Chinas Rapid Economic Growth and Transformation Essay

Chinas Rapid Economic Growth and Transformation - Essay Example China’s rapid economic growth and transformation can be attributed centrally on the revolution from an agrarian economy to and industrialised one. This move can be analysed in various ways. Drastic changes have taken place in the economy and the manufacturing sector contributes to the larger portion of the country’s GDP. The role of the agricultural sector has increasingly decreased over the years. Additionally, the role played by the private sector has increased significantly since the economic reforms in 1978. There have been reforms to promote economic activities in the private sector such as the inclusion Protection of private property in the constitution. The sector is a dominant force in the economy and is responsible for the creation numerous job opportunities in the country and a main source of capital funding. Opportunities and Challenges for Retail Businesses in China The retail business in China is taking off at an incredible rate. In next to no time, the sales are expected to reach 1 trillion US dollars annually. In fact, China’s retail market is among the largest in the world. This is due to increasing income levels, a fast growing economy, deregulation of the retail sector and an increasing retail market. An exponential increase in the number of hyper markets, super markets, appliances, department stores and electronic stores especially in Eastern China. The main opportunity in the retail market lies in the huge customer base. China has one of the largest populations globally and this guarantees a readily available market for the retailers.Additionally, the financial sector is highly lucrative owing to the immense potential possessed by the Chinese household savings. Foreign investors are attracted by the high production capabilities and the supply of labour. China has a well developed infrastructure that holds massive potential for ret ailers to develop complex transport services. The most noteworthy development for retailers was China’s accession to the WTO in 2001. Furthermore, the country’s trade barriers and market barriers have been eliminated opening the vast domestic market (Lai, 2006:22). In spite of the booming retail market in the China market, there are several challenges facing the sector. There are various risks and challenges resulting from inflation and fluctuating economic trends in the market. In addition to, there are cultural differences between the natives and retailers from other countries. Other challenges in the market inadequate retail market information, an ambiguous legal environment and a highly unskilled labour force (Wong and Lai, 2006:58). Main Factors That Can Limit Personal Consumption in China and Can Prevent it from Driving Economic Growth in China Personal consumption can be simply described as the total amount of goods that an individual is able to purchase. It is important as it contributes to the aggregate consumption therefore is said to have an impact on overall economic growth. The most important factors affecting individual consumption is the prices of goods. When the prices of commodities are high, consumption will be limited resulting to decreased economic growth. In case where the importation taxes are high, the prices of