Sample Solution

China’s mainly socialist market economy has sustained an incredibly high rate of average annual growth in real GDP of 10.1% between 1998 and 2008 and peaked at 14.2% in 2007, however slowed to 9.2% in 2009, due to the impact of the Global Financial Crisis. The Chinese government responded to the GFC by implementing a US$586 billion fiscal stimulus package in November 2008 to maintain a growth target of 8% in 2009-10. The economy therefore recovered in 2010, and growing by 10.4% in 2017, China’s growth was at $23.12 Trillion, the largest in the world, 6.8% greater than in 2016. China’s GDP grew at 6.5% year-over-year in the third quarter of 2018. China’s industrialization and modernisation has been based on ‘driving growth’ through foreign investment and international trade. After the USA, China is the second largest economy in the world measured by the nominal value of its GDP in US dollars and at market exchange rates. In 2016, China’s share of global GDP was 17.8%, share of world population was 19% and share of world exports of goods and services was 10.7%. Furthermore, with rapid economic growth throughout China over the past few decades, there has been an ample decrease in poverty. The World Bank estimates that over the last 25 years, China’s poverty has reduced by 400 million people living off $1 US per day. Moreover, one of the largest impacts on China has been globalisation as economic growth was sustained at between 7% and 10% in the 1990’s and 2000’s, with business investment and net exports being the main ‘drivers of growth’. However, between 2011 and 2015, this growth rate began to fall (9.5% and 6.7%, respectively), as growth globally began to stall and China began to transition to domestic sources for growth, with a growing middle class society having a higher demand for more goods and services to consume domestically.