The major challenges for China; Why the past successful export-led Essay

The major challenges for China; Why the past successful export-led growth model cannot continue; How the Chinese economy should be further reformed - Essay Example Despite all these down turns, there is hope for the resurgence of this economy; the Chinese government has re-embarked on strategic plans that would enable resurrection of its previously steadily growing economy. A country with settled political situations, democracy and that is well equipped in terms of technology has all the privileges to kick start the road to an impressive economy. The Chinese economy has been one of the most consistent and swiftly growing with a sustainability growth rate of 10% (Naughton, 2007). China has portrayed a dynamic and unrivaled density; however, it is still transforming from two transitions as first, it â€Å"is still completing its transition away from bureaucratic socialism and toward a market economy† (Naughton, 2007, p. 4). Naughton further explains the second transformation with which China is transforming, which is the fact that â€Å"China is in the middle of the industrialization process, the protracted transformation from a rural to an urban society† (2007, p. 4). These two transitions are still far from completion and therefore China still has challenges. The Chinese economy can now be compared to those of developing nations. While this economic similarity exists, so do the challenges. One of the crucial challenges that have been faced recently due to the transition is the shift from the socialist type economy to the market based economy. This challenge was however fixed but again, it led to the rise of another challenge related to development. According to Naughton, these challenges are â€Å"the need to invest in human skills and physical infrastructure, the need to create effective institutions, and the need to protect underprivileged and vulnerable sections of the population† (2007, p. 5). Although there are many positives related to the growth such as improved living standards, many Chinese have fallen in the hands of uncertainties marred with risks. Majority