THE PAST AND THE PRESENT
China, one of the last Communist holdouts, has made enormous advances over the last two decades in the direction of becoming an industrialized country with a market-driven financial system. Its people, a fifth of the world's populace, are still amid the world's poorest; however, the effects of quick industrialization and urbanization will make China a main economic power in the 21st century.
In 2000 and 2001, China's economy was performing moderately well. GDP growth was positive, although the actual rate was several percentage points below that which was reported. Price declines appear to be moderating. Budget deficits and national debt remain manageable, and the overall position in foreign trade, foreign debt, foreign investment and foreign reserves is excellent.
China's economic performance has fallen short in the critical area of job creation, primarily in the services sector. National employment growth in this sector stayed below 1% in 2000 and even slowed slightly from 1999. This continued a 3 year long trend. In 1998 and 1999, employment in industry declined but employment in agriculture actually increased, indicating the share of employment in services has hardly changed. China's challenge is to generate GDP growth based on quick development of service-sector jobs.
China is in the initial phase of capital buildup and, consequently, is dependent on quick labor output development. As capital investment in technology increased in the past decade, China is demonstrating quick labor efficiency development compared to any other country.
China has approximately 735 million people or 58% of the population in the labor market. The number of unemployed wh ...