Role of Government in Economy Essay Example | Topics and Well Written Essays - 2250 words

Role of Government in Economy - Essay Example This was done for the protection of the interests of the investors and capitalists of that time because the newly born country was not in a position to support its economy on its own and the confidence of the investors had to be built up. The strategy was successful and was the most significant factor behind the rapid economic growth of the country in the immediate years after the War of Independence. However such a strategy could not have lasted forever and therefore during the later part of the 19th century farmer and labour movements started to emerge in different parts of the country in protesting about the oppressive behaviors of the investors and capitalists. Under these circumstances, government had to change its strategy and with the emergence of the first labor union in 1820’s the government started intervening in the economic affairs of the country. The emergence and establishment of labor unions in the country was a significant factor in bringing about a revolution in the economic life of the country (Danny). These changing conditions resulted in the formulation of an educated middle class in the country which forced the government to introduce regulations in the business practices in order to ensure the provision of rights to the employees, establishment of free market economy and to ensure quality control. The Sherman Antitrust Act which ensured the presence of competition in the market by barring large enterprises from establishing a monoply in a single industry and the Interstate Commerce Act, a regulatory mechanism for the railroad industry which required the railroad fares to be kept within a reasonable range, are two of the very first pieces of legilation completed by the congress regarding the economy of the country. These acts were enforced as laws during the years of the progressive Republican President Theodore Roosevelt (1901-1909). President Roosevelt was of the opinion that the rapid economic progress of the country has made it m andatory for the government to introduce regulatory mechanisms regarding commerce, industry, finance, planning and economics. Therefore a number of regulatory bodies and institutions were formed during Roosevelt’s and President Wilson’s years in the office. These include Federal Trade Commission, Food and Drug Administration and Interstate Commerce Commission. In response to the Great Depression, the government of President Franklin D. Roosevelt came up with the idea of three Rs; Relief, Recovery and Reform. This strategy required the government to directly involve in the economy of the country and thus during the implementation of the New Deal, an era of rapid economic reforms in the country, government’s involvement in the economy of the country reached its peak (Fishback). The idea of public welfare was practically adopted by the government in the New Deal era and many important laws which govern the economy of the country today were formulated during this ti me. The government started patronizing labor unions and the standards for minimum salaries and fixed working hours were established during this tim

Speech Outline Essay Example for Free

Speech Outline Essay When responding to a medical emergency you should take three main stepssurvey the scene, contact emergency medical services, and start CPR. Method of Organization: Chronological Introduction (Begin your presentation with the statement beside Roman numeral I) IFirst Sentence: Imagine youre at home eating a holiday dinner with your family and your uncle begins to suffer a heart attack. Would you know how to handle the situation by administering cardiopulmonary resuscitation, better know as CPR? IIISpecific Purpose: As a lifeguard, I have been certified in CPR for the past four years and Ill teach you what to do when responding to a medical emergency. . IVThesis: Tonight I will explain the lifesaving process of surveying an emergency, contacting emergency medical services, and administering CPR. Body I. According to the American Red Cross, the first step in an emergency is to survey the scene. A. The most important thing in administering First Aid is to make sure you and the victim are safe B. If it is safe to proceed and the victim is not moving, gently shake the victim and ask if she or he is O. K. C. Then, call for help. II. The second step in an emergency is to contact an emergency medical service (EMS). A. There are several ways to contact an EMS. One way is to call 911 If there is no 911 service in your area, call the police or hospital directly. You can also call the operator, who will contact the police or hospital for you. B. Designate one person around you to call EMS. C. If there is no one around, you must call EMS yourself III. The third step in an emergency is to administer CPR. A. Position the victim. Move the victim into the correct position, keeping the persons body as stable as possible. Position yourself next to the victims shoulders. B. Check the ABCs Opens the airway. Check for breathing a. Look, listen, and feel for the victims breath. b. If the victim is not breathing, give him or her two quick breaths right away. Check the pulse C. If there is no pulse, begin chest compressions immediately. Position your hands on the victims chest. Straighten your arms and lock your elbows so your shoulders are directly over your hands Compress the chest of victim 1-1/2 to 2 a. Compress the chest fifteen times while counting out loud. Compress for one second each time. D. Repeat the cycles of breathing and chest compression four times. After the fourth cycle, check the victims pulse. If there is still no pulse, resume the cycles of breathing and chest compression until the victim starts to breath or until medical professionals arrive. Conclusion IThis short speech has shown you the importance of surveying the scene of an emergency, contacting an emergency medical service, and starting CPR. IIBecause of your knowledge of these three steps, you can be the vital link in an emergency such as that described in my introduction and you can help save a life.

Creativity and Innovation to Further Developing Countries

Creativity and Innovation to Further Developing Countries The keyword to be an successful country is develop two important abilities that will help you think in a different and intelligent way to develop your ideas and your beliefs. The purpose of this research is to develop the creativity and innovation in developing countries by increasing the systems education in three different ways. Furthermore, this paper discuss about the importance of develop creativity and innovation for the future of countries. Creativity is define like the ideas that come up to your mind to follow anything that you want to do and innovation is the process to became your ideas or inventions in something that help the people or the environment. Finally, the main idea of this paper is to find the best solutions to solve the problem of creativity and innovation by improving the traditional model of system education. Keywords: creativity, innovation, system education, develop. There are so many countries in the world, and this countries are classifieds according to how much developed they are. First of all, we have countries that are developed a lot of because they produces many things like technology, weapons, food, raw material (wood, iron, cotton, crude oil, etc) for the others that doesnÂÂ ´t have this advantages. Therefore, these develop countries are in the top, but how could they develop more than the others? the answer is very simple. These develop countries made a change in their system education by improving so many things that will help students to be prepared in the future because they know that students are the 100% of their future. As a result, the best solution to improve the road of being a develop country in the world is focused in creativity and innovation of each people could have, but how we can improve this skills? We can improve these skills by following the next steps: First, schools should increase hours of extracurricular clas ses. Secondly, students must interact with the environment. Finally, using technology in the process of learning-teaching can help to everyone with innovate ideas. Schools should increase hours of extracurricular classes Currently, schools are an important parts of our lives because there we learn how to front any problem that we could have, and also we learn many skills that help us to develop in the future. But what is wrong with schools nowadays? the problem is that they are killing the creativity and innovation by obligating us to think in the way that they want. The recently model of system education have one purposed, and it is to became students in university professors. They have in mind that if you made less mistakes, you will be a perfect person. So this means, education system just are focused in science subjects such as math, chemistry and physics, and this is a big problem because each person believe that you will be successful if you have lot of science degrees. But no one knows that they could be better if they develop creativity and the capacity of innovate (Robbinson, 2006). Of course we can develop creativity in schools by increasing hours of extracurricular classes because in that classes we learn how to be an artist, and when you said artist everyone thinks in creativity. Scientists says that every person in the world develop the 80% of their brain when they are in the childhood, so what they need? They need classes about science, but they also need extracurricular classes like music or dance because in that classes they will express their creativity in an easily way. For example, a little girl called Gillian was accused that she has a learning disorder because she canÂÂ ´t get focus while she was receiving classes. So her mom took her to the doctor because she was worried, but the doctor was talking with Gillian alone, and while they were talking Gillian was dancing, So he understand that she didnt have any disorder learning. Then he goes to Gillians mom and he said that Gillian doesnÂÂ ´t have problem, he explain that her daughter is a dancer, she needs to move to think. After, GillianÂÂ ´s mom understand that her daughter need to go to learn dance and finally Gilliam became in a professional choreographer and she made important works such as Cats and Phantom of the Opera (Robbinson, 2006). In a brief, people lost their creativity because in schools they just learn mechanically and they donÂÂ ´t learn how to develop their ideas or how to express their opinions. Students must interact with the environment Everyone could become in creativity people if they learn by themselves. Many people in the world are autodidact people because they like o learn by their own methodology. This is an excellent way to became in a creativity people because you find out or sometimes you create your ways to make easily studies. A big example could be scientist because they are always looking for new things, so what they need is a lot of creativity and innovative ideas to get what they want. However, people says that scientist are not creativity people because they use statistics and data, so for the people this is not creative is just like a lot of information (Ossola, 2014). The main idea is to add the option forÂÂ   students that can interact with their environment to understand better and increase their creativity. For example, if students are learning about the nature, they should go outside to the forest and they will be able to learn how everything works in the environment, and also this is an interesting and funny way to learn because is not boring and you will be entertaining. Moreover, you can find another advantage about learn interacting with the environment because when you are outside you will found many information just looking, you dont need search it on the internet or books, is an easily way to obtain real and good information about something. Using technology in learning-teaching process Nowadays, technology is the best sources that humans could created. Technology have many uses in all the world. We could find technology everywhere like in medicine, weapons and even in our houses. Technology is everything and also is an important tool for education because we could use it for teach and also learn in schools or colleges. Furthermore, each school has technology to support the knowledge of students, but while more technology have schools, they will be considerate better than the others. The last step to improve developing countries into develop one is improving all the technology from schools as many as they can. For example, people could use Duolingo platform that teaches language through gaming (Segal, 2016) to learn in a funny way and creative way. Also technology is an excellent way to teach students because they like new things, and they want to discover things. So technology is like a motivated tool that make students want to learn by themselves. In summary, we could improve any developing country by increasing important skills such as creativity and innovation because creativity is process that you develop to make sense any ideas that you have in mind and innovation is the success of created any idea. So there are many steps to develop your abilities like the importance of schools should increase the hours of classes that help you develop your ideas and also it help you to make strongly opinions about any topic. References Ossola, A. (2014). Scientist Are More Creative Than You Might Imagine. The Atlantic , np. Robbinson, S. K. (nd de February de 2006). TED. Recuperado el 15 de February de 2017, de TED: https://www.ted.com/talks/ken_robinson_says_schools_kill_creativity?language=en Segal, S. (2016). The case for disruption in Latin AmericaÂÂ ´s classrooms. Usa Published , np.

Intangible Justice is in the Soul Essay -- Essays Papers

Intangible Justice is in the Soul Plato’s Republic, although officially divided into ten books, can be separated into two very distinct sections. The first section, roughly spanning Books I through IV, contains a rather tangible investigation of justice in practice. Namely, the section considers what acts or occurrences are just, either in a city or in a man. The second section, beginning around Book V and continuing through the end of the dialogue, deals with the much more abstract issue of justice in a soul. The backbone of this section is the Allegory of the Cave, and the establishment of the philosopher. Within these discussions, a new concept of justice is revealed which proves to be the most profound in the dialogue, and comes closest to answering the question of Socrates’ success in convincing Glaucon and Adeimantus that it pays to be just. The discussion surrounding the Allegory of the Cave, known well independently of the Republic, begins as an attempt by Socrates to â€Å"make an image of our nature in its education and want of education.† (Plato, Republic[1], 514a[2]). Here, Socrates begins to emphasize the connection between the nature of human education and justice—a theme that will become a central element in the definition of justice that the Allegory produces. The Allegory itself begins with a description of people raised in a dark cave who can see only the shadows that a fire behind them projects onto the wall they are perpetually facing. The images the people see, the â€Å"puppets† (514b), are all they have ever known, and are therefore thought of as reality, and not a filtered version void of details. Socrates, in fact, calls the people â€Å"prisoners† (514a). Socrates then turns the tables and, perhaps signal... ...mention of the benefits of keeping one’s soul free of chaos, Socrates shies away from actually addressing whether it pays or not to be just. The very fact that the second unofficial section of the Republic, which proves to be more dominant than the first, deals with justice in the soul furthers this phenomenon. In the end, justice is in a person’s soul and has little to no connection with the tangible world, and therefore cannot provide tangible benefits to following or disobeying it. This is the real message of the Republic. -------------------------------------------------------------------------------- [1] Plato. Republic. Trans. Allan Bloom. Basic Books, 1968. [2] Stephanus numbers and letters used to cite all works of Plato. They will be used to cite all further quotes from Plato’s Republic. [3] This is in fact the definition of an allegory.

Race Discrimination in the Workforce Essay

When returning back to Wanzek’s after layoff I had noticed in my paycheck I had lost $2 an hour in pay when I had received a $2 raise and a gift certificate before layoff. I did report the loss of wage to Tina Harrison in Human Resources and she would e-mail Phyllis at Headquarters. Anthony Butler has called numerous times and no response. On November 6, 2012 a text was also sent to Phyllis by Anthony Butler in regards to his loss of pay. Phyllis also has not responded. II. At the Trenton job site on or about October 10, 2012 Anthony Butler (herein Butler) went to the Safety Manager â€Å"Larry† to get a pair of gloves prior to work that morning. Butler was informed by Larry, â€Å"That he was not supplying him gloves every week because it was not his job†. At that time Butler informed Larry that his hands are too big for the gloves and his were tore. On or about October 16, 2012 Butler again went to Larry for work gloves because the two pairs he had that day were wet and his hands were freezing. Larry stated, â€Å"He was not giving them to me and that I needed to take them home and dry them†. Butler informed Larry it was raining out and he needed gloves. Employees from Butler’s crew went to Larry for gloves and received them with no hassles. Butler never did receive any gloves and yet had to continue to perform his job. On October 24, 2012 Butler again went to Larry to get insolated gloves to go inside his work gloves because his were torn and at that time Larry refused to give Butler the insulated gloves and instead gave him water gloves and it was not even raining. At that point Butler went to Ralph Hunt (herein Hunt) his foreman and explained to him what Larry gave him instead of the proper work equipment needed to perform his job duties. Hunt took Butler to the Safety Office and confronted Larry to why his best helper meaning Butler could not have a pair of insulated gloves. Larry said, â€Å"what happened to the gloves I fricken gave you last week†? Hunt at that point told Larry the gloves did not cost more than twenty (20) cents per pair and at that point Butler received a pair of gloves. After these violations Butler was transferred to another jobsite. Basin Job Site III. On or about November 7, 2012 Butler came back from lunch to work in the Fabrication Area when an employee nick named Bommer asked Butler if he was working him to hard. Butler replied â€Å"no, it’s a slow day†. Bommer replied, â€Å"I will work the hell out of you Nigger†. After Bommer called Butler a â€Å"Nigger† he then replied, â€Å"That’s just a joke†. IV. On or about November 14, 2012 while working with Civil, Butler was shoveling dirt and sand and moving warming blankets with another employee. The employee left and Butler was moving the warming blankets by himself when he asked Brandon who is the foreman of Civil, why are his workers standing by the break room watching him work. Brandon did not reply. That went on the entire day the others employees did not work they just watched Butler work. V. On or about November 19, 2012 Butler was working with Bommer ad another employee nick named Zeek. Bommer had dumped a load of dirt in the wrong spot which he had been doing all day. Zeek replied, â€Å"You did it again Bommer†. Zeek looked at Butler and said, â€Å"Get a shovel†. Butler replied to Zeek that he already had the rake and that is what he has been using all day to spread the dirt†. Zeek said, â€Å"What are you just going to stand there and watch me dig†? Bommer was just standing there when Butler said, â€Å"don’t be mad at me because he dumped a load in the wrong area and that you need to make him help also†. That’s when Mark Corbell the supervisor over piping stated, â€Å"You need to back the fuck up†! At that point I walked away to clear my head and then started back working. VI. On November 19, 2012 Butler came into the man camp and turned ESPN on to watch the football game. Wade an employee and also roommate walked into the house mumbling under his breath about Butler having the TV on football. Butler spoke, â€Å"hello Wade† and Wade ignored him. At that point Wade told Kyle Olson (herein Olson) another employee and roommate, â€Å"Let’s go to the bar†. They left the house and came back approximately 1 am drunk, slamming doors, talking loud and making it obvious that they’re intention was to wake me up so I would come out of my room and start a confrontation. This went on for almost 45 minutes. I stayed in my room and couldn’t go back to sleep the rest of the night. In the morning Wade slammed the door so hard Butler thought it broke the window because Butler had made previous complaints about Wade slamming the doors every morning to Wade and Olson. Several of other incidents not mentioned at the present time will eventually be brought to light by Butler after the EEOC investigation has been completed. RULE I. As cited in the Employee Safety Handbook given to employees of Wanzek’s states verbatim on pg. ii; Equal Opportunity States: The Company is an Equal Opportunity Employer and encourages women, minorities, veterans and the disabled to apply. We recruit, hire and promote all job classifications based solely upon the personal qualifications of the individual. All employees are treated equally with respect to compensation and opportunities for advancement. The Equal Pay Act of 1963 (EPA) This law makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. II. As cited in the Employee Safety Handbook given to employees of Wanzek’s states verbatim on pg. 24; Corporate Policy States: Gloves are required for all work performed in the field. Each employee must be able to select the right kind of glove for the task. III. Race discrimination involves treating someone (an applicant or employee) unfavorably because he/she is of a certain race or because of personal characteristics associated with race (such as hair texture, skin color, or certain facial features). Color discrimination involves treating someone unfavorably because of skin color complexion. Race/color discrimination also can involve treating someone unfavorably because the person is married to (or associated with) a person of a certain race or color or because of a person’s connection with a race-based organization or group, or an organization or group that is generally associated with people of a certain color. Title VII of the Civil Rights Act of 1964 This law makes it illegal to discriminate against someone on the basis of race, color, religion, national origin, or sex. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires that employers reasonably accommodate applicants’ and employees’ sincerely held religious practices, unless doing so would impose an undue hardship on the operation of the employer’s business. Sections 501 and 505 of the Rehabilitation Act of 1973 This law makes it illegal to discriminate against a qualified person with a disability in the federal government. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires that employers reasonably accommodate the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless doing so would impose an undue hardship on the operation of the employer’s business. Title VII’s protections include: * Recruiting, Hiring, and Advancement Job requirements must be uniformly and consistently applied to persons of all races and colors. Even if a job requirement is applied consistently, if it is not important for job performance or business needs, the requirement may be found unlawful if it excludes persons of a certain racial group or color significantly more than others. Examples of potentially unlawful practices include: (1) soliciting applications only from sources in which all or most potential workers are of the same race or color; (2) requiring applicants to have a certain educational background that is not important for job performance or business needs; (3) testing applicants for knowledge, skills or abilities that are not important for job performance or business needs. Employers may legitimately need information about their employees or applicants race for affirmative action purposes and/or to track applicant flow. One way to obtain racial information and simultaneously guard against discriminatory selection is for employers to use separate forms or otherwise keep the information about an applicant’s race separate from the application. In that way, the employer can capture the information it needs but ensure that it is not used in the selection decision. Unless the information is for such a legitimate purpose, pre-employment questions about race can suggest that race will be used as a basis for making selection decisions. If the information is used in the selection decision and members of particular racial groups are excluded from employment, the inquiries can constitute evidence of discrimination. * Compensation and Other Employment Terms, Conditions, and Privileges Title VII prohibits discrimination in compensation and other terms, conditions, and privileges of employment. Thus, race or color discrimination may not be the basis for differences in pay or benefits, work assignments, performance evaluations, training, discipline or discharge, or any other area of employment. * Harassment Harassment on the basis of race and/or color violates Title VII. Ethnic slurs, racial â€Å"jokes,† offensive or derogatory comments, or other verbal or physical conduct based on an individual’s race/color constitutes unlawful harassment if the conduct creates an intimidating, hostile, or offensive working environment, or interferes with the individual’s work performance. * Retaliation Employees have a right to be free from retaliation for their opposition to discrimination or their participation in an EEOC proceeding by filing a charge, testifying, assisting, or otherwise participating in an agency proceeding. * Segregation and Classification of Employees Title VII is violated where minority employees are segregated by physically isolating them from other employees or from customer contact. Title VII also prohibits assigning primarily minorities to predominantly minority establishments or geographic areas. It is also illegal to exclude minorities from certain positions or to group or categorize employees or jobs so that certain jobs are generally held by minorities. II. Thru VI * A hostile work environment is an environment in which an employee, due to actions by co-workers or the employer, does not feel comfortable performing duties. In extremely hostile work environments, the employee may not feel comfortable even coming into the work facility. Inappropriate Comments or Actions * A work environment may be considered hostile when co-workers or an employer makes lewd jokes or touches inappropriately (sexual harassment), or when co-workers or an employer makes unwanted comments about an employee’s age, gender, race or physical or mental competence. Even if the majority of the co-workers have no problem with the actions or comments, a work environment can be considered hostile if the actions or comments clearly make an employee uncomfortable in the workplace. Conclusion Butler has filed a complaint with the EEOC in regards to the above violations and is also informing his employer Wanzek Construction Inc. of the mentioned violations above. Butler is afraid to come to work due to the hostile environment in his house by both roommates employed by Wanzek. Kyle Olson is very raciest and has had racial dealings outside of the workplace in the past with Butler’s fiancà ©Ã¢â‚¬â„¢s children’s father whom is also African American. Butler has been violated by not only crew members but also supervisors and higher ups. Butler feels he has finally been verbally and physically harassed to the point that a hostile environment has created by the employees of Wanzek Construction Inc. and their Contractors. Issues have been brought to some higher ups including staying in the house that has been selected to him. His wages were addressed to the proper authorities and again nothing has been done. At this time Butler is seeking the EEOC to address these violations and a complaint has been filed via telephone on November 26, 2012. Butler hopes that this complaint does not bring forth retaliation and more harassment for he cannot take anymore. Butler has kept his mouth shut through all the violations he has been victim to and he wants this discrimination to stop and wants to be treated fairly as all other employees. Other violations not mentioned are in regards to improper discipline given to other employees when creating an unsafe work place. Butler is not even able to buy food to refrigerate his food because the two employees have over taken the fridge and freezer to where Butler could never get food in the fridge. The training Butler should have had the opportunity to receive along with the other employees including operating testing of equipment that Butler operates. Wanzek a Mas Tec Company at P.O. Box 2019 Fargo, North Dakota 58107-2019 and also to MasTec Corporate Headquarters at 800 S. Douglas Road Coral Gables, Florida 33134

China Economy Essay

The rapid rise of China as a major economic power within a time span of about three decades is often described by analysts as one of the greatest economic success stories in modern times. From 1979 (when economic reforms began) to 2011, China’s real gross domestic product (GDP) grew at an average annual rate of nearly 10%. From 1980 to 2011, real GDP grew 19-fold in real terms, real per capita GDP increased 14-fold, and an estimated 500 million people were raised out of extreme poverty. China is now the world’s second-largest economy and some analysts predict it could become the largest within a few years. Yet, on a per capita basis, China remains a relatively poor country. China’s economic rise has led to a substantial increase in U. S. -China economic ties. According to U. S. trade data, total trade between the two countries surged from $5 billion in 1980 to $503 billion in 2011. China is currently the United States’ second-largest trading partner, its third largest export market, and its largest source of imports. Many U. S. ompanies have extensive operations in China in order to sell their products in the booming Chinese market and to take advantage of lower-cost labor for export-oriented manufacturing. These operations have helped some U. S. firms to remain internationally competitive and have supplied U. S. consumers with a variety of low-cost goods. China’s large-scale purchases of U. S. Treasury securities (which totaled nearly $1. 2 trillion at the end of 2011) have enabled the federal government to fund its budget deficits, which help keep U. S. interest rates relatively low. However, the emergence of China as a major economic superpower has raised concern among many U. S. policymakers. Some claim that China uses unfair trade practices (such as an undervalued currency and subsidies given to domestic producers) to flood U. S. markets with low cost goods, and that such practices threaten American jobs, wages, and living standards. Others contend that China’s growing use of industrial policies to promote and protect certain domestic Chinese industries firms favored by the government, and its failure to take effective action against widespread infringement of U.  S. intellectual property rights (IPR) in China, threaten to undermine the competitiveness of U. S. IP-intensive industries. In addition, while China has become a large and growing market for U. S. exports, critics contend that numerous trade and investment barriers limit opportunities for U. S. firms to sell in China, or force them to set up production facilities in China as the price of doing business there. Other concerns relating to China’s economic growth include its growing demand for energy and raw materials and its emergence as the world’s largest emitter of greenhouse gasses. The Chinese government views a growing economy as vital to maintaining social stability. However, China faces a number of major economic challenges which could undermine future growth, including distortive economic policies that have resulted in over-reliance on fixed investment and exports for economic growth (rather than on consumer demand), government support for state-owned firms, a weak banking system, widening income gaps, growing pollution, and the relative lack of the rule of law in China. Many economists warn that such problems could undermine China’s future economic growth. The Chinese government has acknowledged these problems and has pledged to address them by implementing policies to boost consumer spending, expand social safety net coverage, and encourage the development of less-polluting industries. China’s Economy Prior to Reforms Prior to 1979, China, under the leadership of Chairman Mao Zedong, maintained a centrally planned, or command, economy. A large share of the country’s economic output was directed and controlled by the state, which set production goals, controlled prices, and allocated resources throughout most of the economy. During the 1950s, all of China’s individual household farms were collectivized into large communes. To support rapid industrialization, the central government undertook large-scale investments in physical and human capital during the 1960s and 1970s. As a result, by 1978 nearly three-fourths of industrial production was produced by centrally controlled, state-owned enterprises (SOEs), according to centrally planned output targets. Private enterprises and foreign-invested firms were generally barred. A central goal of the Chinese government was to make China’s economy relatively self-sufficient. Foreign trade was generally limited to obtaining only those goods that could not be made or obtained in China. Government policies kept the Chinese economy relatively stagnant and inefficient, mainly because most aspects of the economy were managed and run by the central government (and thus there were few profit incentives for firms, workers, and farmers), competition was virtually nonexistent, foreign trade and investment flows were mainly limited to Soviet bloc countries, and price and production controls caused widespread distortions in the economy. Chinese living standards were substantially lower than those of many other developing countries. The Chinese government in 1978 (shortly after the death of Chairman Mao in 1976) decided to break with its Soviet-style economic policies by gradually reforming the economy according to free market principles and opening up trade and investment with the West, in the hope that this would significantly increase economic growth and raise living standards. As Chinese leader Deng Xiaoping, the architect of China’s economic reforms, put it: â€Å"Black cat, white cat, what does it matter what color the cat is as long as it catches mice? The Introduction of Economic Reforms Beginning in 1979, China launched several economic reforms. The central government initiated price and ownership incentives for farmers, which enabled them to sell a portion of their crops on the free market. In addition, the government established four special economic zones along the coast for the purpose of attract ing foreign investment, boosting exports, and importing high technology products into China. Additional reforms, which followed in stages, sought to decentralize economic policymaking in several sectors, especially trade. Economic control of various enterprises was given to provincial and local governments, which were generally allowed to operate and compete on free market principles, rather than under the direction and guidance of state planning. In addition, citizens were encouraged to start their own businesses. Additional coastal regions and cities were designated as open cities and development zones, which allowed them to experiment with free market reforms and to offer tax and trade incentives to attract foreign investment. In addition, state price controls on a wide range of products were gradually eliminated. Trade liberalization was also a major key to China’s economic success. Removing trade barriers encouraged greater competition and attracted foreign direct investment (FDI) inflows. China’s gradual implementation of economic reforms sought to identify which policies produced favorable economic outcomes (and which did not) so that they could be implemented in other parts of the country, a process Deng Xiaoping reportedly referred to as â€Å"crossing the river by touching the stones. † China’s Economic Growth Since Reforms: 1979-2012 Since the introduction of economic reforms, China’s economy has grown substantially faster than during the pre-reform period (see Table 1). According to the Chinese government, from 1953 to 1978, real annual GDP growth was estimated at 6. 7%, although many analysts claim that Chinese economic data during this period are highly questionable because government officials often exaggerated production levels for a variety of political reasons. Agnus Maddison estimates China’s average annual real GDP during this period at 4. %. China’s economy suffered economic downturns during the leadership of Chairman Mao Zedong, including during the Great Leap Forward from 1958 to 1960 (which led to a massive famine and reportedly the deaths of tens of millions of people) and the Cultural Revolution from 1966 to 1976 (which caused political chaos and greatly disrupted the economy). During the reform period (1979-2011), Chinaâ €™s average annual real GDP grew by 9. 9%. This essentially has meant that, on average China has been able to double the size of its economy in real terms every eight years. The global economic slowdown, which began in 2008, impacted the Chinese economy (especially the export sector). China’s real GDP growth fell from 14. 2% in 2007 to 9. 6% in 2008 to 9. 2% in 2009. In response, the Chinese government implemented a large economic stimulus package and an expansive monetary policy. These measures boosted domestic investment and consumption and helped prevent a sharp economic slowdown in China. In 2010, China’s real GDP grew by 10. 4%, and in 2011 it rose by 9. 2%. The International Monetary Fund (IMF) projects that China’s real GDP will grow by 7. 8% in 2012. From 2013 to 2017, the IMP projects that China’s real GDP growth will average 8. 5%. Table 1- China’s average annual real GDP growth. Causes of China’s Economic Growth Economists generally attribute much of China’s rapid economic growth to two main factors: large-scale capital investment (financed by large domestic savings and foreign investment) and rapid productivity growth. These two factors appear to have gone together hand in hand. Economic reforms led to higher efficiency in the economy, which boosted output and increased resources for additional investment in the economy. China has historically maintained a high rate of savings. When reforms were initiated in 1979, domestic savings as a percentage of GDP stood at 32%. However, most Chinese savings during this period were generated by the profits of SOEs, which were used by the central government for domestic investment. Economic reforms, which included the decentralization of economic production, led to substantial growth in Chinese household savings as well as corporate savings. As a result, China’s gross savings as a percentage of GDP has steadily risen, reaching 53. 9% in 2010 (compared to a U. S. rate of 9. 3%), and is among the highest savings rates in the world. The large level of savings has enabled China to boost domestic investment. In fact, its gross domestic savings levels far exceed its domestic investment levels, meaning that China is a large net global lender. Several economists have concluded that productivity gains (i. e. , increases in efficiency) have been another major factor in China’s rapid economic growth. The improvements to productivity were caused largely by a reallocation of resources to more productive uses, especially in sectors that were formerly heavily controlled by the central government, such as agriculture, trade, and services. For example, agricultural reforms boosted production, freeing workers to pursue employment in the more productive manufacturing sector. China’s decentralization of the economy led to the rise of non-state enterprises (such as private firms), which tended to pursue more productive activities than the centrally controlled SOEs and were more market-oriented, and hence, more efficient. Additionally, a greater share of the economy (mainly the export sector) was exposed to competitive forces. Local and provincial governments were allowed to establish and operate various enterprises on market principles, without interference from the central government. In addition, FDI in China brought with it new technology and processes that boosted efficiency. As indicated in Figure 2, China has achieved high rates of total factor productivity (TFP) growth relative to the United States. TFP represents an estimate of the part of economic output growth not accounted for by the growth in inputs (such as labor and capital), and is often attributed to the effects of technological change and efficiency gains. China experiences faster TFP growth than most developed countries such as the United States because of its ability to access and utilize existing foreign technology and know-how. High TFP growth rates have been a major factor behind China’s rapid economic growth rate. However, as China’s technological development begins to approach that of major developed countries, its level of productivity gains, and thus, real GDP growth, could slow significantly from its historic 10% average, unless China becomes a major center for new technology and innovation and/or implements new comprehensive economic reforms. As indicated in Figure 3, the EIU currently projects that China’s real GDP growth will slow considerably in the years ahead, averaging 7. 0% from 2012 to 2020, and falling to 3. 7% from 2021 to 2030. The Chinese government has indicated its desire to move away from its current economic model of fast growth at any cost to more â€Å"smart† economic growth, which seeks to reduce reliance on energy-intensive and high-polluting industries and rely more on high technology, green energy, and services. China also has indicated it wants to obtain more balanced economic growth. Measuring the Size of China’s Economy The rapid growth of the Chinese economy has led many analysts to speculate if and when China will overtake the United States as the â€Å"world’s largest economic power. † The â€Å"actual† size of China’s economy has been a subject of extensive debate among economists. Measured in U. S. dollars using nominal exchange rates, China’s GDP in 2011 was $7. 2 trillion, less than half the size of the U. S. economy. The per capita GDP (a common measurement of a country’s living standards) of China was $5,460, which was 12% the size of Japan’s level and 11% that of the United States (see Table 2). Many economists contend that using nominal exchange rates to convert Chinese data (or that of other countries) into U. S. dollars fails to reflect the true size of China’s economy and living standards relative to the United States. Nominal exchange rates simply reflect the prices of foreign currencies vis-a-vis the U. S. dollar and such measurements exclude differences in the prices for goods and services across countries. To illustrate, one U. S. dollar exchanged for local currency in China would buy more goods and services there than it would in the United States. This is because prices for goods and services in China are generally lower than they are in the United States. Conversely, prices for goods and services in Japan are generally higher than they are in the United States (and China). Thus, one dollar exchanged for local Japanese currency would buy fewer goods and services there than it would in the United States. Economists attempt to develop estimates of exchange rates based on their actual purchasing power relative to the dollar in order to make more accurate comparisons of economic data across countries, usually referred to as a purchasing power parity (PPP) basis. The PPP exchange rate increases the (estimated) measurement of China’s economy and its per capita GDP. According to the Economist Intelligence Unit, (EIU), which utilizes World Bank data, prices for goods and services in China are 41. 5% the level they are in the United States. Adjusting for this price differential raises the value of China’s 2011 GDP from $7. 2 trillion (nominal dollars) to $11. 4 trillion (on a PPP basis). This would indicate that China’s economy is 76. 0% the size of the U. S. economy. China’s share of global GDP on a PPP basis rose from 3. 7% in 1990 to 14. % in 2011 (the U. S. share of global GDP peaked at 24. 3% in 1999 and declined to 18. 9% in 2011); see Figure 4. Many economic analysts predict that on a PPP basis China will soon overtake the United States as the world’s largest economy. EIU, for example, projects this will occur by 2016, and that by 2030, China’s economy could be 30% larger than that of the United St ates. This would not be the first time in history that China was the world’s largest economy (see text box). The PPP measurement also raises China’s 2011 per capita GDP (from $5,460) to $8,650, which was 17. 9% of the U. S. evel. The EIU projects this level will rise to 34. 3% by 2030. Thus, although China will likely become the world’s largest economy in a few years on a PPP basis, it will likely take many years for its living standards to approach U. S. levels. Foreign Direct Investment (FDI) in China China’s trade and investment reforms and incentives led to a surge in FDI beginning in the early 1990s. Such flows have been a major source of China’s productivity gains and rapid economic and trade growth. There were reportedly 445,244 foreign-invested enterprises (FIEs) registered in China in 2010, employing 55. million workers or 15. 9% of the urban workforce. As indicated in Figure 5, FIEs account for a significant share of China’s industrial output. That level rose from 2. 3% in 1990 to a high of 35. 9% in 2003, but fell to 27. 1% by 2010. In addition, FIE’s are responsible for a significant level of China’s foreign trade. In 2011, FIEs in China accounted for 52. 4% of China’s exports and 49. 6% of its imports, although this level was down from its peak in 2006 when FIEs’ share of Chinese exports and imports was 58. 2% and 59. 7%, respectively, as indicated in Figure 6. FIEs in China dominate China’s high technology exports. From 2002 to 2010, the share of China’s high tech exports by FIEs rose from 79% to 82%. During the same period, the share of China’s high tech exports by wholly owned foreign firms (which excludes foreign joint ventures with Chinese firms) rose from 55% to 67%. According to the Chinese government, annual FDI inflows into China grew from $2 billion in 1985 to $108 billion in 2008. Due to the effects of the global economic slowdown, FDI flows to China fell by 12. 2% to $90 billion in 2009. They totaled $106 billion in 2010 and $116 billion in 2011 (see Figure 7). Chinese data for January-October 2012 indicate that FDI fell by 3. 5% on a year-on-year basis; FDI into China will likely total around $112. 1 billion for the full year. Hong Kong was reported as the largest source of FDI flows to China in 2011 (63. 9% of total), followed by Taiwan, Japan, Singapore, and the United States. The cumulative level (or stock) of FDI in China at the end of 2011 is estimated at $1. 2 trillion, making it one of the world’s largest destinations of FDI. According to the United Nations Conference on Trade and Development, China was the world’s second-largest destination for FDI flows in 2011, after the United States (see Figure 8). The largest sources of cumulative FDI in China for 1979-2011 were Hong Kong (43. 5% of total), the British Virgin Islands, Japan, the United States, and Taiwan (see Table 3). According to Chinese data, annual U. S. FDI flows to China peaked at $5. 4 billion in 2002 (10. 2% of total FDI in China). In 2011, they were $3. 0 billion or 2. 6% of total FDI (see Figure 9). From January to October 2012, U. S. FDI in China rose by 3. 8% (year-on-year).