Companies have always sought to increase productivity through various means. One of the essential factors influencing the growth of labor productivity is material and technical factors. They are associated with the use of new equipment, new technologies, materials, and several employees. In the article “China’s Future Economic Potential Hinges on Its Productivity”, the author describes this method of increasing productivity on the example of China and the introduction of robotics.
In the first part of the article, the author enumerates the main factors on which economic growth depends: the number of employees and their available resources and their level of efficiency. According to the article, Chinese President Xi Jinping has made the country’s labor productivity and economic growth a priority. Therefore, the article describes an extensive type of economic growth the increase in the national product is achieved by attracting additional factors of production, that is, quantitative factors, namely a larger number of employees, greater use or use of resources, a larger volume of capital investments. Due to the text, his goal to improve China’s productivity is good, but on the other hand, many observers believe that he relies little on market forces. Then the article illustrates the GDP growth in China from 1980 to 2010 (“China’s Future Economic Future”, 2021). These data are followed by the conclusion that it has slowed down significantly in the last decade. The article highlights the fact that many analysts agree that China’s economic model is wasteful and this is evidenced by the growing debt.
The next part of the article talks about the need to increase GDP growth. Based on this, the government has put forward a list of 32 points to improve productivity. The most important three points were the modernization of industry, urbanization in new directions, and subsequent reforms. Consequently, the government offers two grandiose goals for the modernization of factories. Initially, the development of independence in production, and then, the preservation of a large production base. The author notes that the government provides companies with advice and subsidies to ensure those information technologies are deeply embedded in all their operations. According to the article, the second part of productivity improvement is better urbanization, for example, larger agglomerations. Due to the text, the idea is to benefit from the agglomeration without monstrously congested highways, congested schools, and other disadvantages of a big city.
Next, the author reflects on whether the proposed economic model for increasing productivity will work. The article raises the problem of limitations of technological processes on the part of the government. According to the report, the rules of large technological platforms are primarily related to making the economy more competitive, and therefore more productive. According to the article, another problem is the distrust of China from other countries. The opening of other export syndicates and the connection to the global trade did not contribute to productivity growth. According to the article, many countries restrict the export of critical resources, which significantly affects the Chinese economy.
At the end of the article “China’s Future Economic Potential Hinges on Its Productivity,” the author notes his conviction that all the proposed options will not significantly help China’s economic growth. Further, the article presents the data of the rating agency, according to which a full-scale desire for independence can reduce the growth rate of China in this decade by a third. Thus, the article represents an extensive type of economic growth. That economic theory concept is fully described and elaborated in the article. The author concludes that the only thing that can improve the situation of the Chinese economy is the ability to correct its mistakes. Another good sign for the author is their great ambitions and obsession to increase productivity and economic growth.
Reference
China’s Future Economic Potential Hinges on Its Productivity. (2021). The Economist.