THE DEVELOPMENT OF CHINA’S PERFORMANCE
Javier Silva·Route
Ⅰ. Introduction
Since the end of the 1970s, the Chinese economy has been expanding dramatically with an average annual growth rate of 9 percent. Capital formation, which has been fuelled by high domestic savings rates, has been equally notable and is now estimated to be 50 percent of GDP, according to the latest IMF figures. Annual inflation meanwhile remained steady at around 1 percent between 1996 and 2003, a period which was also characterized by periods of deflation despite the rapid expansion of the economy.
The expansion of China’s participation in international trade has been one of the most outstanding features of the country’s economic development. Chinese exports rose on average 5.7 percent in the 1980s, 12.4 percent in the 1990s, and 20.3 percent between 2000 and 2003. By 2003, China’s export growth rate was seven times higher than the export growth rate recorded by the world as a whole. Foreign direct investment has also soared, and currently over a billion dollars in FDI are invested in China each week.
Thanks to this remarkable economic growth, China no longer belongs to the group of low-income developing countries in the world and, since the end of the 1970s; some 400 million people have been lifted out of poverty.
