Reforms Addressing Economic Imbalances Essay - 1554 Words

Reforms: addressing economic imbalances As noted, the growth model is facing its limits, with growth slowing and vulnerabilities rising, successful development in the past relied on high investment, relatively inexpensive labor, productivity- enhancing foreign direct investment, and strong global demand. Along the way, the government played an important role in the allocation of resources, both through state-owned enterprises and local governments, especially in infrastructure. The moderation of China s growth has been structural, in part reflecting natural convergence as income per capita reached middle-income levels. At the same time, slower growth reflects waning dividends from previous productivity-boosting reforms, such as the state-owned enterprise reform at the end of the 1990s and the accession to the World Trade organization in 2001. Already prior to the global financial crisis, China recognized the limits of its growth model and the growing imbalances inherent in it. Former Premier Wen Jiabao in March 2007 called for reforms to address unsteady, unbalanced, uncoordinated, and unsustainable development†. As the global financial crisis unfolded, reforms were largely put on hold, and the country embarked on massive economic stimulus amounting to 11 percent of GDP, mostly for infrastructure and social housing, this stabilized domestic demand and gave a welcome shot in the arm for the global economy. But it also led to a further build-up in imbalancesShow MoreRelatedWorld Hunger Essay506 Words   |  3 Pagesright. Although still far from being generally accepted, significant progress is being made. Community and nongovernmental organizations are implementing successful programs against hunger. A number of governments have adopted national policies addressing hunger, in some cases, especially in East Asia, cutting malnutrition in half in a single decade. 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