Problems In China`S Economy Essays - Economy Of China,

Problems In China`S Economy Problems In Chinas Economy And Their Solutions Today, at the turn of the century, the Peoples Republic of China who has a history of over 5000 years is facing a very important choice. After the revolution of 1949,new China has devoted himself to improving his peoples living condition, and developing the economy. Although we encountered some difficulties on the way of development, we still make a rapid progress in many fields, such as, we have already solve the problems of how to feed a forth of the world population which seems impossible and difficult to the developed countries, our country has already become an important power in the world not only politically but also economically. After we adopted the policy of reform and opening to the world in the year of 1978, our economy grows steadily and rapidly than ever. And our economy in recent 20 years has become a wonder in the history of the world economy. However, with the undergoing reform, we now face some problems. First, after so many years fear of inflation, our economy has an inclination of deflation. Second, for the agreement with the United States on entry in World Trade Organization (W.T.O.), our State Own Enterprises (S.O.E.) face many problems. Third, we still have some troubles in our policies. In addition, the unstable political environment (such as peaceful evolution from socialism back to capitalism, the threats of imperialism and other enemy countries) force us to develop our national power as fast as we can. As we all know, everything has its own shortcomings, but those shortcomings are not important, the important thing is trying to solve the problems you have. This comes out a choice, to solve problems and have a better life or to keep everything going on like it is. We must take our responsibility to make a choice like the former one, for this choice will have a great effect on our country and peoples in the near future. Now let us talk about the problems faced in front of us and try to figure out their solutions. It is known that in recent years, while Chinas GNP (Gross National Product) grows fast, its economy always suffered with inflation. However, from 1996, our economy encountered the problem that never expects deflation. This tendency of deflation actually came after the financial crisis in Asia. Our export decreased abruptly and considerably, our consumers purchase power reduced suddenly, and the supply apparently surpassed the demand. Why does it change so quickly? Nowadays our economy is under transformation. During the transformation period, there have many changes taking place. The source of peoples income has changed. First, in order to increase employees enthusiasm for work, the portion of allowance, bonus has increased a lot. The portion in 1997 is 37.93%, compared with 2.79% in 1978. For the income of retired workers is determined by their standard wages, when the portion of standard wages decreased, the income of retired people reduced relatively. Second, compared with youth, old people should pay more for health and medical purposes, which makes income of retired people seems relatively low. The other change is retirement period, in which income is relatively lower, has been extended. This has two main causes, too. First, the average lifespan of Chinese extends for the development of public health services. It is estimated that in 2000 the average life expectancy of female and male of 60 years old now will be 85 and 83 years old respectively. Although the retired age has not been changed, the extension of life means the extension of retirement period. Second, in order to increase economic benefits, many employees are forced to retire before the retirement age. In fact, this means the extension of retirement period, too. For the relatively reduction of retired workers income and the extension of retirement period, more and more people incline to save their money for future use. As they think they must save much as they can to solve future problems in ca se they do not have enough money at that time. Furthermore, a recent survey in Shanghai shows that about 70% families will use their savings for their own living after retirement. As we