Introduction to Economic Growth
Economic growth is defined as a positive change in the level of production of goods and services by a country over a certain period of time. With that in mind, I must say that economic growth is often desirable for a country as a whole. However, one has to acknowledge and able to differentiate between Nominal Economic Growth (NEG) and Real Economic Growth (REG). NEG is derived without considering the effect of inflation whereas REG is calculated based on the effect of inflation of the current year. Therefore, it will be perfectly favorable for a country to experience the latter.
Current Background Studies of China
The number one populated country in the world of 1.3 billions, China has undergone a major restructuring for the past 30 years particularly at the economic sector. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in Gross Domestic Product (GDP) since 1978. Measured on purchasing power parity (PPP) basis that adjusts for price differences, China in 2009 stood as the second-largest economy in the world after US, although in per capita terms the country is still lower middle-income. In addition, on 15 April 2010, China”s economy was reported to grow at a pace of 11.90% from a year earlier, published by tradingeconomic.com (Appendice I). The Central Intelligence Agency (CIA) is an independent US Government agency responsible for providing national security intelligence to senior US policymakers. In its 2009 report, it ranked China as the number four leading country for economic growth at 8.70% compared to Macau, rank number one in the same category, growing at the rate of 13.20%. Undeniable, economic growth has brought about both positive and negative impacts to China. In view of these, I absolutely agree to some economists who think that due to economic growth “a proportion of the population is worse off, few actually benefit while small number are...
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