Economic growth is an increase in the production of economic goods and services, compared from one period of time to another. It can be measured in nominal or real terms. Over the years, the term “economic growth “has been used by and large, to describe the advancement of a country’s economic sector.
More importantly, the economic growth of a country is very important for reasons like; higher average incomes, lower unemployment, and lesser government borrowing. For developing economies, economic growth enables countries to escape low levels of poverty, as even a minimal growth level may provide for higher standards of living and a largely improved life expectancy facilitate higher living standards and an improvement in life expectancy.
Though this growth of the economy may lead to congestion and pollution, the economic growth of a country is crucial, and prerequisite for a country’s overall progression. The title of the fastest growing economy is known to have previously been held by India who recorded 6.6% in the past year and currently, 5.8%. China has however made away with this title as it records 6.4% growth this year. Various economists have speculated various reasons for India’s decline, and China’s concomitant growth. However, these reasons are yet to be proven true.
China has had the largest economy in the world since 2014 according to the World Bank. It has developed into a highly diversified economy and one of the most influential players in international trade. China has overtaken US as the world’s number one manufacturer. It is now also the world’s biggest producer of aluminum. In 2015, China’s middle class became the largest in the world. China’s swift growth has reduced poverty immensely, only 3.3% of the population lives below poverty the line. This growth has made China one of the world’s economic leaders.
The Chinese government’s spending had been a significant driver of its growth. The government owns strategically important companies that dominate their industry. When China trades internationally, the companies must open factories to employ Chinese workers, share their technology and China in turn uses this knowledge to make these products for themselves.
However, Chinas development is highly uneven. Its major cities and coastal areas are far more prosperous compared to rural and interior regions. Its high growth levels have come at the cost of consumer safety. The public is protesting against pollution, food safety and inflation.