Economy of China Term Paper

Pages: 6 (2343 words)  ·  Style: MLA  ·  Bibliography Sources: 4  ·  File: .docx  ·  Level: College Junior  ·  Topic: Economics

When there are many SOEs, the government prevents competition. It is through competition that quality in products are improved and it also helps in price control as opposed to when subjected to monopolistic situation where the state is the sole producer of certain commodities or enjoys a bigger market share. Too much SOEs prevent growth and start ups of small enterprises to improve the economy and create more employment opportunities and also denying the government a source of revenue. It further weeds out the entrepreneurial culture among the citizens and put more pressure on the government to be the sole creator of jobs which cannot be realized in a country that has the highest population and a high percentage of the unemployed. This situation subjects the labor force to low income levels as they also live under squalid conditions and lead poor lifestyles. Low payment has continued to widen the gap between the rich and the poor as wealth is unequally distributed. The incomes therefore cannot support the lifestyles which is the reason for the high level of corruption that exists in public offices. Over involvement of the government on enterprises might shift focus and kill the private sector which is important for every economy.

Too much SOEs have also contributed to the fact that there exists a technological gap between China and the developed countries. China still lies behind in terms of technological development and innovation and is always copying and imitating what others have produced before to come up with their own innovations (Suarafel Girma et al. n.d).Buy full Download Microsoft Word File paper
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Term Paper on Economy of China Is One Assignment

Laxity on the government's part to repackage and make the privately owned enterprises attractive has lead to the job seekers choosing to work in the State Owned Enterprises instead of the non-SOE's. According to a survey by an economic professor in Tsinghua University, more job seekers have developed a liking for the SOE's over the privately owned enterprises because the future of the private enterprises are uncertain. Jobseekers prefer SOEs for job security and welfare packages, most multinational companies have in the recent past laid off workers in their thousands which has been a concern among the jobseekers. Privately owned enterprises face stiffer competition from the SOEs which therefore make them unable to sustain the employees due to the low profit margins. Work in the state owned enterprises are also perceived to be easy with less working hours as opposed to the private enterprises.

The Chinese SOEs and other Chinese organizations have better prospects for promotion and career advancements compared to the privately owned. Female job seekers also have the fear of breaking the glass ceiling among the foreign and privately owned enterprises to rise to senior positions. The few non-state owned enterprises have been perceived to be subjecting the workers to poor working conditions and the work load is a lot compared to the state owned ones, this perception has a negative effect and plays a role in hindering development and creating more difficulties for China's private industrial enterprises (Wang Zhuoqiong, 2012).

In conclusion, Chinese government should encourage a level play ground for all to attract more investors which can help in diversification by offering alternative services to the citizens. Government officials should be non-partisan to sensitive issues that concern the state and offer the best solution possible while serving the interest of the citizens. The leaders should encourage wide consultations and engage more opinions on different policies to take the country forward. The government should spend heavily on technology so as to keep pace with the changing technology and encourage innovativeness.

The economic transformation from 1978's gave china the direction it required to be able to open up to the world and encourage trade. Most investors have appetite for the Chinese market as the conditions are more favorable compared to other investment destinations in the developing nations. China will still be an economic giant if all the sectors are equally tapped into and other sectors improved taking into consideration the comparative advantage it enjoys over the others, it will still have volumes in terms of trade with other nations. Market economies however should be closely monitored to cushion them from the external shocks that might have a negative impact on the progress of the economy.


Anmin Chen, (2009). Thirty years of Chinese Reform- Transition from Planned Economy to Market Economy. Retrieved October 18, 2012 from

Gao Xu, (2010). State Owned enterprises in China: How profitable are they? Retrieved October 18, 2012 from

Russell Huebsch, (2007). How China's Transition to a Market Economy Propelled it Past Russia's reform in the 90's. Retrieved October 18, 2012 from

Suarafel Girma, Yundan Gong & Holger Gorg, (n.d). What Determines Innovation activity in Chinese State- owned Enterprises. Retrieved October 18, 2012 from

Wang Zhuoqiong, (2012). More new grads opt for State Firms. Retrieved October 21, 2012 from www. [END OF PREVIEW] . . . READ MORE

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How to Cite "Economy of China" Term Paper in a Bibliography:

APA Style

Economy of China.  (2012, October 19).  Retrieved September 20, 2020, from

MLA Format

"Economy of China."  19 October 2012.  Web.  20 September 2020. <>.

Chicago Style

"Economy of China."  October 19, 2012.  Accessed September 20, 2020.