The Impact Of China's Economic Rise In China

The China Boom: Why China Will Not Rule the World, by Ho-fung Hung. New York: Columbia University Press, 2016.

With a gross domestic product (GDP) calculated at the equivalent of $11.06 trillion and an average growth rate of 1.84 percent, China has the potential to surpass the United States' economy by the year 2030 (citation 1). China's rapid GDP growth is caused mainly by state investment, high exportation, and successes with e-commerce (citation 2). However, China was not always a country eager to open its doors to economic opportunity. Instead, the government strove to maintain self-dependency and to limit influence from other countries. Through the decades of isolation, many countries attempted to gain trade relations with China. These attempts usually were unsuccessful. It wasn't until the late twentieth century until China began forming the economic

China, the second leading exporter in the world, is known for their immense role in the United States economy. Without China’s contribution to the U.S. economy, the United States would suffers tremendously. This is the same case for China, the contributions from foreign companies is a big reasons for China's success. The relationship between these two superpowers were not always very strong. For years the United States trade system was not a very compelling situation for other countries to do trade. As the United States evolved into the superpower country they faced a lot of complications. For the United States of America to remain one of the world’s most powerful countries a strong relationship with China is a necessity. The continuation of

Moreover, after setting up economic institutions and an industrial base, Deng Xiaoping established various Special Economic Zones in China that allowed for increased foreign investment, helping to develop China’s commercial growth. As described before, when Deng Xiaoping came to power, his goal was for China to fulfill the Four Modernizations: modernization in agriculture; industry; science and technology; and defense. Deng believed that the only way China could keep up with Western countries was if China achieved the Four Modernizations. Specifically, in order to achieve the Four Modernizations, Deng had to fulfill a two-step goal. The first stage was to build up economic institutions and to set up a strong industrial base, both of which had been denied to China during Mao’s Cultural Revolution. The second stage of the Four Modernizations was China’s emergence from isolation and integration into the global economy, both of which were crucial for China’s commercial economy to develop. Deng Xiaoping’s biggest accomplishment was his achievement of this second goal. Specifically, the period of time when Deng reformed and opened up China to the world is known as 改革开放, which is pronounced Gaige Kaifang. What separated Deng Xiaoping from other leaders in the past was that Deng’s method of thinking was very pragmatic. He recognized Mao as a hero to modern China, but also believed that some of Mao’s policies were wrong. Deng’s famous quote was: “黑猫白猫抓住老鼠就是好猫,” which translates to

Two Years after the death of Mao Zedong in 1976, it became apparent to many of China's leaders that Economic reform was necessary. By 1978 " Chinese leaders were searching for a solution to serious economic problems produced by Hua Guofeng, the man who had succeeded Mao Zedong as CCP leader after Mao's death" (Shirk 35). As Susan L. Shirk describes the situation in The Political Logic of Economic Reform in China, restoring the CCP's prestige required improving economic performance and raising living standards. After the communist take over the country, Mao contained his emphasis on moral force by demanding that Chinese citizens demonstrate what he referred as "correct consciousness".

China’s sudden growth and rise to an economic superpower has affected the worldwide economy, the worldwide environment, and its own private industry in ways that may have longstanding effects for the future.

Even though, the future prospects for the economic growth of China are negative but the rapid growth of the People's Republic of China, in economic terms, since the reforms of 1978 is undeniable. Chinese economy has an average Gross Domestic Product (GDP) of 9.37 per year. In addition to that, China has also become one of the major contributors in the world economy and has shown tremendous growth even in the times of recession as well. (Holz 2005)

The following paper coherently illustrates the trade patterns of USA and China and describes the various trade policies developed over the past years that have impacted the respective economies of both countries alongside the effect of the same on the bilateral trade relations between the two. Based upon the previous statistics, US-China trade is considerably one of the largest trading partners in today’s economies. Both countries’ trade relations entail exchange of investment, services as well as goods varying from agricultural products to non-agricultural products. Currently, China is the second-largest trading partner, third-largest export market and the biggest source of imports for the United States. The U.S.

Chung (2012) declares how South Koreans’ perceive China’s rise is the policy position Beijing takes on North Korea. Chung supports his claim, noting Seoul’s disappointment in Beijing’s policy stance over North Korean aggression in 2010, which raises new security concerns over Seoul’s growing trade imbalance with China (Chung, 2012, 220). Chung reminds readers of how China used its economic leverage over “Japan’s heavy dependence on China-produced rare earth elements in the row over the Senkaku/Diaoyutai Islands in 2010” (Chung 2012, 221). The failure of Bejing to denounce a North Korean lethal shelling of Yeonpyeong, and sinking of a South Korean ship, both in 2010, calls into question how much “a fair and honest broker” China might be in reunification negotiations (Chung 2012, 224). Chung concludes that 2010 marks a downward turn in Sino-South Korean relations. Bejing’s behavior over North Korean aggression brings to light Seoul’s economic dependence on, at “21 percent in 2010,” China, and as a new security threat to South Korea (Chung 2012, 220-233).

The article I chose describes how the Chinese economy copes with its worst economic slow down in 25 years. The article said that the recent figure shows that growth has slowed sharply and deflation set in. The property market has dropped drastically and factory production is at its weakest point science the 2008 global crisis. In the first three months of 2015, GDP grew at "only" 7% year-on-year, which is pretty small compared to the “usual” 9% growth. Growth for 2015 will probably be the weakest in 25 years. Some pessimists said that China’s economy is about to crash after three decades of rapid development. But the article argues that china’s economy is stronger than they thought and is going through a quiet financial revolution.

In the recent past, China’s economy has grown at a high rate attracting the attention of the foreign investors. Its gross domestic product has also been high, with the year 2014 recording the highest figure of over ten percent of the world’s economy. The overall structure of its economy has also improved; the unemployment rates have gone down with prices rising at a moderate rate. It is always clear that with a high rate of unemployment within a country, the income levels also tend to be low affecting the living standards of the people, which in turn results to lower productivity levels in the country. Regardless of maintaining a positive balance of payments, the country’s economy also faces some challenges. “China’s economy is facing economic challenge regarding possibilities of deflationary risks” (Mulroney 15). Its economy is also experiencing relatively high costs incurred during the financing of the enterprises. The local governments are overburdened with massive amounts of debts that need to be clear. All these challenges are slowing down the rate of its economic growth.

Since initiating market reforms in 1978, China has experienced enormous and rapid economic growth, become one of the world’s largest economies. The seeds of this rapid economic growth were planted in 1978 when the Chinese Communist Party started to introduce capitalist market principles. This was done by moving from a centrally planned to a market based economy. The shift away from traditional Marxist policy created a scarcely concealed capitalist culture in China masked by a communist facade. One can argue that with wealth comes a much higher level of education. The economic development in China has created a society that is better educated and paid. Citizens are developing much more politicized views and are more actively expressing their opinions. If the economic inequality caused by their current specialized private sector continues to grow, the citizens, now increasingly aware of their rights, will be less likely to accept the domination of the state. Finally, due to the internet, the nationalism that has historically helped Communism to remain the dominant ideology in China is decreasing. Younger generations are experiencing a culture shift that favours a more democratic lifestyle. Globalization and the growing entry into foreign markets will create pressure for China to abandon their communist political self-identity, transitioning instead towards democracy.

Economic growth means the increase in the real GDP over time. It can be caused by an increase in an aggregate demand or aggregate supply. However, long-term economic growth mainly results from an increase in aggregate supply for instance increased capital, etc. Growth accounting is the tool to estimate the contributions from various sources to economic growth. It is the growth of GDP explained by weighted growth rates of other variables. It should be cleared that the growth rates of other variables need not to be the final explanation of GDP growth (Holz, 2008). It is given by: ΔY/Y=ΔA/A + α.ΔK/K + (1-α) ΔL/L. How long run aggregate supply impact growth is shown below.

China remains a huge and growing economy. But projections that it will overtake the US seem fanciful. US is well ahead of China on most indicators related to living standards and quality of life.

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities, towns and villages.