Strengths And Weaknesses In China

Decent Essays
China and Japan are both countries with different strengths and weaknesses. China’s economic problems may not be the same as Japan’s. Each country follows the principles of their own economic system, which means different problems will arise.
In recent years, China has surpassed USA as the world’s largest merchandise trader. Their exports and imports combined was worth up to $4 billion USD. They are importing huge quantities of raw materials, and exporting huge quantities of manufactured goods. Although China’s economy has been growing slower than others, it remains as one of the largest contributors to world GDP growth. One of the main causes to China’s slow GDP growth is their overinvestments. In 2015, investments made up 43.3% of China’s GDP, while household consumptions only made up 38%. The imbalance between these two has widened China’s debt. Keeping up with high levels of investments require a lot of credit, causing China’s debt to grow to over 250% today. A couple of years ago, China started to heavily invest in steel. The Chinese government encouraged the investment because steel was used in automobiles and infrastructure, and the demand was high. China became one of the world’s largest steel producer, and holder of spare capacity. However, in recent years, the demand for steel has declined. China was left struggling with declining demand, overcapacity, and a growing debt because of a tight credit. China has been cutting down excess steel capacity. More than 65
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