C2 Naughton Intro 3-14

C2 Naughton Intro 3-14 - Fmm l hDition t o Development The...

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Fmm lhDition to Development The Chinese ewnomy diaplays both unmaIched dynamism and unrivaled complexity. Sioce the early 19% China has wosisleotly been the most rapidly mowinn economy on earth, sutaininn ao averaze annual arowh rate of 10% - - - . . from 1978 through M05, according to official statistics Moreover, as every schoolchild know is the most ~~pulous wuntrv in the world: ib DOE- . . . . ulatioo surpwd 1.3 billion people in 2W4, despite a declining birthrate. Rapid growth and huge population have Long implied that China would even- Nally emerge into the hot ranks of world economies la the new millennium. this prods is already becoming a reality. Ws pons domeslic product (GDP) reached USI2.225 trillioo in uXH, valued at he prevailing exchange rate. 'Ibq China has gmwn past the two $2 trillion economies of the United Kingdom aod France to become the world's fourth-largest economy. Since %3M, China has also been the world's third-largest trading nation, aher the United Stales and Germany. The Chinese ewnomy naturally attracts superlatives Yet China is ah struggling to emerge from poverty. lhe World Bank "pro- moted" China from "lower inwme" to "lower middle inwme" status at the end of the 1990s. China's GDP is only about one-6fth the size of U.S. GDP, even though il has four timer the population. 11s 2005 GDP per capita (meas- ured at exchange raws) is $1,700, cmpanbk to that of the United States around 18.50 (valued at today's prices), and wmpared to 140,000 for the United States today. Morcovcr. China enwmpws diverse regional economies thal range from extreme poverly to relative prosperity. In large stretches of rural pearants still struggk om the margins of subsistence. while in Shangbi, Beijina aod Guangdoog a modem information economy is takinn root Coal-helcd boilers, reminivent of (be early stazes of the indus- ha1 s evolution, wexist with domestically dsigned nuclear power plants and a manned space program. Bureaucratic state-owed enterprises dominate some scroa but wmpete both with tiny, hardworking howehold businesses
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and with multinational mrporations whose managers are trained in the latest business school techniques This diversity drives a dynamic economy but also makes it difficult for us to see China whole. ultimately, China's diversity can be traced lo two incomplete transitions. First, China is still mmpleting its transition away bm bureaucratic socialism and toward a market economy. Semnd. China is in the middle of the indus- trialization procesg the protracted transformation from a rural to an urban society. China is in the midst of "emnomic development," the process that transforms every aspect of an emnomy, ronety, and culture.mese two transi- tions are bath far from compkte, md so China today canies with it pam of the traditional, the socialist, the modern, and the market, all mixed up in a jumble of mind-haggling mmpkxity.
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C2 Naughton Intro 3-14 - Fmm l hDition t o Development The...

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