Transcript China’s Modern Economy

A Socialist Market Economy
(It’s a mix!)

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
 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%
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?
Cargo lines the docks, awaiting export from the Yantian International Container Terminal in Shenzen

1.4 billion people = greatest natural resource on
the planet!
Rank
While we are sitting in
class…
•How many Chinese
children will be born?
•How many American
children will be born?

Country (or dependent territory)
Population
Date
% of world
population
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%
Largest human migration in history as hundreds
of millions of peasants move from the
countryside to live in urban areas
 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
 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?
 “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.
•
How many Chinese children were born?
• 1, 394 (34/minute)
•
How many American children were born?
• 328 (8/minute)