Should China be Promoting Big Business Groups Essay

Should China be Promoting Big Business Groups - Essay Example As the discussion stresses Chinas enterprise groups have performed better than any other enterprise. They are competitive and ready for the challenge of improving the nation’s economy. They have driven the economy of china to a higher level. The process of transforming these enterprises is better known as Jituanhua. By 2004, china transformed about 2692 enterprises into enterprise groups. This enterprise groups provided employment for almost 30 million people in china. Their output has grown up to 21% annually. These enterprise groups expanded more as many more companies joined in to work together.From this paper it is clear that  China has adopted the East Asian style to development. This started all the way from 1980s when it was realized to be one of the fast growing economies in East Asia. They key models imitated by the Chinese economy from other already developed states in East Asia are state controls over the finance, government intervention in state firms, substituti ng imports in some industries and high export activities. A lot of saving and investment is also encouraged locally. Much similarity is noticed between Taiwan and china since they both have private and state enterprise sectors that play the crucial role in their development strategies.  It is surprising that this was the case even though china shared most of the affected sector with other East Asian countries.... This started all the way from 1980s when it was realized to be one of the fast growing economies in East Asia. They key models imitated by the Chinese economy from other already developed states in East Asia are state controls over the finance, government intervention in state firms, substituting imports in some industries and high export activities. A lot of saving and investment is also encouraged locally. Much similarity is noticed between Taiwan and china since they both have private and state enterprise sectors that play the crucial role in their development strategies. In 1997 and 1998, there was a financial crisis that affected the East Asian countries though china was affected at a minimal degree. It is surprising that this was the case even though china shared most of the affected sector with other East Asian countries. The East Asian financial crisis According to (Yang & Tyes, 1999), the East Asian countries were doing remarkably well in the financial development around the year 1997. Financial and currency crisis affected this greatly. Many economies in this region that had expanded started to slow down. This era experienced currency depreciations. According to (Yang & Tyes, 1999) â€Å"The external crisis combined with domestic reforms and with the changes that were taking place in the macroeconomic policy to retard overall economic growth and an increase in employment.† The Chinese people had long valued the culture of saving and using the savings future which saved china’s economy from collapsing like the rest of the East Asian states. Japan experienced a drop in investment to about a tenth in the years 1997-1998. In some countries, the economy declined by a half. Production of