Reducing poverty and achieving economic growth in China
Labor –intensive export substitution sub-phase made a significant contribution towards reducing poverty and achieving economic growth in China. Between (1963-1972), Taiwan(China) noted the considerable performance of increased growth as well as improved equity. The increased performance is attributed to enhanced powerful export drive, equalized domestic, and inter-sectoral growth. In China, increased labor productivity and comprehensive agricultural research integrated with shifts in the composition of farming output significantly contributed to the robust growth in agricultural production. Also, nonagricultural employment increased in both Korea and China enhancing economic development and reduction of poverty. Both farming and nonagricultural boom was attributed to the equitable distribution of resources, labor allocation, and the changes in output. Most impoverished farmers actively participated in rural industrial and services activities hence leading to economic growth. The agricultural industries and services demanded increasingly labor-intensive due to increased food processing activities.
Government policies in China favored economic development through positively responding to needs in research, extension, and marketing at various levels, including provinces, towns, and countries. Due to a politically stable government in China, it was able to invest in transport, power, and communication hence improving the initial conditions. The government policies advocated for infrastructural investments in both urban and rural regions. Through government policies, power systems in both urban and rural areas were significantly subsided hence fueling economic growth. Also, the plans by the China government positively impacted on the nonagricultural activities by establishing various export- processing regions. The transition induced by government policies shifted the economy from domestic to external orientation. In South Korea, the positive impacts of government policies were less compared to that of China government on economic growth as they initially focused on urban expansion hence rural lacking behind in development. Regardless of ineffective political stability, the government of South Korea made a considerable contribution to economic growth through its policies.