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    IBT Act 4

    Uploaded by

    Ace Vezard Solis

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    © All Rights Reserved
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    of 5

    National University – Laguna

    Km. 53 Pan-Philippine Hwy, Calamba, 4029 Laguna

    ACTIVITY 4: EMERGING MARKET

    BAINBUSX

    Submitted by:
    Beros, Lorraine Anne T.

    Englis, Julienne Cesar


    Justiniani, Janeila Crysse
    Solis, Ace Vezard C.
    BSA 211C

    Submitted to:
    Mr. Mario Andrew P. Ustaris
    Course Instructor
    1. According to the documentary you watched, what are the successive scenarios in which
    China became one of the richest countries.
    Based on the documentary, there was a moment wherein China became a global economic
    force who has predicted to become the world’s biggest economy in the future and this claim was
    supported by different scenarios where China has proved their high worth of value. Those
    scenarios specifically started with the Market Reform which took on the late 1970s-1980s, where
    Xiaoping initiated economic reforms after the passing of Mao Zedong. Which helped the country
    from being a centrally planned economy to becoming a market-oriented one. This period has
    introduced policies such as the Household Responsibility System where farmers are allowed to
    cultivate their own land and sell surplus produce and also the opening of Special Economic Zones
    in order to attract foreign investment and technology. Next is the Export-led Growth in 1980s-
    1990s where China has been branded to become the factory of the world. Export-oriented
    industries arose which contributed significantly to the growth of the economy. The government
    has also implemented tax incentives and infrastructure development.

    In the succeeding years, is the beginning of the modernization of China wherein they
    started to invest in infrastructure projects including transportation networks, telecommunication
    and energy systems which has boosted productivity, facilitated trade and supported urbanization.
    Domestic consumption also became higher due to the large population of the country which
    provided a huge consumer market for domestic and foreign companies.

    By the year 2010, China has started to appreciate innovation and technology development
    as part of its economic strategy, focusing on sectors such as high-tech manufacturing, artificial
    intelligence and renewable energy. They have also initiated global investment projects such as Belt
    and Road Initiative which is aimed at enhancing the infrastructure connectivity and to foster
    economic cooperation with different countries to expand its influence and have access to new
    markets. Lastly, the country has also pursued financial reforms in order to liberalize its capital
    markets and internationalize its currency. Regardless of the challenges, namely economic
    imbalances, environmental degradation and demographic shifts. China continues to strive for
    sustainable development and continued prosperity.

    2. Even though China is one of the richest countries in the world, why can it be considered
    an emerging market? base your answer on the characteristics of a country that can be said
    to have an emerging market?
    a. Market volatility
    China, despite being one of the richest countries in the world, is still considered to be an
    emerging market because of the volatility of its market. The main cause for this is the country’s
    political instability, exposing investors to the risk of fluctuations in exchange rates and market
    performance. Unlike developed markets who can operate freely in the market, the government of
    China actively intervenes in various sectors. This intervention then leads to unpredictable changes
    in trading policy, which in turn impacts market confidence. Aside from that, China restricts the
    free flow of capital in and out of the country which hinders market adjustments.

    b. Growth and investment potential


    In terms of growth and investment potential, China is still considered to be an emerging
    market. Despite being one of the richest countries, China has significant infrastructure and
    development needs, especially in terms of transportation, healthcare, and environmental
    protection. The need for investment in these sectors attracts investors seeking opportunities in
    emerging markets. Moreover, certain sectors within the Chinese economy, such as high-tech
    industries and renewable energy might still be considered emerging. These sectors offer high
    growth potential and also attract investors seeking opportunities in the market.

    c. High rates of economic growth


    China is considered an emerging market despite being one of the richest countries due to
    its historical economic transformation. Before the initiation of reforms 40 years ago, China had
    policies that kept its economy poor and isolated. Since opening up to foreign trade and
    implementing free-market reforms, China has experienced rapid growth, lifting over 800 million
    people out of poverty. Although it is now the world's largest economy, manufacturer, and
    merchandise trader, its economic growth has slowed, prompting a shift towards a new growth
    model emphasizing private consumption and innovation. The Chinese government's focus on
    innovation, industrial policies, and a "new normal" growth model align with characteristics of
    emerging markets, highlighting the ongoing challenges and reforms necessary for sustained
    economic development.

    d. Income Per capita


    While China has achieved remarkable economic growth, lifting hundreds of millions out
    of extreme poverty, a substantial portion of the population continues to face low incomes and poor
    living standards. The success in poverty alleviation is linked to rapid economic growth, with
    China's Gross National Income per capita increasing over ten-fold in the last two decades.
    However, economic growth has been uneven, especially in rural areas, where poverty rates remain
    notably higher. Despite China's achievements, persistent gaps in social safety nets, concerns about
    the sustainability of poverty alleviation measures, and the risk of vulnerable populations slipping
    back into extreme poverty contribute to its classification as an emerging market in the income per
    capita category.

    3. What are the strategies used by China that made them an economically powerful country?
    Like most other countries, China's initial step in growing its economy was to increase its
    heavy industry. China's strong economic growth and trade expansion are likely to continue for a
    very long time. However, this promise cannot be fully realized unless a number of structural and
    macroeconomic risks are addressed. Because of the size and complexity of the Chinese economy,
    many of these reform issues are related to one another. China employed a variety of strategies to
    gain economic influence. Some of these strategies include reforming the agricultural, educational,
    and industrial sectors; encouraging the development of private businesses; creating a stock
    exchange; encouraging collaboration between tech universities and large corporations; attracting
    in scientists with foreign training; establishing special economic zones; searching for new
    international trade agreements; and restating the Communist Party's dominance. compared to the
    West, China has prioritized economic growth over liberal ideas and notions when it comes to
    modernization. China's rise to economic dominance is evidence of the success of an all-
    encompassing and dynamic strategy for economic development.

    Members’ Contribution:
    Student Name Output Contribution (specific)

    1. Beros, Lorraine Anne T. Question no. 2 – a and b

    2. Englis, Julienne Cesar Question no. 3

    3. Justiniani, Janeila Crysse Question no.1

    4. Solis, Ace Vezard Question no. 2 – c and d


    References

    Page, V. (2023). Primary drivers of the Chinese economy. Investopedia.


    https://www.investopedia.com/articles/investing/042815/fundamentals-how-china-makes-its-
    money.asp

    China’s Economic Rise: History, Trends, Challenges, and Implications for the United States. (2019, June
    25). CRS Reports.
    https://www.everycrsreport.com/reports/RL33534.html#:~:text=China’s%20rise%20from%20a,a
    nnual%20rate%20of%20nearly%2010%25.

    Hart, B. (2021, May 12). Is China Succeeding at Eradicating Poverty? | ChinaPower Project.
    ChinaPower Project.
    https://chinapower.csis.org/poverty/#:~:text=When%20the%20%245.50%20per%20day,populati
    on%20(237.2%20million%20people)%20still

    Hu, Zuliu., & Khan, Mohsin. (n.d.). Why is China growing fast?. International Monetary Fund.
    https://www.imf.org/external/pubs/ft/issues8/index.htm

    Morrison, W. (2019, June 25). China’s Economic Rise. Congressional Research Service.
    https://sgp.fas.org/crs/row/RL33534.pdf

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