China and Economic Growth
China is a country that has been growing in power in the region. This summary aims to provide some understanding of China’s long run economic growth as well as to highlight some of the economic drivers behind this growth. This would be fundamental in bonding strong Australian-china relationships in the future.
Long-run Growth in China
Economic growth in a country can best be defined as the increase in the amount of goods and services produced by that economy over time or an increase in volume of priced goods and services (Frijters, Dulleck, Torgler, 2008). The Gross-Domestic Product (GDP) best quantifies the economic growth in a country.
Gross Domestic Product=Consumption spending+Investment spending+Government spending+Exports-Imports
Figure 1: GDP of China and GDP of Australia over the past ten years (2000 to 2010)
The illustration in Figure 1 above shows the GDP of China and Australia from the year 2000 to 2010 (OECD, DFAT, 2010).
GDP in China has seen an increase of almost US$1000 Billion every year. In comparison, Australia has seen smaller but steady increases as well. However, GDP has yet to reach more than US$1000 Billion. GDP in China in 2010 is ten times that of Australia in 2010. This is a significant growth trend that is being observed.
Figure 2: Growth of GDP in China and Australia over the past ten years (2000 to 2010)
The illustration above shows the percentage changes in GDP growth from 2000 to 2010 (OECD, DFAT, 2010). From the years 2000 to 2006, where Australia saw lower growth increases, China on the other hand saw a steady climb in growth, peaking at 14.2%. Although both countries had drops in positive growth during the Global Financial Crisis (GFC), China still maintained percentage growth above 8%. In the last year, an increase in growth has been observed.
Growth in the long-term is determined by the productivity of a country and therefore, the production and facilitating...