China’s Modern Economy
16
China’s Modern Economy A Socialist Market Economy (It’s a mix!)
-
Upload
guthrie-hynes -
Category
Documents
-
view
33 -
download
2
description
China’s Modern Economy. A Socialist Market Economy (It’s a mix!). China’s Economic Transformation. In the 1980s new economic “rules” were introduced and applied only in certain urban areas on the Pacific Coast known as Special Economic Zones Senzhen Zhuhai Shantou Xiamen - PowerPoint PPT Presentation
Transcript of China’s Modern Economy
China’s Modern EconomyA Socialist Market Economy
(It’s a mix!)
China’s Economic Transformation
In the 1980s new economic “rules” were introduced and applied only in certain urban areas on the Pacific Coast known as Special Economic Zones• Senzhen• Zhuhai• Shantou• Xiamen• (3 more were added
later)
The Goal: attract technologies and investments from abroad• Government Incentives included
Low taxes Less environmental regulations Eased import-export regulations Simple, low-risk leases Hiring [relatively cheap] labor under contract Profits were allowed to be sent back to investors’ home countries
• Additionally, the Chinese Government built business-friendly infrastructure Expanded seaport facilities, roads, railroads and airports Constructed apartment buildings to accommodate hundreds of
thousands of workers
Did the experiment work??
“Made in China” What % of the goods sold at Walmart
are made in China?A. Less than 25%B. Between 25 and 45 %C. Between 45 and 70%D. Over 70%
Made in China
Cargo lines the docks, awaiting export from the Yantian International Container Terminal in Shenzen
China assembles more toys, stitches more shoes, and sews more garments than any other nation. It has also become the world’s
largest maker of electronics.
WHY?
Why is China the “world’s factory floor of choice”?
1.4 billion people = greatest natural resource on the planet!
Largest human migration in history as hundreds of millions of peasants move from the countryside to live in urban areas
Rank Country (or dependent territory) Population Date % of worldpopulation
1 China 1,347,350,000
December 31, 2011 19.22%
2 India 1,210,193,422
March 1, 2011 17.27%
3 United States 313,406,000
April 22, 2012 4.47%
4 Indonesia 237,641,326
May 1, 2010 3.39%
5 Brazil 192,376,496
July 1, 2011 2.74%
6 Pakistan 179,345,000
April 22, 2012 2.56%
7 Nigeria 162,471,000
July 1, 2012 2.32%
8 Russia 143,056,383
January 1, 2012 2.04%
9 Bangladesh 142,319,000
March 15, 2011 2.03%
10 Japan 127,650,000
March 1, 2012 1.82%
While we are sitting in class…•How many Chinese children will be born?•How many American children will be born?
The “world’s factory floor of choice” People not machinery = savings Little to no regulation = savings Cultural values reinforce self-discipline
and obedience = lower management costs• Only 15 managers for 5,000 workers
Our High School: 3 managers for 129 workers Lower Cost of Living = Lower Wages
• Companies don’t have to provide ‘benefits’ like healthcare or retirement/pensions
• NOT the cheapest labor! Stability & reliability
China does not have the cheapest labor!
What is the “China Price”? The price at which Chinese
manufacturers can deliver certain goods and services
The price American (or any other country’s) manufacturers/suppliers have to match to keep their customers
The pros and the cons?
“China Price”
“China Price”
“China Price”
Apple & China
“How the U.S. Lost Out on iPhone Work”• “We shouldn’t be criticized for using Chinese
workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
People flooded Foxconn Technology with résumés at a 2010 job fair in Henan Province, China.
While we were sitting in class…
• How many Chinese children were born?• 1, 394 (34/minute)
• How many American children were born?• 328 (8/minute)
