China's Economy and the Global Division of Labor

The globalized economy allows an efficient division of labor. The age of discovery in the late 15th century and the first half of the 16th century led to the establishment of mercantilist states and their colonies. And the age of machinery set apart the industrial states from agricultural economies in the late 1760s. And from the late 19th century to World War II,the world embraced the age of electricity,with its distinctive patterns that separated developed and developing countries.

Since World War II the revolution brought about by new sciences and technologies has separated countries by their different positions in the global value chain.

While the West needed hundreds of years to make these changes,China completed much of this lengthy process within a mere three decades. Now it finds itself near the top in many areas of development. Its manufacturing capacity,production value and output volume all rank first in the world. In terms of the total volume of its imports and exports as well as the size of its foreign exchange reserves,it also put is at the head of the global list.

China is now the world's second largest economy. From 1978 to 2011,its average growth rate was 9.9% (the pace slipped below 8% in 1989