How did China transform from a poor country into the world's second largest economy? (2024)
The Chinese economy has experienced rapid growth over the past few decades, particularly since the reform and opening-up policies initiated by Deng Xiaoping in the late 1970s.
With a GDP of 74.41 trillion yuan, or 10.82 trillion US dollars, China was the world's second largest economy in 2016, behind only the US.
China's GDP has grown by a factor of over 1,000 since 1952, but its growth was slow from the 1950s to mid-1970s.
People in rural China use small blast furnaces to produce iron in 1958 during the Great Leap Forward, a period of exaggerated agricultural and industrial ambitions. /Xinhua Photo
People in rural China use small blast furnaces to produce iron in 1958 during the Great Leap Forward, a period of exaggerated agricultural and industrial ambitions. /Xinhua Photo
The country remained relatively poor in this period, due to its backward infrastructure left by years of war as well as the inefficient planned economy and repeated political movements.
The country adopted sweeping reform and opening-up policies in 1978 and gradually shifted towards a market economy, beginning to unleash its full growth potential.
China's GDP accounted for only two percent of the world's total in 1978. Now, it represents almost 15 percent of the global economy.
An aerial night view of Shanghai, east China, October 4, 2015. /Xinhua Photo
An aerial night view of Shanghai, east China, October 4, 2015. /Xinhua Photo
The results
China has not only become the world's factory, but also lifted over 700 million rural residents out of poverty as the economy expanded.
The country's economic success has benefited greatly from a large population with relatively low labor costs and a huge market, but also an efficient and strong central government.
As China grows richer, it has embarked on a new mission: To optimize its industrial structure and foster green and innovation-driven growth engines.
Economists generally attribute much of China's rapid economic growth to two main factors: large-scale capital investment (financed by large domestic savings and foreign investment) and rapid productivity growth. These two factors appear to have gone together hand in hand.
China has not only become the world's factory, but also lifted over 700 million rural residents out of poverty as the economy expanded. The country's economic success has benefited greatly from a large population with relatively low labor costs and a huge market, but also an efficient and strong central government.
Driven by industrial production and manufacturing exports, China's GDP is actually now the largest in terms of purchasing power parity (PPP) equivalence.
Since China began to open up and reform its economy in 1978, GDP growth has averaged over 9 percent a year, and more than 800 million people have lifted themselves out of poverty. There have also been significant improvements in access to health, education, and other services over the same period.
It is the world's second largest economy by nominal GDP, behind the United States, and the world's largest economy since 2016 when measured by purchasing power parity (PPP). Due to a volatile currency exchange rate, China's GDP as measured in dollars fluctuates sharply.
Introduction: My name is Tish Haag, I am a excited, delightful, curious, beautiful, agreeable, enchanting, fancy person who loves writing and wants to share my knowledge and understanding with you.
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