Jyruss Regalado

MM512

China's modernization journey has been characterized by a shift from its longstanding agricultural
civilization to an ambitious goal of becoming an industrialized society. After the Communist Party of
China (CPC) came to power, it set the transformative objective of transitioning China from an
agrarian nation to an industrial one. This vision was realized through various development strategies,
including the Four Modernizations, "pioneering a new path of Chinese-style modernization," "the
Three-step Development Strategy," "the New Three-step Development Strategy," and the
establishment of the "two centenary goals." Over time, China moved progressively closer to
achieving socialist modernization.

In more recent times, under the leadership of the CPC Central Committee, with Comrade Xi Jinping at
its core, China has aimed to build a moderately prosperous society in all aspects and initiated a new
phase in building a socialist nation, marking its continued evolution and commitment to
modernization.

High Savings and Investment Rate: China's high savings rate, coupled with substantial foreign direct
investment, has led to significant capital accumulation. This, in turn, fueled economic growth by
boosting employment, exports, and technology transfer.

Relaxation of the Household Registration System: The relaxation of the household registration
system enabled the movement of people from rural to urban areas. This shift has allowed secondary
and tertiary industries to absorb surplus agricultural labor, leading to increased labor productivity
and making the demographic dividend a key driver of economic growth.

Utilization of China's Land System: The Chinese government leveraged its unique land system to
drive development. Land not only fueled economic growth but also facilitated structural change. The
government used low-cost land to attract investment for rapid industrialization and accelerated
urbanization through land capitalization, creating a "land-based development" model.

However, as China's economy has shifted toward a new normal of moderate growth, the
effectiveness of capital accumulation, the demographic dividend, and the "land-based development"
model has declined. To sustain growth, China has embraced innovation as a national strategy,
making substantial investments in research and development (R&D), patent output, and the
development of new products. This shift toward an "innovation-driven" approach is aimed at
ensuring sustainable development in the face of evolving economic conditions.

China's journey of structural transformation took a unique path, transitioning from national
industrialization to rural industrialization, industrial park-based industrialization, and ultimately
becoming known as the "world's factory."

China maintains a distinctive dual economic structure, marked by dual-track urbanization and a shift
in the relationship between urban and rural areas from division to coordination, rural revitalization,
and urban-rural integration. This transformation is facilitated by the movement of agricultural surplus
labor and the shift from traditional agriculture to agricultural industrialization, providing the
industrial foundation for urban-rural transformation.
In the era of planned economy, China operated with an internally circulating, self-sufficient industrial
and supply system. However, the lack of market power led to economic inefficiencies and constant
shortages.

Since the era of reform and opening, China's economy increasingly depended on foreign countries to
compensate for insufficient domestic demand as the economy expanded and commodities became
more abundant.

After the global financial crisis of 2008, China's economic aggregate continued to expand, and
domestic demand increased. However, rising populism in Western developed countries and anti-
globalist sentiments caused China's foreign trade dependence to decline. This situation called for the
development of a new economic pattern in which "the domestic cycle plays a leading role while the
international and domestic cycles mutually reinforce each other."

This unique development pattern is an adaptation to evolving global economic conditions and a
response to shifting global dynamics.

Economic Growth: China's significant achievements in poverty reduction are closely linked to its
robust economic growth, which has created opportunities for income growth and overall well-being.

Regional Poverty Alleviation: The Chinese government's policies have emphasized regional poverty
alleviation and development, targeting areas that were poor.

Socialist System with Chinese Characteristics: The unique socialist system in China has played a role in
facilitating poverty reduction and improving living standards.

Income Growth and Distribution: Over time, there have been notable changes in the structure of
income sources and income growth. While there was income egalitarianism before reform and
opening, the income gap expanded during this period. These changes are influenced by shifts in
incentive mechanisms due to economic transformation and the distribution of economic benefits.

Common Prosperity: Achieving common prosperity in China necessitates a combination of internal

and external mechanisms, including property income, intergenerational transmission of property,
intergenerational transmission of human capital, and fair and reasonable income distribution.

Quality of Life Improvements: Over the past seven decades, there have been significant
improvements in the quality of life for various groups and regions in China. These improvements
have been driven by better public services, including infrastructure development and the
establishment of social security systems. They have contributed to enhancing people's happiness
and well-being.

In essence, China's human-centered development approach places a strong emphasis on improving

the well-being and quality of life for its citizens, with a particular focus on reducing poverty and
ensuring common prosperity.

Chinese development economics are rooted in a holistic and pragmatic approach, focusing on the
following key principles:

Historical Perspective: It emphasizes a comprehensive historical view to analyze the development

process in China, ranging from the challenges of modern China to the exploration of socialist
modernization. This approach seeks to build a theoretical system of Chinese development economics
through a combination of historical logic, practical logic, and theoretical logic.

Macro-Micro Integration: Chinese development economics incorporates both macro and micro
perspectives on development. It takes a macroeconomic approach to explain China's unique growth
and structural transformation while also emphasizing the behavioral and performance characteristics
of institutional and policy experiments on various entities. It places a strong emphasis on the well-
being of the people and development quality.

Chinese Practice-Based Theory: It combines typical facts, key concepts, theoretical analysis, empirical
testing, and case studies from China's economic development. The aim is to create a dynamic blend
of China's practical development experience and systematic, rational economic theoretical
frameworks.

The future of Chinese development economics is oriented toward achieving sustained economic
growth, building a modern socialist country, and mainstreaming Chinese development theories
globally. It emphasizes the scientific connotations of new development stages, concepts, and
patterns and seeks to address development challenges through problem-oriented analysis.

The main directions for future development economics include a focus on micro-level issues,
understanding the historical evolution of developed and late-developing economies, and
constructing development theories that consider various pathways to modernization,
acknowledging that there is no one-size-fits-all approach to development for different countries.
Ultimately, the goal is to improve the well-being of people in all countries by applying Chinese
wisdom and solutions to development challenges around the world.