Chinese
Industry
The People’s Republic of China is
considered one of the leaders in the field of Industry. China’s is ranked
second in terms of GDP (Gross Domestic Product) and in industrial output.
China's industrial structure is different than U.S industry in that is has
state-ownership and private-ownership in the economy. The main types of
industry that China produces are mining, construction, power and manufacturing.
The
State of China also called the People’s Republic of China was proclaimed in
October 1, 1949. Since the proclamation
of the People’s Republic of China, industry has received a considerable amount
of attention. Between the times period
of 1949 to 1952 is considered the recovery period, due to the civil war that
was waged between the communist and Kuomintang forces. From after this period, there was a First
Five-Year Plan (1953-1957), this period concentrated on constructing plants and
equipment for heavy industry. Most of
this construction was due to the Soviet assistance. The main focused was machinery, iron, and
mining industries plants and most of the foundations. As a result of this period, China increased
its industrial output by doubling it. From
1958 to 1960 is called the Great Leap Forward.
Chinese industrial production increase by 45 percent as many new plants
came into operation in this time frame. Many
of these facilities were pushed over capacity, which many of the work forces
was physically pushed to the limits. This
called problems with the economy almost causing a collapse. Misallocations and overextensions of
resources were also to blame for this. In
the year of 1961, output dropped considerably as many of Soviet resources were
withdrawn from China. Soon after, China
began planning and coordinating to recover their lost production. By 1965, China had recovered back to their
production levels of the year 1957. In the
Cultural Revolution of the late 60’s, production fell again as civil unrest
disturbed transportation and factories of the Industrial areas. Another Five-Year Plan (1971-1975), was set
in motion in order in increase production.
The plan was successful in making thousands of small scale plants and
attracted foreign investments in plants and equipment. With the deaths of Mao Zedong in 1976 and as
destructive earthquake called Tangshan earthquake caused industry growth to
fall to zero. The Four Modernizations of
1977 to 1978, growth in industry reached 16 percent and the political system stabilized. During the 1980’s, China saw a need for
industry to become more efficient with the use of raw materials, fuel and
energy. They also gave more autonomy to enterprises
toward becoming free market. From the
years 1986 to 1990, the Seventh Five-Year Plan was put into motion. This period focused on consumer demand and
the modernization of technology.
The
Structure of Chinese Industry is rather different than the United State in that
it has two different sectors of Industry.
The two sectors are State-owned enterprise and private-owned enterprise,
but has a seen a shift in recent years towards public-owned. State-owned is defined by Wikipedia as “are property interests that are vested in
the state,
rather than an individual or communities (1)”. Private-ownership is defined as “refers to a
commercial enterprise that is owned by private investors, shareholders or
owners (usually collectively, but they can be owned by a single individual), and is in contrast to state
institutions, such as publicly owned enterprises and government agencies. Private enterprises
comprise the private sector of an economy. An economic
system that contains a large private sector where privately run businesses are
the backbone of the economy is referred to as capitalism.
This contrasts with socialism, where industry is owned by the state
or by all of the community in common. The act of taking assets into the private
sector is referred to as privatization. The goal of private enterprise
differs from other institutions, the major difference being private businesses
exist solely to generate profit for the owners or shareholders. (2)”. As read on gac-china.com, the was broken down to “In 1978,
China had only the public-ownership economy, state-owned enterprises making up
77.6 percent and collectively owned enterprises, 22.4 percent(4)”. As
of 2004, 74 percent of the top 500 enterprises in were state owned. The private enterprise sector employs about
half of the entire Chinese’ society as of today.
In China, the main industries are
energy, manufacturing, and automobiles. The
energy field breaks into their main areas that are thermal, hydro, and nuclear
power. This is the fastest growing of
all industrial sectors of china. Because
of this, China now has power grids established to power all its cities and most
of the rural areas. The total generated electricity
output of China is 3.2 trillion kilo watts of electricity. This power output ranks second in the
world. Thermal electricity is the largest
producers of electricity in China, which is supplied by coal-fired power
plants. Coal electricity produces 78
percent of the electric output of china.
The construction of 562 new coal-fired plants has raised the energy
production from this fossil fuel from 1713 TWh in 2004 to 3,273 TWh in
2010. This is nearly 200 percent jump in
production in just 7 years. Wikipedia reports
that “In June 2007, it was reported that an average of two new plants were
being opened every week. (3)”.
As of today, China has 15 nuclear power plants installed producing 54.8
billion kilo watts of electricity, which accounts for only 1.9 percent of total
electrical output. The next is renewable
energy sources mostly coming from hydropower.
This area seen rapid development and has been highly invested into. As cited from Wikipedia, it is said that “China
has been investing heavily in the renewable energy field in recent years. In
2007, the total renewable energy investment is $12 billion USD, second only to
Germany” (2). This being said
they are the world’s leading producer of renewable energy which includes solar,
wind power as well. Hydro-electric
produces 16.6 percent of the electricity generated. They already have the largest capacity in hydroelectricity
in the world. The Three Gorges Dams is
the world’s largest hydro-electric dam which is located Yangtze River by the
town of Sandouping. Machinery
manufacturing is another large sector of industry in China. They can manufacture large and advanced
equipment used in everyday manufacturing plants such as generating equipment’s
to transportation equipment’s. This
sector has been a main stay in the Chinese exporting, as it has been the leader
for quite some time. “In 2006, the
export value of machinery and transportation equipment reached 425 billion U.S.
dollars (4)” as said by ching.org.
Another large sector is Chinese automobile. Chinese automobiles industrial roots have
Soviet origins due to the USSR aid to China in the 1950’s. This sector’s income
was estimated in 2006 to be 143 billion U.S. dollar and is expected a high annual
increase. As of 2012, China exports 1
million vehicles per year and as well is rapidly increased. The main car brands sold are Geely, Great
Wall, Chery and as well as the multinational brand of Toyota. It is said that are lacking in safety feature
and are cheaply made and this is may or may not hurt the sales of these vehicle
but they are the largest vehicle market. The number of registered vehicle in China’s
roads 62 million in 2009. This number is
expected to grow much larger by 2020, estimates at 200 million. This sector has many chances to grow much
larger than it is as there are many opportunities and many joint ventures of
car brands from foreign car companies such as GM, Volkswagen, Jeep, and many
more.
In conclusion, China is on the forefront
of Industry sector, dominating many sectors including automobiles, power, and manufacturing. Industry is very important to a countries economy
as it produces most of the goods we use in everyday and as well gives my people
employment in the work force. I believe
they will stay on or near the top for quite some time. They have a highly developed and modernized
industry helped by the large work force it has.
China is an established economic powerhouse and can rival any other country’s
economy and has a proven plan to continue this on into the future.
Bibliography
1.
"Industry of the People's Republic of China."
Wikipedia, 14 Dec. 2012. Web. 15 Dec. 2012. <http://en.wikipedia.org/wiki/Industry_of_the_People's_Republic_of_China#Industrial_output>.
2.
"Energy policy of
China." Wikipedia, the free encyclopedia. N.p., 13 Dec. 2012. Web. 17 Dec. 2012.
<http://en.wikipedia.org/wiki/Energy_policy_of_China>.
3.
"Technological and
industrial history of the People's Republic of China." Wikipedia, 23 Aug.
2012. Web. 16 Dec. 2012.
<http://en.wikipedia.org/wiki/Industrial_history_of_China>.
4. http://www.gacchina.com/China_Insight/China_Facts/China_Major_Industries/china_major_industries.html-12/15/12
5.
http://www.china.org.cn/english/features/China2007/238565.htm-12/13/12
6.
Kiernan, Peter D. Becoming China's Bitch: And Nine
More Catastrophes We Must Avoid Right Now: a Manifesto for the Radical Center.
Nashville, Tenn.: Turner, 2012. Print
7.
Rein, Shaun. The End of Cheap China: Economic and
Cultural Trends That Will Disrupt the World. Hoboken, New Jersey: John
Wiley & Sons, Inc., 2012. Print.
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