Economic growth

Definition

Economic growth refers to the increase in the production of goods and services in an economy over time, typically measured as the percentage increase in real Gross Domestic Product (GDP). This growth is often viewed as a key indicator of a nation's economic health and can result from various factors such as technological advancements, increased capital investment, and improved labor productivity. In particular contexts, economic growth can also raise living standards and provide governments with more resources to address social issues.

5 Must Know Facts For Your Next Test

1. China experienced rapid economic growth starting in the late 20th century, particularly after implementing market-oriented reforms in the 1980s.
2. Economic growth in China has led to significant improvements in living standards for many citizens, though it has also exacerbated income inequality in the country.
3. The focus on GDP growth in China has sometimes come at the cost of environmental sustainability, leading to pollution and resource depletion.
4. Government policies aimed at boosting economic growth have included investments in infrastructure, education, and technology.
5. China's transition from a planned economy to a market-oriented economy has allowed for increased foreign investment and trade, which have been crucial drivers of its economic growth.

Review Questions

• How did the shift from a planned economy to a market-oriented economy impact China's economic growth?
  • The transition from a planned economy to a market-oriented economy in China was pivotal for its economic growth. This shift allowed for greater individual entrepreneurship, increased foreign investment, and competitive markets, all of which significantly boosted productivity. Market-oriented reforms led to rapid industrialization and urbanization, propelling China into becoming one of the world's largest economies.
• What are some social consequences of China's economic growth that relate to human rights concerns?
  • China's rapid economic growth has raised significant human rights concerns, particularly regarding labor conditions and income inequality. While many people have benefited from improved living standards, there are persistent issues related to workers' rights, including exploitation in factories and lack of legal protections. Additionally, the wealth gap has widened between urban and rural populations, leading to social tensions and challenges for equitable development.
• Evaluate the long-term sustainability of China's economic growth model and its implications for human rights and environmental issues.
  • The long-term sustainability of China's economic growth model is increasingly under scrutiny due to environmental degradation and social inequalities. The relentless pursuit of GDP growth has led to significant ecological harm and resource depletion. If these challenges are not addressed through more sustainable practices and respect for human rights, China may face severe societal pushback, which could destabilize its continued economic progress and lead to greater global scrutiny of its policies.

Related terms

Gross Domestic Product (GDP): The total monetary value of all finished goods and services produced within a country's borders in a specific time period, often used as a broad measure of economic activity.

Market-oriented reforms: Policy changes aimed at transitioning an economy from government control and planning to one that is driven by supply and demand dynamics.

Living standards: The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.