![]() ![]() Here we can roughly see the fact that China's economic growth or prosperity in the past decades ultimately came mostly from her prospering external trade, or from the help of the wealthier foreign consumers, which mainly comprised of 500 million or so richer and stable middle-class residents in the US, the EU countries, Japan and other richer Asian countries. Her urbanization strive in turn had bid up the property prices, sustaining the prosperity of the property sector and increasing the domestic industrial demand, thereby forming a virtuous circle. ![]() Which means, before Hu and Wen, the massive migration of rural workers to the cities had propped up the country's consumption demand, accelerated her urbanization strive, and raised her economy's total factor productivity. Her GDP kept on growing quickly at the double-digit rates - the growth was so fast that by 2003 the new Beijing leaders, Hu and Wen, had to propose lowering the country's growth rates. Her industrialization stimulated the domestic property market, which in turn increased the internal demand for her industrialised products, forming a virtuous circle. The country was gradually transformed from a rural country into an industrialized one. The massive migration of rural workers to the exports assembly sector meant that the income of the rural population kept on rising very quickly, which in turn had greatly stimulated the country's domestic expenditures. ![]() At one time, the external trade as a proportion of her GDP reached as high as 60% - China became the world's factory. So during that period the country's GDP was mainly pulled upwards by her external trade. Since the "Household Contract Responsibility System" had released 70% of the labor force in the rural villages, the country's exports assembly industries were supported by a massive amount of cheap labor. (A) During the reign of Jiang Zemin/Zhu Rongji (March 1993 - March 2003). China's current accumulating economic problems can (also) be explained from the point of view of the major economic policies enacted by the Beijing leaders in the last 3 decades. ![]()
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