1978, after the death of Mao, Deng Xioping began to end China's isolation
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What did the Open Door policy allow for?
Foreign investment, mostly from TNCs looking to open manufacturing plants in China.
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What did the TNCs new to China bring?
technology transfer, improved infrastructure, new jobs with higher wages.
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Why were TNCs attracted to China? (comparative advantage)
Low costs and large working age population, low set up and running costs, tax incentives provided by Chinese gov, large population meant access to a new market.
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What does SEZ stand for?
Special economic zone
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Why were SEZs set up?
areas established to encourage TNCS to set up manufacturing plants. These were 14 coastal cities (good port access) dubbed 'open cities' with special incentives
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What do SEZs provide for Foreign firms?
1. Availability of unskilled labour 2. access to huge new market 3. source of cheap labour 4. modest levels of investment needed
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What do SEZs provide for China?
1. Higher levels of foreign investment 2. Trickle down effect on the national economy 3. Technological transfer 4. Increased exports
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Shenzen, largest SEZ
location near Hong Kong critical to growth, people have re settled there due to the increasing affluence, setting up new schools, universities etc (but this has been a brain drain on the rest of China), now there is a rich mix of foreign and domestic
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Reduction of Chinese people living on less than 1$ a day 1990-1998
150million
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Growth of Chinese economy 1980s-1990s
eight times bigger in 1999 than 1980
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China joined the WTO in
2001
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Joining the WTO meant?
Even larger market potential for exports, e.g. Car sales exceed 2 million in 2002. WTO opened CHina's market up to competition, the demand for Chinese goods should increase
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FDI into China in 2002
$152.7 billion
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Issues caused by China's rapid development
increase in gap between rich and poor, massive rural-urban migration, environmental deterioration, export driven economy leaves it vulnerable.
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Global Factors affecting China's growth
1. 2001, joined WTO 2. 53% of exports produced by foreign owned firms 3. China out producing USA in mean and steel 2007
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National Factors affecting China's growth
1. 1978, open door policy 2. 1990s, growing wealth = capitalist economy 3. large workforce 4. increased spending on health care/education 5. creation of SEZs
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Other cards in this set
Card 2
Front
What did the Open Door policy allow for?
Back
Foreign investment, mostly from TNCs looking to open manufacturing plants in China.
Card 3
Front
What did the TNCs new to China bring?
Back
Card 4
Front
Why were TNCs attracted to China? (comparative advantage)
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