China’s Uprising and Imminent Stagnation
China’s Uprising and Imminent Stagnation
Many of the Newly Industrialized Economies(NIEs) around the world are emerging economic superpowers because of their rising economic growth of 10percent annually, along with the many relative advantages(CA) they have which draw in large quantities international investment. One of the most prominent NIEs in the twenty-first century was China. China's prosperity, also known as "The China miracle" began in 1978 during the wise governance under the wise leadership of Deng Xiaoping who implemented the widely coveted "Open Doors Policy". The increased amount of trade between China with the rest of the world, becoming natural harbors that became areas of high export revenues such as coastal Shanghai, Zhuhai and Shenzhen. Agriculture employed nearly three quarters in the Chinese workforce at the time was liberalized and any barriers to trade and tariffs on imports were eliminated. This was a huge advantage to globalization's effects by making the most of the lucrative trade of goods and services. As such since 1978, China has enjoyed a remarkable growth that has averaged 10% or more per year from the 1980s to 2000s. The Chinese's success in the economy was thanks to deliberate creation the Special Economic Zones(SEZs) as well as Export Processing Zones(EPZs) by the government in regions like Shenzhen, Nanjing, Pearl River Delta and the Wenzhou manufacturing hub to the east. Such geographical zones are specialized in export-oriented industries, and bureaucratic red tape has been greatly reduced, as is as up to 50% tax deduction on profits during the initial five years, and other economic incentives. Visit:- https://darioitem.press/ They are now among the world's investment hot spots as they have racked up the 2.d largest foreign investment dollars for the past several years, behind just the USA. Over 300 Fortune 500 companies and Transnational Corporations(TNCs) operate in China which include Haier, Huawei, Infosys, Dell, Hewlett-Packard(HP), IBM, Honeywell, Toyota, Apple(Foxconn plant) and countless more. These zones have helped to earn large economic injections of foreign investments in the billions of dollars, China's "factory worldwide" status and economic significance around the globe is acknowledged by the world. China's huge total population of 1.3 billion also provides it with the robust economic CA of labor surplus at low cost for wages. Workers in Foxconn work for 10 hours per day for six days of the week, earning US$0.50-$2 per hour. Therefore, production cost is relatively little compared to the revenue gained which allows companies to make huge supernormal profits. Not only that, as of the 21st century, qualifications f Chinese workers are jumping, with many with respectable degrees from prestigious institutions like Zhejiang, Peking and even agricultural(Nongmin) universities. Foreign investment is pouring into high-tech sectors like electronic programs, software, pharmacy sciences and Research and Development(R&D) which makes China an ideal R&D hub. In the end, their diversity of workforce is able to cater for the low-tech and high-tech sectors, giving their economy a competitive edge and the ability that only a handful of other countries are enjoying. This being said, China's smooth run-up to the position it has today has its own set-of challenges. One of the biggest challenges is that the country is losing their "factory of the world" status. There is a decrease in the number of workers and wages increasing at a creeping 17% per year, and the expected increase is to be able to compete with those of US minimum wage by 2030. In the wake of their aggressive one-child policy that began in the 1970s In the Wenzhou hub, Wenzhou hub has a shortage of around one million workers while Pearl River Delta is short of 2 million. The whole country is facing a shortage of 4 million people. Meanwhile productivity has not been increasing since wages are growing rapidly and in Guangzhou it's risen to over 1000 yuan per month from just 860 dollars per month. Therefore, more and more TNCs are finding it profitable to hire locals and bring advanced technology back home for the good of their customers, including General Motors and Ford who have both moved their operations back to their home country of USA. Also, another challenge is the growing awareness of the lack in Corporate Social Responsibility(CSR) in China. Nowadays, thanks to social media, more consumers are aware of the human rights violations, abuse and pollution cases in China's EPZs which affect the quality of life of people. They are demanding that TNCs exhibit more CSR through sourcing suppliers who treat workers satisfactorily. CPI (Corruption Perception) Index(CPI) of China is about 7.1 and is one of the highest scores in the BRIC category with the exception of India ahead. In this regard, foreign investment is declining in a steady manner similar to the decrease of approximately 3% between 2011 and 2012. More firms realize that consumers will not purchase certain products that make the use of illegal exploitation of human labor. Lax environmental laws have caused Beijing's air to be contaminated with dangerous particles of 350 parts for every million(ppm) which is more than WHO organization(WHO)'s standards for safety a shocking seven times. Only 1% of the Beijing's inhabitants breathe healthy air, according to research and studies conducted. This has resulted in public anger, and businesses trying to satisfy the demands of the public decide to move production elsewhere. Not to ignore the fact that China is facing extremely strong competition from other BRICs, especially India which is expected to surpass the population size of China, which is 1.3 billion in 2035. Indian Gross Domestic Product(GDP) per person has also increased, and they are currently the top English-speaking country, as well as the second largest source of engineering science graduates. Hailed as the back-office center in the world, numerous firms like Dell outsourcing such services to them, creating more profits than manufacturing industries. The Shell Technology Center Bangalore(STCB) is a proof of India's ability in R&D and in the sciences, with many agencies calling India the next R&D hotspot. While China has been emphasizing on lower-revenue manufacturing of textiles, footwear and other industries. In the long term, they are bound to lose out to India on this issue of having a skilled and energetic workforce that can adapt to changes in requirements of the modern-day worker.

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