GNP growth rates in developing countries are on average higher than those in developed countries. Moreover, the difference became even larger in recent years because GNP growth in developed countries slowed from more than 3 percent a year in the 1980s to about 2 percent a year in the first half of the 1990s. Low-income countries appear to have performed much better during this period, with GNP growing by almost 6 percent a year between 1980-1995. So, the way it looks, the poor countries have a good chance of catching up with the rich countries. Between the years of 1980-1985, GNP per capita grew by about 3.2 percent a year in India and in China by an remarkable 8.3 percent a year. Rapid growth in China and India explains why more than half of the world's population lives in economies .
growing faster than 2 percent a year. .
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In 1978 the economical structure of China began moving from a slow Soviet type economy to more of a market oriented system. The system still operates within a confinement of strict Communist control but the economic influence of non state organizations and individuals has been moderately increasing. The authorities have switched to a system of household and village responsibility in agriculture rather than the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small scale enterprise and smaller manufacturing, and opened the economy to foreign trade and investment. The result has been a quadrupling of GNP since 1978. In 2002, with its 1.28 billion people but a GNP of about $4,600 per capita, China was recognized as the second largest economy in the world behind the US. Agriculture and industry have reported major earnings, especially in coastal areas near Hong Kong, where foreign investment has helped promote output of both domestic and export goods. On the flip side, the leadership has often experienced in its system the worst results of socialism and of capitalism.
