Economics 4 Marks Question

The one child norm introduced in China in the late 1970s has been the major reason for low population growth. This measure led to a decline in the sex ratio defined as the proportion of females per 1000 males. One child norm and the resultant decline in the growth of population has also led to an ageing population in China. After a few decades, there will be more elderly people in proportion to young people in China. This will force China to take steps to provide social security measures with fewer workers to contribute actively in the economic activities.

1. Free trade between India and China: The border disputes between China and India have been simmering since 1962. Despite the lingering border disputes, both India and China have been strengthening their economic ties in recent years. Officials from both countries have said they hope that improved trade relations will bring about a quicker resolution of political differences.

The Chinese Prime Minister has expressed Beijing's desire to develop a free-trade area between the two countries. With combined population of more than 2 billion, such a development would create the world's largest free-trade zone and help in industrialisation and bring about faster development in both the countries.

2. Free trade between India and Pakistan: For the first time in 50 years, the Pakistan government has cleared the duty-free import of onions, potatoes, tomatoes, garlic and livestock through the re-opened land route. India, on the other hand, is free to import lentils, cotton, sugar and dry fruits from Pakistan. But there is fear and uncertainty of informal trade with Pakistan.

India's biggest concern is that the Pakistani Government is unstable and unreliable. But with recent fall in tensions between the two nations, both countries stand to gain from informal trade.

1. China is able to lead in almost all the Human Development Indicators with the establishment of infrastructure in the areas of education and health, land reforms, long existence of decentralised planning and existence of small enterprises which can be easily regulated.
2. Even before the reforms, basic health services were provided in villages and food was equitably distributed through the commune system.
3. Each reform was implemented on a small scale initially and then spread out on a larger scale.
4. Laws and policies, such as the one-child norm among others were strictly enforced.

The slow economic growth in Pakistan is attributed to the following reasons:

1. Inward-looking economic policy and high protection to domestic industry did not allow Pakistan to take timely advantage of globalization.
2. Due to the mindset of the politicians and the bureaucrats controls continue to be preferred option than freedom of choice of the producers and the consumers. This has led to the growth of the private sector which thrives more on contracts, bribes, loans from public financial institutions, tax evasion. lobbying etc. instead of facing competitive market structure.
3. A higher fiscal deficit, due to huge borrowings by the government, is also responsible for the slow economic growth in Pakistan.

China introduced reforms originally in 1978 and then subsequently in a phased manner. In initial stage, it sought to develop the agriculture sector, foreign trade and investment sectors. In agriculture, the commune system was adopted.
Later the reforms were initiated in the industrial sector and collective agriculture and the commune system was phased out. The reforms were expanded further to include the gradual liberalisation of prices, fiscal decentralisation, increased autonomy for state enterprises, the foundation of a diversified banking system was laid, the development of stock markets, the rapid growth of the non-state sector and the opening of foreign trade and investment took place.
The one-child norm reduced the population growth rate significantly and helped in faster development.