Import From China Business
A practical guide for starting a small business
2010-
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What’s New!
China Imports
February 2012
Costume Jewelry
December 2011
Bamboo Towels
November
2011
Bamboo Flooring
November 2011
China Economy
November 2011
Ivory
October 2011
Wigs
October
2011
Drop Ship
September 2011
Photography Equipment
September 2011
Medical Supplies
September
2011
Ginseng
August 2011
Acupuncture
August 2011
Chinese Tea
August 2011
Chinese Herbs
August
2011
Trade Leads
August 2011
China Adoption
July 2011
China Economy
China Economy Becomes World Class
China Economy has been a hot topic lately amongst politicians, economists, and business executives around the world. Many are in awe of the growth of the China economy over the last thirty years. There are three driving forces behind the China Economy; the same ones which drove Japan and the Four Dragons (Hong Kong, Taiwan, South Korea, Singapore) to world economic powers after the second world war and from the 1960's to the 1980's respectively.
Photo Credits: HongKong-
China Economy -
China Economy is fueled by high quality human capital, functioning market institutions and an early stage of economic development.
- Human Capital
Human Capital is the ability of the Chinese people which involves the skill and work ethic of the labor force and the ingenuity and brilliance of the entrepreneurs. The human capital quality is part of the country's culture and makeup. Much of this is transferred from generation to generation through family education. Countries with world class economic power such as Japan, Germany, South Korea, the United States and China all have high quality human capital. - Functioning Market Institutions
The second driving force behind the China Economy is a functional set of market institutions. Market institutions began to develop in China in 1978. The Chinese government went through economic reform transforming the China Economy from a planned economy to a market economy. Market institutions provided motivation and rewards for hard work. Resources are also channeled to the right areas through supply and demand. - Early Stage of Economic Development
The third driving factor behind the China economy is the technology gap between China and the most advanced nations. During China's early stage of economic development, the technology gap is large. This provides China with an opportunity to catch up quickly through the adaptation of advanced technologies. As the China Economy matures, the technology gap will narrow and the growth rate will decrease. However, it is anticipated that the China Economy will continue to grow more than 8% for the next 10 to 15 years.
8 Impacts of the China Economy
The growth of the China economy in the last 20 years has brought significant changes to the Chinese people.
- Increase in Income of Chinese Families
The income of the Chinese in urban centers increased by 9 fold from 1978 to 2000’s. Similarly, families in the countryside saw their income increased by 7 fold. Along with increases in income, there was also a marked increase in home ownership. By the mid 2000's, 89% of the Chinese had owned their own homes. It is just another indication of China's growing wealth. - Decrease in the Engel Coefficient
The Engel Coefficient measures the expenditure on food as a proportion of the total family expenditure. This coefficient dropped from 57% in 1981 to 37% in 2005 for the urban Chinese. The Chinese has more disposable income to spend on non-essential items. - Upgrading Consumer Goods
When consumers become wealthy, there is a constant desire to upgrade their consumer goods. In the 1990's, wealth according to the Chinese is demonstrated by the ownership of a number of materialistic items such as the automobile, cell phone, personal computer and air conditioner. Today it is marked by the ownership and upgrading of items such as housing, cars, electronics, education spending, vacationing, and services. All these categories have increased by the mid 2000's. - Tourism and Vacationing
These categories are now in high growth as the China Economy delivers more wealth to the Chinese. The domestic tourism market used to be marketed to foreigners but it is an industry that is now driven by the increase of the Chinese income.
- Spending on Credit
Consumption on credit is popular in categories such as home decoration, education, and cars. Gone are the days of only spending on what you have earned. - Enthusiastically Spends in Health
As evidence of improvements in health investment, the life expectancy of the Chinese has significantly increased. It was only 35 years old half a century ago but this number has increase to 72 years by the mid 200's. Improvements in healthcare and physical fitness are major contributors. - Increase in Education Spend
The Chinese is well aware of an education as a means of moving out of poverty. The percentage of the Chinese population earning college degrees has increased during the last 20 years. Chinese students studying overseas have increased by 40% in recent years. Illiteracy rates have been dropping accordingly. - Division of Social Strata
The China Economy has begun to bring division to China's social strata. Farm workers as a class are shrinking as the working population shifts to other trades. It also has brought about the strata of high and medium income in the Chinese society.
The result of all of these impacts is due to a booming economy which is full of opportunities for the China exports and Import from China entrepreneurs from around the world.
