Advisor to the Prime Minister the Economists Research Paper

Advisor to the Prime Minister

The economists that support the ideologies of the economic globalization are of a strong assertion that this phenomenon has the power to shape and reshape progression in the economic activities and the economic globalization is hereby regarded positive stimulus that guard and ensure the enhanced excellence of life, a rapid increase in the economic activities but unfortunately this is not the case in all the situations. The unwanted by products of economic liberalization and economic globalization are hard felt in the developed countries like China.

The speaking volumes of inequality in china is also analyzed by the ratio of relative geographies and the ethnicities, the major portion forming the poor china population are widely distinguished in sects and ethnicities and are labeled by geographies. And due to the dispersed locations of the poor and rural china it becomes difficult for the state to get hold over the entire country's poor population. And the most relevant fact that contributes to the poverty causing inequality in china is the lack of welfare institutes particularly in the western china where approximately 7% of the working population is not contributing to the well being of the masses due to disabilities and another portion of the working age lacks the basic training and facilities to commence the activities as functional individuals.

1: Introduction

1.1: The Overview of the Chinese Economy

The most primitive adjectives that bombards our minds whenever the issue of economic liberalization is raised is the minimum government intervention along with less regulation followed by more individuals entering in the trade sector and participating actively in economic well being of a country. This particular school of thought has taken its roots from the classical liberalism, as minimum or even at some points no government intervention tends to hinder the business transactions and the state gives complete privilege to the citizens so as to encourage the trade activities to boost the economy simultaneously. It is for this reason that the economists regard economic liberalization as a mean of a nation attaining efficiency that will ultimately result in the positive sum game.

The economy and the present form of the trading polices in China have been a subject of great changes ever since the inception of the state sovereignty. The role and the participation of the government in the trading policies and campaigns have long been subject of changes till the present time since 1949. Owing importance to the socialist school of thought to design the political and the economic activities the state in 1949 begun to design and architect the national economy and had the control over the regulations. The era of government involvement further enhanced in 1950s when the sate promoted monopolies so as to accomplish the task of fixing the prices or goods and commodities and even the factors of production. China faced the similar pace and involvement of state in the business and trading activities till 1978 when the economic reforms took roots in the economy of china. As per the consequences of this reform the government intervention begun to lose its control to a great degree and the nation was lifted by a bulk of private entrepreneurs entering in the economy for trade and business activities. This episode of the Chinese history instilled a spark of pure economic liberation where all the private business owners were promoted. Rather that the state's encouragement for the foreign monopolization the stare encouraged the private businesses to first flourish the national market with their products and then granted them subsidies to invade the foreign markets to increase the foreign trade and help the Chinese nation fit in the patchwork of globalization rather that assertively enacting with the state's isolation. Irrespective of a liberal economic system the government of China took into due consideration and control over a few important and rare industries that determines the strength of the government the aerospace industry is one of them along with the national banks and a few other including People's Bank of China, National Development and Reform Commission, Ministry of Finance, and the ministries of agriculture; coal industry; commerce; communications; education; light industry; metallurgical industry; petroleum industry; railways; textile industry; and water resources and electric power (Wang, 2003).

1.2: Inequities in China

The comparative analysis of the economic and social development of china presents a significant gap of development and equality. As a matter of fact the tangible success of the nation in terms of economic development is a consequence of the economic reform 1978 but the devastated lives of the poor and the basic inequalities are the unwanted by products of the high pace economic activities and reforms.On evaluating the position of the china the fact comes to ample light that the economic freedom of china is embedded by a set of reforms that were visible in the previous decade.

The social system prevailing in China has a very low relevance with the high paced economic developments and well being. The hype of China might diminish once the ground facts about the dark economic liberalization are revealed and compared to the hype China tends to create across the globe. The initial ground that can be used to test the validity of the fact that china is a poor country irrespective of earning huge amounts from the foreign market is the bifurcation of the country into a small urban remote region and a huge rural area (Facts About Poverty in China Challenge Conventional Wisdom, 2009) the fact has been established that 99% of the rural population is contributed from the rural china and as a matter of fact they lack basic necessities and contribute to 80% of the total poverty the urban regions are anyhow well established and prosper.

The speaking volumes of inequality in china is also analyzed by the ratio of relative geographies and the ethnicities, the major portion forming the poor china population are widely distinguished in sects and ethnicities and are labeled by geographies. And due to the dispersed locations of the poor and rural china it becomes difficult for the state to get hold over the entire country's poor population. And the most relevant fact that contributes to the poverty causing inequality in china is the lack of welfare institutes particularly in the western china where approximately 7% of the working population is not contributing to the well being of the masses due to disabilities and another portion of the working age lacks the basic training and facilities to commence the activities as functional individuals (Report, 2009).

The basic reason why the inequalities and the relative difference in the rural and urban region is discussed is mainly to elevate and solidify the stance that the economic reforms of the china are limited to the trade activities in the urbanized metropolitan cities, and irrespective of the agricultural reforms the government role in ensuring an equal distribution of wealth, resources and basic necessities is a far cry. Additionally in the hype of being an economic liberalized state the government of China tends to close its eyes on its intervention and emergence as a welfare state.

2: Economic Liberalization

Economic liberalization is the system of economy that encounters to support the basic proposition of least government intervention to commence trade and commerce. Economic liberalization is considered to be the desired state of economy where all the factors of production and the choice of production and productivity remains firm in the hands of the private entrepreneur. The associated terms of the economic liberalization are free markets, mixed markets and positive sum game (Lal, 2010).

The free markets implies to the freedom of the producer to produce whatever he desires to produce but maintaining the decorum of legality. Economic liberalization is therefore characterized by the provision of the free markets. But while considering the working of the liberalized economies they are often found associated with the mixed market phenomena as well. As a matter of fact in today world of immense competition and constraints of global inflation the countries that even represents themselves to be economically liberalized do not operate altogether o free markets but have constraints in the form of mixed markets. This intermediate form of command and free economy is the mixed economy that restricts the private ownership of a few firms that represents the sovereignty of the state. The central or the state banks often fall in this category apart from the other major key sectors that are likely to earn the government huge revenues and margins (Elkins, 2004).

Besides the selection of the major tools to employ in the liberalized economies it is also important to elevate the complement of the economic liberalization, which is the positive sum game. The fact refers that economic liberalization has a positive tendency to increase the overall profitability of the businesses in a way that it end up in a win-win situation. Appling the phenomenon of antecedent consequence model it can be deduced that economic liberalization is the antecedent condition that….....