China is the second largest socialist market economy in the world. According to the purchasing power parity, International Monetary fund has declared China to be the world leader. This is the reason why china plays a major role in the growth of world economy (Fig. 1). The Chinese economy was fastest growing economy until 2015. However in recent times it has seen a slowdown. The setback has made Chinese economy centre of world’s attention. In the year 2015 Chinese GDP was 6.9% and for 2016 it is forecasted to be around 6.3% (Fig. 2).
China enjoys the status of being international nucleus for manufacturing industry. It is the world’s largest manufacturing economy of the world. China is also largest exporter in the world. Its’ economy is majorly dependent on the exports of goods produced by its manufacturing businesses. However, it is soon becoming an issue for global economic crisis. For the economic growth of East Asian developing and emerging economies (DEE), there is a large degree of dependency on exports. These exports are majorly done to the EU and the USA. China is at the core of East Asian production network (Akyüz, Y., 2011). It is imperative for the Chinese economy to sustain and grow for ensuring growth and stability of the world economy.
Will China’s planned level of growth (6.5-7% in 2016) continue depend to upon exports by manufacturing businesses?
Many renowned economists have been suggesting that China would surely reach its targeted growth in 2016, provided they are driven by innovation and technological advancement. The prime factors that would add to the continuous growth in Chinese economy in the coming future include transfer of technologies from the countries with great industrial advancements. This would help China to boost its productivity. Another important factor could be encouragement of entrepreneurship in the country. By using the innovation and new ideas production costs can be curtailed thereby adding up to the country’s growth. The government of China must also focus on urbanization in a huge way. This would ensure sustained growth of the economy (Xin Hua, 2016).
Therefore we can say that for China to attain its target of 6.5-7% growth in 2016, complete dependency on exports would be a bad idea. An immediate need for the major shift form export to internal consumption looks like a more promising way.