The Chinese Phenomenon of Economic Growth

163
DOI: 10.20542/0131-2227-2022-66-1-5-15
V. Varnavskii, varnavsky@imemo.ru
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation.

Received 12.07.2021.

Abstract. Modern China should be considered as an unique experiment and great world project of human civilization, effectively a co-product of the Communist Party of China (CPC) and the West. The centuries-old concept of a free-market economy fell on fertile ground of the hardworking Chinese people and in a short historical period since the beginning of the reform has finally bore fruit. Globalization and digitalization have greatly helped the Chinese economy to expand around the world and have become powerful catalysts for Chinese economic development, providing it with new approaches to doing business. The article attempts to analyze this phenomenon and systematize the factors of China’s growth. Key aspects of the Chinese economy transformation are studied, such as GDP (in current and constant prices) and GNI per capita, manufacturing and trade, finance and capital. Special attention is paid to the global leadership role of China or/and the USA: Economy, Manufacturing, and International Trade. An in-depth comparative analysis of the economic growth indicators for China and the USA is based on extensive international statistical data. The author focuses on estimates of key indicators published by international bodies, such as the United Nations, UNCTAD, UNIDO, OECD, WTO and others. Various think tanks, independent agencies and other institutions such as McKinsey Global Institute, Primakov Institute of World Economy and International Relations RAS, Congressional Research Service (CRS), United States–China Economic and Security Review Commission, Committee on Foreign Investment in the United States (CFIUS) have been analyzing Chinese phenomenon of economic growth. Quantitative assessments of China’s economic growth are discussed. As shown, China plays a major role in the world economy and manufacturing. It is now the world’s first country by many economic indicators. In 2007, China became the world’s largest merchandise exporter. In 2009, it took the 1st place in manufacturing value-added output. Measured by purchasing power parity (PPP), in 2017 China stood as the world-largest economy in terms of GDP in current US dollars. Over the past decade, China has provided at least 30 percent of global GDP growth, while the United States was half as much. China is in the world’s top two for receiving and being the source of foreign direct investment (FDI). In 2020, China had 124 Global Fortune 500 companies compared to 121 American. At the same time, the US remains the world leader in many other quantitative indicators, for example in GDP at official exchange rates, innovation, research and development, finance, and services. It also ranks first in the world in terms of quality indicators of economic development. The author gives his vision of the China’s economic growth fundamental factors. Four of them are identified: a) low labor costs, b) well-designed legal environment for attracting foreign capital, c) massive FDI influx, d) imports of capital goods as well as modern Western technologies, including transfer of critical technologies, intellectual property and know-how (mainly through acquisition of Western firms). The general conclusion is that the reforms completely transformed the lives of Chinese people. China of the 1970s 80s and today’s China are two different economic, industrial, scientific, technical, socio-humanitarian entities.

Keywords: economic growth, GDP, manufacturing, foreign trade, capital, world economy, globalization, China, USA


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For citation:
Varnavskii V. The Chinese Phenomenon of Economic Growth. World Eonomy and International Relations, 2022, vol. 66, No 1, pp. 5-15. https://doi.org/10.20542/0131-2227-2022-66-1-5-15



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