China’s GDP has increased 12 times in 20 years. What is driving China’s rapid economic growth?

2022-08-03 0 By

The rapid development of China’s economy has made many people take it for granted!It would be surprising not to grow, but the fact is that the vast majority of countries in the world have gotten worse, not better, over the past 20 years.There are a few days ago, according to an article this decade, the world economic growth increment basically comes from China and the United States, other countries basically didn’t produce much increment, share in the world is actually falling, growth up and only the two countries, growth in India also good, the other is some smaller size of individual countries.In fact, Japan’s economy has not grown for almost three decades, and western European countries have mostly hovered between one and two percent, sometimes not growing at all.It can be seen that the high economic growth is not as simple as imagined, so where does the development power of China’s twelve-fold increase in the past 20 years come from, and why does it have such a high growth rate?This problem, in fact, there are a lot of people said that all sorts of claims, the mainstream of the so-called demographic dividend, think that China’s abundant human resources, produced a steady stream of goods, advantage lies in the labor cost is low, the products of low cost, strong competitiveness in the international market, so as to realize the high speed development of economy.But that doesn’t explain the fact that China’s economy is still very competitive, and even more so in the international market, despite rising labor wages since 2008.In fact, the focus of demographic dividend is wrong. According to the mainstream view, it is actually the competitiveness generated by the low cost of factors of production, namely labor resources.But since 2008, low-cost labor has largely disappeared, leading to a flood of labor-intensive industries leaving China to set up factories in places like Vietnam.But why has this not affected China’s competitiveness?In my opinion, the demographic dividend should be focused on the population size of 1.4 billion. This is the real dividend and the real source of competitiveness, which is also the reason why China’s GDP has increased 12 times in the past 20 years.Why do you say that?First, a market of 1.4bn people is big enough.A market of 1.4 billion people can generate eye-popping sales of any niche product, allowing companies to survive and thrive.The need for a unified market of 1.4 billion people.It is what you are good at, no matter how small the field, in the face of such a large population, is a very large market, can get a huge space for development, and survive well.Secondly, the size of 1.4 billion people can carry more industrial division.Lighters, for example, can become the backbone industry of a county, and one part of it can feed a town.A straw can be the backbone of a village, a town.Waterproof materials can become a pillar industry of a county.Such a variety of, can be countless industrial separation refinement to the extreme, and then produce professional, large-scale production.Such a large division of labor is under the huge market demand, coupled with a complex enough economic format, the division of labor, and both large-scale, resulting in cost control can reach the extreme.Third, the division of labor in the size of 1.4 billion people evolves into a more complex economic system and generates comprehensive competitiveness.If the economic activities of 1.4 billion people are regarded as a system, due to the large number of participants, the operation of the system will be extremely complex, and various economic combinations and link modes will also evolve extremely complex.Like a forest, the larger the forest, the more diverse the species and population, and the larger the number of organisms it supports.Similarly, in an economic system with a population of 1.4 billion, alibaba, Huawei, Tencent and other enterprises can be born, as well as industrial giants such as Snow Ice City and Xibei Oat Noodle Village. All walks of life can achieve great development.Even writing headlines on headlines and web articles on tomatoes can be lucrative.In other words, such a large population advantage and specialized labor division system will evolve into a more complex economic ecosystem, and such a complex economic ecosystem will also produce a more competitive overall advantage.Overall, I think driving this 20 years of rapid development of China’s economy, the demographic dividend, but it is not cheap production factors of dividend, but the population size of bonuses, is to build a unified big market, increasingly complex economic forms, formed a special complex system economic ecosystem, and the ecosystem can be produced more competitive economies of scale,Form overall economic competitive advantage.