China has become the world’s second economic power in four decades, to the astonishment of many observers and thanks mainly to four factors. The first is Deng Xiaoping’s opening-up-to-the-world policies and the 1979 Equity Joint Venture Law. Together they have allowed (among other things) foreign capital and Western companies to enter China, transforming the domestic economic landscape entirely from one that is traditional and obsolete to one that is dynamic and modern. The second factor is the State Strategy outlined in the various Five-Year Plans (FYP). This strategy has led to the gradual flourishing of the Chinese economy and that of some industries targeted by the State in the FYP. The third factor is China’s most precious treasure, namely its labor force, whether the cheapest or the most educated. Estimated at over 786 million in 2017, this labor force has allowed China to become the world’s factory in only three decades. And finally, the fourth factor is China’s diaspora or overseas Chinese (Huáqiáo who are Chinese citizens residing abroad and Huáyì who are of Chinese descent living abroad, regardless of their citizenship). On the one hand, the Chinese diaspora has sent remittances estimated at $64 billion in 2017, as reported by the World Bank’s Migration and Development Brief. On the other hand, some of these overseas Chinese came back home to benefit from China’s booming economy and offer their expertise gained abroad, mostly in Western countries such as the U.S. That said and in addition to these factors considered as … Continue reading How did China Become the World’s Second Economic Power?
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