Why China is no Longer Relying on Exports for Growth

Why China is no Longer Relying on Exports for Growth













Why China is no Longer Relying on Exports for Growth


The growth of rapid foreign trade has played critical roles in the growth of the Chinese economy in the past three decades, but the conventional view in China now is that the country’s growth is as a result of internally motivated factors. The Chinese seem to focus on other ways of generating revenue other than depending on the exportation of goods and services. The country may have to identify alternatives to making the economy thrive, and must make changes in the economic, political, and social spheres to have a stable state in the future.

Why China can no Longer Depend on Exports to build its Economy

One of the reasons that make China consider other ways of creating its economy rather than depending on the exportation of goods and services is that the exported items from the country are of low additional value, require intense labor, and result in immense pollution. The state in its efforts to overcome the challenges that come with exportation seems to be paying attention to other areas that are driven locally. Secondly, The belief that the products of China are relatively cheaper exposes the country to anti-dumping measures that may be harmful to the country’s exportation activities. The other reason that makes it possible for China to drive its economy without relying on exports is that the state has a significant number of middle-class citizens which is capable of stimulating and satisfying the domestic requirement. Finally, the fourth reason why China is considering other ways of sustaining its economy is that the Western nations and America seem to have their challenges which make it difficult to develop a stable economy and China’s inclusion into such activities will only generate more problems. The Economist (2010) reports about Jonathan Mitchell (a British software developer) cannot pay his debts due to the severe economic times in the country. The reporter proceeds to mention that Mitchell is one of the millions of British consumers across the developed western nations who find it difficult to settle their debts an indication that the livelihood in the other countries may not be very stable to support the economy of other countries such as China that would require so much support and investment.

The New Growth Engines for China

China must identify alternative forms of supporting its economy now that it is shifting from being reliant on exportation. The country may opt to invest in its readily available labor to improve the nation’s rate of production. Even though putting much investment on workers who specialize in different categories may lead to expenditure imbalance that Knight and Wang (2011) describe to be a scenario where the investment is high compared to the rate of consumption, the country will be able to save enough for the future. Apart from utilizing the available human resource, China’s new growth engine may lie in investing in different sectors. Knight and Wang (2011) mention that investing in various areas may change the current GDP from 30% to 40% by 2020 and indication that the form of making the country grow is effective. The Chinese, however, are free to identify other ways through which the economy can advance.

The Economic, Political, and Social Reforms that must take Place to Sustain Economic Growth

The Chinese must engage in rapid reforms that would transform the future economic growth. First, other than investing much money in the industrial sector, the government should explore other avenues that may generate enough income to sustain the country’s future economy. The government, for example, may decide to venture into agricultural practice, particularly in the interior regions where there is enough land to conduct agriculture. The government may also choose to put more focus the tourism sector, and mining that act as reliable generators of income in other nations whose economies are doing well (Lam, Liu & Schipke, 2015). It is encouraging that the labor market is holding up well, but still there is need to implement some reformations that would improve job availability. The government should also continue to increase the average wages to make them grow in tandem with the nominal GDP to ensure that the rural-urban income gap reduces.

The Chinese must also implement some changes in the political structure to achieve a stable economy in future. The fundamental change that must take place is that the government should become less restrictive in its trading and economic policies to allow citizens the opportunity to engage in a wide range of activities including enjoying the privileges that come with participating in the free market (Lam, Liu & Schipke, 2015). The government should also develop effective regulations that would determine how the tax collection process takes place to maintain a steady income of revenue that would support the already started and the future projects.

Finally, the government and other relevant authorities need to enforce some changes in the social structure to achieve growth and development in the future. The concerned bodies, for example, should expand credit services to low-income earners to allow the group to participate in economic activities that would uplift the welfare of the citizens in this area (Lam, Liu & Schipke, 2015). Other than investing in the credit sector, the government should put stress on the health insurance coverage of all citizens as it happens with the affordable care act of 2010 that allows as many Americans as possible to access health services whether they belong to the middle class or lower positions. Improving the health coverage for the citizens will improve the country’s future economic state because the growth and development of a nation depend on the people’s good health. It may also be important to cater for the population’s needs now that the government allows citizens to give birth to utmost two children (The Economist, 2015), a condition that may further escalate the population. Finally, the future growth of the Chinese economy will depend on how the government takes care of the community that is almost 14 billion. Other than issuing health coverage, it would be essential to put up proper housing facilities in the modern areas where the population is rapidly increasing, and it may also be necessary to improve other amenities such as the sewer system and the environmental conditions.


The Chinese economy seems to be growing, but the growth will be more significant through the implementation of specific changes. The country is now moving away from being an export-dependent nation to one that relies on its labor to produce enough capital that sustains the economy. Apart from breaking away from overreliance on exports, the country seems to be focusing on investment which will make China stable for many years to come. Finally, the nation must make changes in the economic, political, and social aspects to record considerable growth and development.











Knight, J., & Wang, W. (2011). China’s macroeconomic imbalances: Causes and consequences. The World Economy, 1476-1506.

Lam, R., Liu, X., & Schipke, A. (2015). China’s labor market in the “new normal”. Washington, DC: International Monetary Fund.

The Economist. (2010). The morning after a $3 trillion consumer hangover. Retrieved from

The Economist. (2015). Shifting barriers. Retrieved from


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