China Economy Research Paper

ABSTRACT China reformation and rebalancing of economy has changed the international system. Right now China is consider as one of the superpower because of their economy this paper was written to discuss about the China’s economic development from the past thirty years, how China’s economy has influence the international system or not and analyze whether china can surpass the United States as global economic power based on the arguments by various scholars.

Key Words: China, United States, reformation, economic growth, influence, international economy

INTRODUCTION International system changes with time. There are a lot of differences that we can look if we look on various types of perspectives. One of the perspectives is in terms of the

China is very suitably strategic to be one of the countries to invest in because it has a lot of opportunity in terms of agriculture and lot more. Adam Smith, the father of open market theory has stated that China had been the richest country for a long time ago as they have the most fertile, cultivated industrious, prosperous, urbanized country for the past thousands of years (Smith, 1776). If we look back in the history, the China Empire has started for a long time ago. That means they have been civilized for a long time ago. Even though scholars believe that china’s economy have the potential to be blossom, but they practice rural economy. Example that can be chosen is the agriculture sector. But in 1949, China’s economy started to change. It all started when Mao Zedong who was China’s Communist party leader took power in 1949. He changed China’s economy from rural based economy to industrial sectors economy (Quick guide: China's economic reform, 2006). Farm produce were collected and handed over to the larges communes and the resources have been nationalized whereby all of the resources have been shifted into heavy industries (Quick guide: China's economic reform,

After the reformation of state owned enterprise in 1979, a Duel-Priced System was introduced whereby the state-owned industries were allowed to sell their product higher than the plan quota (1981: Dual-track Price System). When the owner can sell their product above the plan quota and market price, it will avoid shortages that always happened in Mao’s era. Besides that, when China implemented the Industrial Responsibilities System, it allows the state-owned enterprise to manage their owned product. It was the first time in China since Kuomintang takes power where the private sectors can manage by themselves and the result, the percentage of the industrial output increase a lot (Brandt, 2008, p. 10). Besides that, Deng also introduced the Special Economic Zone that gives investors the chance to invest without the interference of the state government (Brandt, 2008, p.