Economic of China

Introduction to Economics

“Economics is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices.” (Michael Parkin, 2008: pg2) It is the study of choice and decision-making in a world with limited resources, how societies allocate and manage their resources effectively, and the influences and factors that attributed to the decision of human beings.

Scarcity is the basic economic problem faced in the world today; it is a result from the tension between our limited resources and the unlimited needs and wants required from people. In economic context, scarcity refers to limited resources like Labour, Capital, Land and Entrepreneurs. Individuals and nations have to make decisions by weighing alternatives for different items, pick the most viable option and give up (trade-off) others in order to satisfy one’s own. In order to reduce the deficit, various economic decisions must be made in measure to ensure resources are allocated efficiency and utilised effectively.

Introduction of Economic Growth

“Economic Growth is an increase in the real level of national output as measured by the annual percentage change in real GDP (Gross Domestic Product).” (Quoted from source: http://tutor2u.net/economics/content/topics/econgrowth/economic_growth.htm) Typically known as GDP Growth, Economic Growth is a positive change in the level of production of goods and services by a country over a certain period of time. Undoubtly Economic Growth brought about an increase in our standard of living, however it doesn’t overcome scarcity and avoid opportunity cost. In order to cut down this issue, faster production growth has to be achieved so as to deliver a higher opportunity cost of economic growth.

Economic Growth of China

The rapid economic growth of China has emerged since the introduction of economic reform in 1978,...