Foreign trade and economic growth : a case of China in its open and reform era

Abstract

While examining the great changes China has undergone since 1978, compared to the pre-reform situation, and placing China at the center of the whole picture of Asia and the world, the study tries to discover all the contributions which have brought about the changes, and to see how and under what conditions, foreign trade has functioned as an engine of growth. The improvement of the overall social environment resulted from the open and reform policy instituted in 1978. The reforms created the prerequisites for the expansion of trade. The emphasis is laid on China's technological transformation through both foreign investment and direct import of advanced technology which has efficiently served as the expeditor of productivity and exports of Chinese commodities. However, foreign trade is by no means the panacea to all of China's economic ills. Its function as an engine is restrained by the productivity, the ultimate motivating force of economic growth, as well as the surrounding factors which affect such motivating forces. Constraints exist in China's state owned enterprises, the backbone of China's economy, low trading efficiency as well the social concerns about human capital, R&D, etc., are all discussed as they form as crucial factors for China's sustainable foreign trade expansion, further economic growth and overall social progress. (Abstract shortened by UMI.)