, because township village enterprises are small and scaled
 like industrial enterprises, officials can keep a close eye on TVEs and limit their
ability to cross-subsidize. Third, the severe market discipline that TVEs face makes
indirect market monitoring an efficient way to alleviate agency concerns. China's
township and village businesses (TVEs) arose and flourished fast following reform
and opening-up, becoming the rural economy's driving power and an essential part
of the national economy. The emergence of TVEs has fundamentally altered the
layout of rural livelihoods, which formerly relied primarily on agricultural production,
and has encouraged agricultural modernization, rural industrialization, and
farmer's income growth, thereby effectively furthering China's poverty reduction
effort. However, in order to stay competitive in China's fast-growing industry,
through the development of both business and technology, the economy will
necessitate modifications in its organizational form. The performance of TVEs has
been excellent, but only when compared to these other business organizations.
The pressure to change will be tremendous, and it may be necessary to change
the ownership form of the TVEs.
3. Compare the China’s rapid income per capita output as against United States. And
how this growth proves the Development Miracle in China.
After years of state ownership of all productive assets, China's government
embarked on a significant economic reform initiative. It encouraged the formation
of rural companies and corporate businesses, liberalized foreign commerce and
investment, eased state power over certain pricing, and invested in industrial
production and workforce education in an effort to reawaken a slumber economic
giant. By almost all accounts, the strategy has been a huge success. China's
expanding worldwide economic dominance, as well as its trade and investment
practices, have had an impact. Congress is particularly interested in issues that
have significant ramifications for the United States. While China is a significant and
expanding market for American businesses, the country's transition to a free-
market economy is yet unfinished. As a result of the economy, initiatives that are
deemed unfavorable to US economic interests have emerged, like as industrial
policies and intellectual property theft. This report includes background information
on China's economic rise, as well as the country's recent economic structure and
the issues it faces in order to preserve economic growth, and also the difficulties,
prospects, and consequences f or the United States since China's economic rise
is a source of concern. Despite major challenges in China when it comes to
measuring economic data, these findings hold up after several testing for stability.
As a result, they provide a great starting point for future research into the potential
importance of productivity measures in other emerging countries.