Why China Slows Down Its Economy Essay

Globalization has, for better or worse, altered the economic arena for every country in the world. For many less developed countries, globalization has leveled the playing field so that their economies can compete with the larger, more developed ones such as the United States and other large western economies. For instance, technical engineers in India and China are now just as qualified as engineers in America, but at half the cost. The once large and prosperous service sector in the United States as well as telemarketing services have largely been sourced to India as a large exodus of American multinational corporations find cheaper workers who deliver comparable quality. This then seems to be the essence of globalization - businesses

It is this that has sparked China’s vulnerability to external shocks. In 2011, China’s exports amassed almost $2 trillion, however in Feb 2012, China recorded a $31.5 billion trade deficit as a result of the European sovereign debt crisis in which China’s main trading partners plunged into recession. China’s severe BOGS decrease is an attempt to control growth and a sustained level of 7.5%. Investment policies are also critical for China to achieve economic growth and development. Foreign Direct Investment (FDI) in China is being sought primarily in the redesign of State Owned Enterprises (SOE’s) and in the development of interior provinces. Between 75-80% of World Bank loans to China in 2008 were directed to the central and western regions, the most economically disadvantaged. This promotes increased wealth within China, leading to higher levels of development due to a more positive Human Development Index (HDI), which currently sits at 0.687, up from 0.677 in 2010. Thus, trade and investment are critical factors in ensuring that China’s growth remains sustained at 7.5% whilst still encouraging increases in development.

There is no doubt that increasing in international trade is supporting the economic growth across the world, raising incomes and creating jobs. However, international trade can also some create economic obstacles, such as the international context and the market policy and regulations of each country, and consequently it can be said that the effects would have positive and negative sides, and it is useful to mention all of them and to take them into consideration.

Since the reform and opening up, the economy of China grows significantly, as an emerging economy, China's economy has made tremendous contributions to the global economy, and Renminbi has become one of the most important currency in the world. According to the survey conducted by China National Bureau of Statistics found that from 1979 to 2012, China has attained an annual average growth rate of 9.8% for its national economy, while the annual average growth of the world economy is only 2.8 % during the same period. In past 30 years, China's GDP surpassed Japan’s, China became the world 's second largest economy, in addition, the huge total volume of trade makes China become the world 's largest trading nation. The contribution of China’s

Together China and India attributed to prosperity and there are mutual economic benefits. Both countries have formed stronger economic bonds. They have openly cooperated with one another in multi-lateral trade negotiations. As emerging economies continue to grow, there may be a further decline in the share of world output and world exports accounted for by the

China’s economical strength comes from its international trades as the economy has grown to a rate of 10.3% in 2010. It has become the world’s largest exporter in the global economy. In the

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

China, the most populous country in the world, has experienced an abnormal growth rate in Gross Domestic Product over the past decades. However, facts and statistics indicate an economic growth slowdown of the Asian giant.

The importance of international trade increased dramatically for the US as well as China. The ratio of the sum of exports and imports to GDP approximately doubled from the early 1970s to the mid 2000s for the US. And there is a striking feature that China was involved in about 7% percent of world trade by the mid-2000s. There is no doubt that the international trade have influenced the wage level around the world.

The author highlights in this article the issue of China's trade imbalance. According to author, the trade imbalance of China is now vanishing, which he has proved by evidences. The initial paragraphs of the article explain how some policy makers and economists of America blames China and holds it responsible for its Trade Deficit (Trade and Forfaiting Review, 2012). Indeed Americans want to Punish China for hooking the exchange rate to the dollar in 2005, in order to subsidize exports, which resulted in big trade surplus that cost the jobs of America (Wolverson and Alessi, 2011). America has many plans to

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.

Export was the main growth from 1994 in China, but China has new growth engines in recent years. In addition, China has made some reforms in social, politics and economics for a better development. Some people think China did a right decision to get new growth engine and to reform, which can deal with many issues that prevent China from growing better at economy. However, some others against that China changes to a new growth engine and makes these reforms, because China grow faster and faster these years. Thus, this paper will discuss in two parts: one is the origin and reason of export to be main growth in China during past several years, and also what the new growth engine is with its effect. The other is the influence of three reforms for sustained strong economic growth in the future.

The economy of China has been on the rise at a rapid rate for more than three decades. Most of this growth higher productivity of labor highly contributed to this economic growth. On the contrary, as the economy widens, rate of employment diminishes along with a steady increase of the youth population. This paper focuses on understanding the efforts that led to the growth as well as the setbacks that China might encounter over the coming years. The challenge would be to maintain its rapid leap of economic growth. Key questions consist ofhow China will sustain its investments; whether these investments will lose productivity as the labor - capital ratio keeps on rising, whether employment rates will sustain urban migration.In the bottom line scenario, growth of the economy falls steadilyat a rate of six and a half percent by the year 2030 from the current ten percent (Chowand Kui-Wai 146).

Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-13 Exports as a Percentage of Chinese National Income Exports / GDP in % 45 40 35 30 25 20 2004 2006 2008 2010 Source: OECD 2013 Dr. Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-14 Imports as a Percentage of Chinese National Income Imports / GDP in % 35 30 25 20 2004 2006 2008 2010 Source: OECD 2013 Dr. Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-15 Chines Exports to Selected Regions as Percentage of GDP Source: OECD 2013 Dr. Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-16 Chines Imports from Selected Regions as Percentage of GDP Source: OECD 2013 Dr. Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-17 Growth in Chinese Exports less Growth in World Markets 2000-2012 Source: OECD 2013 Dr. Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-18 Current Account Balance of Payments as Percentage of GDP Balance of Payments / GDP in % 4 3 3 2 2 1 1 0 2004 2006 2008 Source: OECD 2013 Dr. Thomas Schuster Ningbo University International Trade WS 2013 / 2014 1-19 The Gravity Model Three of the top ten trading partners with the U.S. in 2008 were also the 3 largest European economies:

It has a severe shock in export in China. The number of exported orders decreased sharply. Between January to August in 2009, China’s foreign trade export 730.74 billion which down 22% year on year. At the same time,general trade import prices fell by 22%, imports increased by 4%, processing prices fell by 6.1% and imports