Is China A Largest Economy?

1684 WordsApr 10, 20177 Pages
On global standards, in the consideration of growth, Chinas economy is impressive. However, within the nation itself, the economy has not been able to achieve the government standards it wants to during the past few years. The capability that China has to become the largest economy in the world is evident due to the fact that China is the second largest economy and with that power, everyone is looking at them to see how they are going to survive in the years to come. Their economy grew 6.7 percent in 2016, which is a 2 percent decrease from 2015. This may appear unfavorable at a glance but it is within China’s target range; therefore, a two percent decrease does not affect them much in the long run. China has to be able to reflect on what…show more content…
After cuts to over-capacity, prices are recovering. China plans to cut excess industrial capacity and try to increase foreign investment. China’s goal to be within the 7 percent and 6.5 percent of the yearly goal seems to be attainable with the retail sales increasing, the weaker monetary value of the yuan, and state-led investments. Past weaknesses have been getting stronger concerning household consumption of real estate and heavy industry. Deflation occurred for about four years, but economists’ predict the increasing producer prices to peak at 4 percent and then average at 2.5 percent through the year. Comparing this to their last prediction of a 3.1 percent in the first quarter and a 1.6 percent of the total of 2017, there is a significant difference. Other nations can also help with the aid of China’s New Year economy. The United States policies, through tax cuts and infrastructure spending, will help increase (proactive) fiscal stimulus and therefore benefit China in the long run. However, the financial situation is still at risk due to a sharp decline in China’s foreign exchange reserves. The stockpile decreased to $3.05 trillion which was a total loss of $69.1 billion. However, with a 6.7 percent growth over three-quarters, these problems seem to dwindle in concern. China’s Decrease in Money Exports There has been a significant decrease in money leaving the country. There has been a $1 trillion drop
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