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The Rise Of China Issues Behind The Success Economics Essay

“November 10, 2001 is the date that proved the success of China’s Economic Reform and Open-Door Policy, which was implemented by one of the world’s most renowned leaders – Deng Xiaoping, for the reason that China was finally admitted into the World Trade Organization at its 4th Ministerial Meeting in Doha, after 15 years of rough talks.” (Arlene 1) Today, China is one of the most influential countries in the world. Being a member of the World Trade Organization shows that China plays a decisive role in the world’s economy, and as Arlene states, it can be attributed to the success of China’s Economic Reform and Open-Door Policy. Since this policy was adopted in 1978, China’s economy was revived and it opened the “door” to the rest of the world, and eventually leads China to become a wealthy and powerful country. However, there are some negative effects occurred behind the successful policy in China. They include income inequality, corruption, environmental problems, and also cultural problems.

Background Information

During the Cultural Revolution (1966-76), many buildings and railways are destroyed by the Red Guards. Many people in China joined the Red Guards and the whole country was in disorder. Due to the disturbances of the Red Guards, millions of people died and the economy was almost collapsed as most economic activities stopped. After the end of the Cultural Revolution and the death of Mao Zedong, who was the chairman of the Communist Party of China and also the originator of the Cultural Revolution, Deng Xiaoping became the new leader of China and tried to revive the economy. As Deng realized that poverty was serious and most poor people were living in rural areas, the Economic Reform started to reform agriculture, and then adopted Open-Door Policy in the coastal cities such as Shanghai and Guangzhou.

Since the economic reform was adopted, China’s economy grew very fast. At the beginning of the reform, the Chinese Government established 4 coastal cities, which were Shenzhen, Zhuhai, Shantou, and Xiamen, as 4 special economic zones to start the reform and opening up. The Government employed the successful experience from The Four Asian Tigers (Hong Kong, South Korea, Singapore, and Taiwan) to develop these 4 cities. The Government remodeled these 4 cities as world trading centers and encouraged foreign or local business invested in the cities. The economies of these 4 cities expand rapidly. “After opening up its economy to the rest of the world in 1979, China has been able to double its gross domestic product (GDP) twice by 1994, with an average annual real growth rate of ten point five percent.” (Cong 4) This figure shows the effect of the economic reform that raised the economic growth greatly in the first 15 years. In 2008, China had overtaken Germany as the third-largest economy in the world. “In 2009, China posted strong GDP growth of 8.7% while other nations were eking out much smaller gains. China also overtook Germany last year as the world’s largest exporter.” (Chu 1) “”In 2010, Japan may fall to No. 3 behind China,” says Kiuchi, who expects Japan’s economy to grow less than 1% in 2010 compared with an estimated 10.5% growth in China.” (Chu 1) China is transformed from a weak country, whose economy was almost collapsed after the Cultural Revolution, to a powerful country, which is the world’s largest exporter and the third-largest economy in the world. These are the result of the economic reform planned by Deng Xiaoping.

In addition, Deng Xiaoping’s reform also changed the political system as well. Before the reform, China was under communism, which emphasized that everyone should be equal and shared the same resources in the society. Planned economy was a symbol of communism; everyone should get the resources planned by the Government. However, Deng’s reform gave up planned economy and changed it to market economy, which allowed the market to adjust different need of people.

Income Inequality

Although the Reform and Open-Door Policy succeeded to revitalize China’s economy, many problems appeared after the reform. One of the most serious problems is the income disparity in China. Although Deng started the reform in the rural areas earlier than in the urban cities, people in the cities earn much more than that in rural areas. The main reason was that people in coastal cities usually were educated, and the Open-Door Policy attracted foreign business and investment to develop the cities. As a result, the income gap between people in coastal cities and rural areas was enlarged and caused the seriousness of income inequality. To get rid of poverty, many people in the rural areas migrate to the coastal cities seeking for job opportunities. “The Gini Coefficient of inequality in household income, the most widely used summary measure of the degree of inequality used to show the degree of income inequality between different groups of households in the population and how inequality of incomes has been changing over a period of time, rose by seven percentage points, or by 1.0 percentage point per year, between 1988 and 1995.” (Carl 4) The Gini Coefficient of inequality can measure the inequality of a country accurately, and it also shows that income inequality in China is very serious.

Besides, income inequality caused an increase in crime rate as well. “There were 693,000 theft cases, up 17.1 percent, while robberies rose year on year by 8.6 percent with 74,000 incident recorded.” (Carl 14) It shows the seriousness of income disparity brought by the economic reform, and the possibility of being robbed was extremely high since the poverty problem was really serious. In fact, poverty problem was also related to corruption of Government officials.


Corruption is another serious problem after the reform. It seems like a common issue that it should occur in every country. Before the economic reform, however, corruption was not a problem in China because no one was able to get more, according to the idea of communism before the reform. During the reform, Deng suggested using market economy instead of central planned economy. It is true that market economy might be more suitable for the situation at that time, as planned economy was fixed and cannot apply to the real situation. However, the Chinese Government focused on the economic development, but did not have any policies to avoid corruption happened, and it is the fault of the Chinese Government. “A recent Carnegie Endowment report indicates that roughly 10 percent of government spending, contracts, and transactions is used as kickbacks, bribes, or is simply stolen.” (Tien 1) The figure shows that 10 percent of government spending was stolen; however, there were much more cases of corruption occurred underground.

The Change of the Culture

Besides income disparity and corruption, the culture of China is also affected by the reform. For instance, the attitude toward sex had changed after the reform. In the traditional society of China, premarital sex was impossible to happen. After the Reform and Open-Door Policy, people in China knew more about western culture and tried to learn from it. At the same time, economies in urban cities expand quickly and lots of people from rural areas migrate to the cities. Most of them were uneducated and had a low awareness of AIDS. Therefore, HIV infections remain a high level in the last two decades. “In 2003, there were 850000 people living with HIV/AIDS.” (“China”)

Also, the idea of democracy was spread to China when people know more about Western culture. Tiananmen Square Incident provides an example. In 1989, students were dissatisfied that corruption was serious in the society and strived for democracy, even though the economic reform was successful to revive the economy. Thousands of students were absented from the class and stayed in Tiananmen Square in Beijing and shouted for democracy. At the end, most of them were put down. Tiananmen Square Incident shows that it was not enough for the Chinese Government solely focusing on the economy in China, and the Government had to consider many other social problems caused by the reform.

Environmental Problems

The environmental problem in China is very serious that many environmental groups in the world condemn the Chinese Government and Chinese enterprises. In fact, this serious problem is due to the rapid economic growth made by the economic reform. Before the economic reform, most people in China focused on agriculture. Moreover, many factories were established and coal mines are exploited during the economic reform. In addition, as the standard of living was improved, people preferred to buy cars instead of bicycles, which they were used to ride. The number of factories and cars on the roads increased exponentially and the emission of carbon dioxide from factories and cars caused serious air pollution. Thus, pollution is the most serious environmental problem in China. Besides, water pollution is also noticeable. “There is a total of 459 cancer villages across 29 of 31 China’s provincial units. In most cases, there is a single cancer village in a country, while the number of cancer villages in one township can reach 21.” (Liu 2) Different pollutions, such as air pollution, water pollution, and land pollution occurred throughout the country. “Five of the world’s ten most polluted cities are in China and the pollutant level is 2-5 times above the World Health Organization’s guidelines for safe exposure.” (Vaclav Smil201) This unacceptable figure shows the seriousness of pollution in China.

Deforestation is another one of the environmental problems in China. To help the economic growth, the Chinese Government had to build more basic infrastructure, such as roads and railways. The raw materials were come from forests, and excessive exploitation caused deforestation and some parts of land become desert eventually. “China’s State Forestry Administration mentioned in 1999 that desert increases on average of 10400sq km per year in China.” (“China Statistical Yearbook”)


As mentioned above, the reform caused some major problems such as income disparity and corruption, and they could become worse if the Chinese Government ignores the negative effects. Although expanding the economy is important for a developing country, the Chinese Government should put more efforts to solve the poverty problem. As the economy expands, rich people could become richer; at the same time, the income gap could also become larger. Thus, the Government should design some policies to help people who are living below poverty line. “In 2003, there was 10 percent of population living below poverty line.” (“China”) Besides, the Government has to make policies to reduce the emission of carbon dioxide from factories. “China has joined The Methane to Markets Partnership, which is an international organization formed by 16 countries. The group’s goal is to reduce methane emission by 2015 by 50 million metric tons of carbon equivalents, or recovery of 500 billion cubic feet of natural gas.” (“Canada joins MMP”) In addition, education is fundamental to solve these problems. If all people, including those in rural areas, are educated, people’s awareness of AIDS will be raised and lower the number of people living with HIV/AIDS in China. For the corruption problem, the Chinese Government had taken actions trying to combat against corruption in recent years. “In the continuing efforts against corruption, on January 9, 2007 President Hu Jintao laid out his steps in an anti-corruption campaign to the top disciplinary body of the Communist Party of China.” (Tien 2)


It is no doubt about the success of the reform brought by the former President Deng Xiaoping. The reform revitalized the poor economy in 1970s, and established a comprehensive program for the economic development in the future. While the economy is expanding, there must be some problems appear. Income inequality and environmental problems are due to the reform directly. Also, the traditional culture is affected because of the reform. For the corruption problem, the Chinese Government focused on developing the country, but failed to stem underground corruption happened. All in all, the economic reform helps China become a wealthy and powerful country, but also brings negative social problems or environmental problems. In fact, there are always some costs behind success, and whether it is worth should be considered deeply by the government.

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