Introduction The export sector is an integral part of China’s economy since it accounts for nearly 35% of the country’s GDP. Despite its importance, depending on export earnings is considered unsustainable in China. This research paper will evaluate the role of the export-led growth strategy in China. The study will answer the following questions. First, what is the contribution of exports to China’s economic growth and development? Second, what are the challenges associated with China’s export-led growth strategy? Third, is the export-led growth strategy sustainable in China? Finally, which strategy should the country adopt to address the challenges created by the export-led strategy? Contribution of Exports Economic Growth and Development China’s economy grew at an average annual rate of 10% in the last three decades. In 2011, China became the “second largest economy in the world after overtaking Japan” (Xing 2-12). This impressive achievement is mainly attributed to the export-led growth strategy, which the country pursues as part of its economic reforms. In order to implement the strategy, the government had to introduce incentives to attract foreign direct investment (FDI) (Xing 2-12). This involved investing heavily in transport infrastructure and cheap sources of energy. In addition, tax incentives were used to motivate local and foreign companies to produce for the export market. The government also devalued the country’s exchange rate, thereby improving the competitiveness of exporters’ goods in international markets by making them cheap. The resulting expansion of businesses and increase in FDI enabled China to maintain a double-digit growth rate for nearly thirty years. Poverty Eradication The export-led growth strategy has played a critical role in reducing poverty in China. Between 1981 and 2001, the proportion of China’s population that lived below the poverty line reduced from 53% to 8.5% (Xing 2-12). By 2012, only 5% of the population was living below the poverty line. Overall, approximately “400 million people have been lifted above the poverty line since the introduction of the export-led growth strategy” (Akyuz 2-22). The government of China focused on subsidizing exports, thereby enabling the rural populations that depended on agriculture to access external markets. This led to an increase in net income in the rural areas as shown in figure 1 in the appendix. The increase in household income enabled thousands of people to afford adequate shelter, education, healthcare, and other basic needs. Job Creation The export-led growth strategy led to a significant reduction in the level of unemployment in China. Several companies from the US and Europe have relocated their production facilities to China to take advantage of the opportunities created by the export-led growth strategy. One of the opportunities that attract foreign companies is availability of an efficient transportation system that reduce production and exportation costs (Razmi 1-33). In addition, increased investment in education by the government enables foreign companies to access cheap skilled labour. As FDI increased in the manufacturing and service industries, millions of Chinese were able