The China Plus One Strategy: A Signal of the Next Step of China's Economic Development

Abstract

China's economic growth over the past two decades has been a point of envy for developed and developing countries alike. China has been able to achieve this due to the policy focus of their government on trade liberalization and capturing foreign investment. This involvement by the government in aiding the national economy move up the technology ladder has been quite successful in stabilizing such rapid growth. However, recent government policies have instigated a new direction of the Chinese economy away from low-end manufacturing and more into high-end manufacturing and services, called the 'China plus one strategy'. This new direction initially showed no signs of problems for China's growth goals; however, the Financial Crisis was the final push causing a mass decline of low-end manufacturers in China. The resulting unemployment issue across urban and rural China has shown a significant weakness in the Chinese economy, namely that too many jobs are dependent on foreign consumer demand. Thus, China's future economic development will take on a new face of cultivating domestic consumption to support and stabilize jobs and strategic government initiatives like the 'China plus one strategy'.