Chinas Economic Growth Due To Recent Foreign Policies

China's Economic Growth Due to Recent Foreign Policies


     Recent Chinese economic policies have shot the country into the world

economy at full speed.  As testimony of this, China's gross domestic product has

risen to seventh in the world, and its economy is growing at over nine percent

per year (econ-gen 1).  Starting in 1979, the Chinese have implemented numerous

economic and political tactics to open the Chinese marketplace to the rest of

the world.  Just a few areas China's government is addressing are agricultural

technology, the medical market, and infrastructures, like telecommunications,

transportation and the construction industry.  Chinese reform measures even

anticipated the rush of foreign investment by opening newly expanded industries

to out-of-country investors.  Effects of this sudden change in economic strategy

by a world power can be felt by practically every nation of the globe involved

in international trade.  The change in the amount of imports and exports to and

from China will increase the demand on countless markets, from automobile, to

petrochemical, to pharmaceuticals, and optical fiber.  Also, with all the

foreign investment China is receiving, the socialistic republic will only grow

more and more interdependent upon the world economy.  However, the impressive

growth rate of China's economy is not without its shortcomings.  Problems such

as inflation and inefficient state-owned enterprises plague the rise of the

Chinese economy.

     The main goal for China's modern foreign policies is the development of

the Chinese infrastructure.  The significance of improved communication and

transportation cannot be over-stressed.  Economically, enhanced means of

communication and transportation allows more expedient supply and demand

scheduling.  Two of the latest Chinese reform measures to aid in the development

of the country are the Provisional Regulations on Direction Guide to Foreign

Investment and the Catalogue Guiding Foreign investment in China.  Both these

policies place specific industries including telecommunications, machinery, and

electronics on top priority.  Funding for these projects come from foreign

investments and appropriations from the Chinese government in the form of grant

financing, and legislative or administrative support.

     Yet another example of the Chinese emphasis on industrial based growth

is the far-reaching goal of having just under 100 million telecommunication

lines by the year 2000. China's Central Ministry of Posts and Communication said

that in order to complete this major task China will enlist the aid of major

overseas suppliers and create manufacturing plants within the nation.  AT&T,

Motorola, Northern Telecom, Alcatel, Erricsson, NEC, and Siemens are just a

handful of the multinational companies which hold a considerable share of the

Chinese telecom market, once again proving that China is becoming a party to

global interdependence.

     The Chinese pharmaceutical market, much like Chinese industrial markets,

is experiencing rapid growth due to reforms in China's economic strategy.  The

nation's government has decided to lower import tariffs and remove the necessity

of an import license to bring pharmaceuticals into the country.  Also, patented

foreign drugs, such as Tylenol, are now being protected from counterfeiting by

administrative action.  The result of these provisions are overseas contractual

investments totaling $1.5 billion in the past five years, and income from the

medical industry's exports reaching 2.6 times the amount five years ago,

according to Zheng Xiaoyu, director of the State Pharmaceutical Administration

(scitech/med 1).  The pharmaceutical market's growth is another example of the

economic progress China has made.

     Even after accounting for all the economic benefits recognized by the

world, the Chinese still come out as the country with the most gains.  However,

there are more motives behind China's market reforms than just purely economic.

On the political fron
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