The Chinese economy, since 1979, has been experiencing spectacular performance on account of its successful economic reform and open-door policy. The average annual economic growth rate for the period of 1979-2006 was 9.7%, with many ups and downs in the process. Real growth rate for 2007 was 11.9%, up from 11.2% in 2006. In fact, China has chalked up double-digit rates of growth for the last five years in a row, averaging 10.7% a year (2002-2007), since its accession to the WTO in 2001. This is truly phenomenal, especially because such `super-growth' occurred with a low annual inflation rate below 3% for the whole period.
Many dynamic East Asian economies like Japan, Korea, Taiwan and Singapore had enjoyed high growth for two to three decades before, basically in the 1960s, 1970s and most of the 1980s. But they had never registered double-digit rates of growth continuously for five years. China's recent dynamic growth is historically unprecedented, even in the context of the past high-performance of East Asian economies.
As shown in Figure, China's economic growth process in the 1980s (the first decade of reform) had fluctuated quite a lot due to the so-called `reform cycles'. Since 1990, the growth process has displayed two spurts of high growth: one sparked off by Deng Xiaoping's Nanxun (tour of South China) in early 1992, and the other by China's accession to the WTO in 2001. The Nanxun effect, as it may be called, signals China's long march into a market economy by deepening and broadening economic reform. The extensive marketization that followed had tremendously enhanced economic efficiency and productivity. |
