The Positive Impact Of Consumption On China 's Economy

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The Positive Impact of Consumption on China’s Economy Diane Boccara Palm Beach State College ECO2013 Warren Smith 11/11/14 Abstract This paper first gives a brief overview of the country of China and its economical background. Then, it focuses on consumption as a market determinant of China’s recent change in economic growth. The paper analyzes the impacts of consumption and how it influences macro outcomes by comparing statistics and linking them to an increase in consumption. The Positive Impact of Domestic Consumption on China’s Economy Country’s Overview According to the World Bank, in 2013, China had a population of 1.36 billion and a GDP of $9.24 trillion in current US dollars. The country has the…show more content…
The effort put into this economic reform resulted in annual GDP growth rates of 10% for about 30 years (The World Bank, 2014). China’s economy has grown as an incredible rapid speed. System of Government The Government of China, known as the People’s Republic of China, is a communist system of government. This means the state has the ability to control economic decisions. Therefore, it is mainly the government that regulates the economy. The chief of state is President Xi Jinping, and the head of government is Premier Wen Jiabao (Central Intelligence Agency, 2014). There is a unique political system in place, and there is very little to no private ownership. This system aims for a classless society. Economy System Since the economic reform, China’s economy system was able to create a rapid growth of the economy, turning China into one of the world 's largest economies. As a communist state, the country has implemented a socialist market economy, which is based on the control by the state and an open-market economy. Describe Market Determinant (Internal Force) Consumption represents the spending behavior of consumers. It is the value of goods and services produced in a country and consumed by its population. It is mainly determined by current income, expectations on future income, savings and inflation. Consumption is normally the largest component of GDP. However, in China, this consumption has been neglected for many years
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