China: Rapid changes in the world’s 2nd largest economy

National Yemen

Mahmoud Ebraheem Al-Naqeeb

By Mahmoud Ebraheem Al-Naqeeb

In the framework of bilateral relations between Yemen and People’s Republic of China, the Chinese government organized and provided a training program on economic administration that ran from 3-23 December 2012. The program focused on Yemeni officials and trade and investment in China. Nineteen Yemenis participated in the program, in which a number of Chinese officials and experts offered lessons based on Chinese experience economic administration and public affairs.

Starting in 1978, China began opening itself to the outside world in step with a national shift from a controlled economic approach to a market economy. The new policy was adopted in order to contend with a dramatic increase in population numbers and the need to adjust to the growing population’s needs.

The reform process and gradual opening up to the outside world was carried out in five stages and under the framework of what was termed ‘Socialism with Chinese properties’; the first stage was carried out from 1984 to 1987. The second stage went from 1985 to 1990, during which a system concerned with institution’s responsibilities was activated in rural areas. The third phase began in 1990 and ended in 1993, when the government sought to effect changes in the national economic system, in large part by encouraging economic engagement by foundations both within and without China’s borders.

The third period saw the Chinese government pursuing changes in the economic system and the use of a system of participation to encourage institutions in relation to internal and external competition.  During the fourth stage, which extended from 1994 through 2002, the government pursued the establishment of modern public institutions. Since 2002, China has been carrying out a fifth phase, focused on instituting a system of participation for public and private institutions. During this phase, private institutions saw great improvements and raised levels of participation.

Critical issues facing China

The most critical issues facing China are concerned with the large gap which exists between the country’s rich and poor, disparities between urban and rural areas, and an unfinished social insurance system. In addition, China is required to provide 800 million job chances and is stressed with the issue of human-environment relation and lack of natural resources.

China began making use of electronic means of trade in 1998. In time, electronic trade methods saw high levels of acceptance at both the personal and institutional levels, and today accounts for 5% of trade in China.

International investment in China

China now attracts a significant amount of investment attention among developing countries; foreign investment increased from $46.9 billion in 2001 into $105.7 billion in 2010. Chinese investment in foreign countries rapidly increased, and amounted to $60 billion in 2011.

Yemeni-Chinese relations

Historic relations have existed between Yemen and China for centuries, and date back to the sixth century A.D. Both countries had trade links via sea links. In this way, silk and ceramic products entered Yemen, while China received Yemeni incense, perfume and medicine.

After modern China was established, diplomatic relations were forged between the two countries in 1956. Chinese government companies introduced three of Yemen’s most significant infrastructural projects, which included Yemen’s first spinning and weaving textile factories. According to the Chinese Customs Department, trade between Yemen and China amounted to more than $2 billion in the first half of 2012.