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  • Michael N.

The second largest economy in the world




China is the world’s second largest economy. However, fifty years ago, its people were some of the poorest and many lived in poverty. Today, China has nearly completely eradicated poverty and it is the second largest economy in the whole world. Every second item you touch might say Made in China on it.


In 1976 on the 9th of September, Mao Zedong - arguably the most famous person in the history of China - died. Mao Zedong was the leader of the Chinese Communist Party and a dictator. His policies kept the people of China poor; once he died the Chinese economy started growing. But why did Mao Zedong make China poor? Back at the time of Mao Zedong, China didn’t have any factories: its economy was completely dependent on agriculture. Mainly wheat and other crops were being exported.


Between 1949 and 1978 the Chinese economy grew only by 4%. At the time, nine people had a net worth higher than the whole of China. The Chinese State controlled all of the prices and its strict policies left no room for growth. In the late 70s 800 million people lived in poverty. That soon changed.


The government tried to move away from communism and opened trade with other countries. Farmers were allowed to sell a portion of their crops for a price they wanted. The government was seeking foreign investment and they set up zones for this, such as Hong Kong and Shenzhou. Companies came to these areas because people in China asked for less money. What was considered a very good salary in China, could have been an average salary in Europe or North America. The Chinese people asked for less money because the cost of living in China was lower than western countries‘. On average from 1979 to 2018 the Chinese economy grew by 9.5% yearly. This means that China managed to double its economy every eight years.

As you may know, China is now the biggest exporter in the world, exporting trillions of dollars worth of products every year. As China asks for less money for work, it has low labour costs, making things cheap for richer countries. That‘s why so much of what we have was made in China and why it’s so cheap even if it came from thousands of miles away. The current Poverty rate in China has reached 0.8% from what was 88%.

China does face problems due to this. It has mega cities with lots of cars, making the streets unbreathable and unlivable. It’s factories let out thousands of tonnes of Co2. If China wants to tackle climate change it’s economy growth will fall to 5% yearly, which is a reason why China hasn’t set many laws or efforts to stop climate change.





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