According to International Monetary Fund (IMF), China recorded $6,747 nominal GDP per capita and $9,844 GDP per capita (PPP) in the year 2013. China's population approximation is at 1,392,472,656 people; its fertility rate is 1.58 births per woman, and life expectancy is approximately 73.49 years. Population growth rate of republic of china is at 0.46% per annum. China engages in international trade with countries all over the world, therefore, it experiences open economy (Cypher, 2014, p.237).
China has overtaken Latin America countries in competitiveness in international markets. Its well structured economy and strategic planning has attracted foreign companies through incentives such as creation of export-processing zones and tat exemptions. China enjoys a competitive advantage in using labor-intensive method in its manufacturing sectors (Knight and Ding, 2012, p.57). Cheap and affordable labor cost has resulted to increased production of goods and services consequently increasing trade.
China experiences mixed market economy where both the government and market forces play a role in production and distribution of goods and services. The government of the republic of China involved in market operations, the state ensures that goods and services offered to consumers are of desirable quality and quantity. They government can also formulate legislation so as to promote investment in the country through tax cuts and tax exemptions. Market forces also determine the demand and supply of goods and services in China (Knight and Ding, 2012, p.57).
China’s foreign exchange is undervalued as yuan is selling for a lower value than it is worth. Central bank has explored different interventions in foreign exchange market so as to improve performance of its currency. It accumulated $4 trillion exchange reserves between 2013 and the first quarter of 2014 so as to push down the value of Yuan by creating artificial demand for the dollar.
The Republic of China competitiveness and increased dominance in the world markets is a strong indication that it is in the right course of economic growth. The use of macroeconomic policies aimed at stabilization of prices of commodities, creation of employment opportunities and maintenance of balance of payment in international trade will impact positively on economic growth ( Knight and Ding, 2012, p.57).. The use of fiscal policies such tax cuts and increased government expenditure on the economy is likely to boost performance of sectors in the economy thus resulting to economic growth.
References
Cypher, J. M. (2014). The process of economic development (Fourth ed.). New York: Routledge.
Knight, J. B., & Ding, S. (2012). China's remarkable economic growth. Oxford: Oxford University Press.
