Discuss the Influences of Globalisation on the Chinese Economy and Evaluate the Strategies Used to Promote Growth and Development

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Globalisation is the breaking down of barriers between countries to form a global community, increasing international impacts on all aspects of life and economic activities. China, being the fastest growing economy in the world for the past two decades, has maintained an average rate of growth in real GDP of 10% per annum. In 1949, after Mao Tse Tung’s force defeated the Nationalists in the civil war, China attempted to modernise agriculture and industry, which failed to raise national output, resulting in the widespread poverty in China. After Mao Tse Tung’s death in 1978, Deng Xiao Ping, his successor, implemented a wide range of radical economic reforms in order to improve China’s economic performance by minimising the gap between china and high income countries. These reforms led to China’s integration into the global economy, which promoted growth and development. Since the integration of China to the global economy, its annual growth of real GDP has averaged 10% between 2004 and 2008, which is very high. However, due to the Global Financial Crisis (GFC), this rate of growth in real GDP slowed down to 8.7% in 2009. China’s government, suspecting this, implemented a US$586b fiscal stimulus package in November 2008 to maintain a growth of 8% between 2009 and 2012. This stimulus package did greatly for China’s growth as its real GDP was at 10% in 2010 and 9.2% in 2011. The stimulus package was used to invest in private and public spending on infrastructure as well as direct investment in Chinese industries. This shows that China wasn’t affected by the ripples of the GFC unlike smaller countries such as Australia. The impact of globalisation in China has helped China maintain a growth of real GDP between 8% to 10%, making it the fourth largest economy in the world, and on purchasing power parity (PPP), it is the second largest economy in the world, after USA.

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