Result of reform in china

In the past two decades, the rate of economic growth in China has been one of the highest in comparison with other countries in any period of world history, and they accounted for about 9% annually since the start of reforms in 1978. This means that in less than two decades of real output and real incomes have increased by four times. About 40% of the increase is the result of increasing capital. The increase in production and income has led to a sharp increase in the volume of domestic savings and investment. The increase in the volume of the means of production has led, in turn, to improve productivity, increase production and income growth. The latter, led to an increase in foreign direct investment.

The expansion of real output in China was accompanied by the rapid development of international trade. Chinese exports increased from U.S. $5 billion in 1978 to more than 1,581 billion dollars in 2010. Exports provided the foreign currency, which was necessary for the import of consumer goods and capital goods. Along with the import of capital goods from the industrialized countries have come into the country and new technologies that are part of, for example, plant designs, industrial equipment, office equipment and telecommunication systems.

In the years of reform Chinese real GDP and real incomes have grown much faster than the population of the country. Per capita income, starting in 1980, increasing each year faster rate of 8%. This is remarkable, because China's population is growing by 14 million people (in spite of policies that encourage family "one-child". Currently, the annual income per capita was 4,264 U.S. dollars at the prevailing exchange rate.

The growth in per capita income in China was due to the use of capital in large volumes, improving technology and reallocation of labor to activities with low productivity to activities with higher productivity. One example of this was the reallocation of labor reallocation from agriculture to urban manufacturing sector. Another example is the redistribution of state-owned enterprises to private firms. Both of these processes have contributed to an increase in labor productivity in China. And since such a reallocation of labor has been gradual, it was not accompanied by mass unemployment. Currently, the unemployment rate in China is about 4.1%, although in some regions of widespread underemployment.