The Chinese Economic Miracle

Abstract

Since the 1980's China has experienced a prolonged period of economic growth. Antithetical to Mao Zedong 's original vision of a Chinese commune, Deng Xiaoping's economic liberalization heralded new growth and enterprise throughout China. Since economic reform, the urbanization rate in China has increased exponentially. Accompanying urbanization is a massive migration from rural West China to the burgeoning East, further increasing China's available labor reserve. As a result of China's abundant labor market, it is able to utilize a 24 hour workforce to sustain the development of cities and infrastructure to accommodate its rapid population growth. Amazingly, Deng Xiaoping was able to do this while maintaining an inherently authoritarian political institution. In addition to the success of its internal expansion, China has managed to accumulate enough production capabilities to become the world's number one exporter of commodities and intermediate goods. Today economists still struggle with ana!yzing the factors that led to the success of a national and economic framework that was thought to be mutually destructive. So how has China managed such monumental success where even its role models, Russia and the Soviet Union, have failed? The answer lies within the analysis of its consumption habits, its internal and international policies, and the unique economic characteristics that set the People 's Republic of China apart. Within this analysis is a guide to the successes and failures of China's institutional and economic policies, its strengths and weaknesses, and what factors and changes may result in the future prosperity or undermining of their growth and stability.