Between 1949 and 1972, there was no trade between the United States and Mao’s Communist China. In late 70s, China went through economic reforms and global trade increase ten times. Since the late 80s, United States has had a bilateral trade deficit with China; annual deficits increase throughout the 90s, and increase rapidly in the first half of the 21st century (C. Fred Bergsten,Bates Gill, Nicholas R. Lardy, Derek J. Mitchell, 2006). At the beginning of 2008, America and China are each other’s second largest trading partner, while China has replaced Canada as the largest exporter to the United States. Today trade deficit with China is 28 times larger than it was during the Reagan era, according to new figures released by the U.S. Census Bureau.
For the past twenty-five years, China has witnessed an overall increase in its domestic growth (Fischler 148). According to the article, “The Rise of China as a Global Power,” by Dr. Rosita Dellios, China “is the world's fourth largest trading nation, rising from 32nd in 1978 to 10th in 1997.” Similarly, China’s GDP is also second to the United States of America, generating 13 percent of the world’s output (Dellios). Since China’s introduction into the World Trade Organization in December 2001, its average tariff dropped from 41 percent in 1992 to 6 percent in 2001, becoming one of the most open economies in the world (Dellios). China is also the world’s fastest developing economy, obtaining an annual growth of 9.5 percent through foreign direct investment, low labor rates, emerging markets, and growth expansion. (Dellios).
China's Great Economic Transformation (507-568). New York: Cambridge University Press. Coates, B., Horton, D., & McNamee, L. (2014, January 1). CHINA: PROSPECTS FOR EXPORT-DRIVEN GROWTH. Economic Roundup Issue 4.
The trade deficit of China caused economic depression in the States and the citizens blamed China for all the accompanied issues. However, China did not stir up the economic, racial and politic issues that America faced. According to the U.S Department of Commerce, in January of this year American imported $ 38,187 million and exported $ 10,357 million already made $27, 839 deficit in 2014. The total trade deficit was $318,417 million in 2013, when it was $226,877million in 2009 and $ 162.254 million in 2005. The imbalance has been rose every year henceforth China became the member of the World Trade Organization (WTO) in 2001, the Chinese economy was growing by 18% each year when the US below 3%.
13 Apr. 2014. Chien, Shiuh-Shen, and Litao Zhao. "Local Economic Transition in China: A Perspective on Taiwan Investment." China's reform in global perspective.
Background of China’s Economy and Coal Use China’s air pollution problem derives from its substantial economic growth. Currently, China has the world’s fastest-growing economy. It is the second-largest, after passing Japan in 2011. Since the global economic crisis of 2008, China’s economy has grown 40%, compared to the United States’ measly 0.5%. In addition, their stocks grow an average of 7% each year (Rapoza).
Why China Can Attract More FDI: A Response to "Competitiveness in India and China: the FDI puzzle" In 2008, a serious financial crisis swept the globe, causing many countries' economies sunk in depression or recession. After four years, some emerging economies, such as China and India which are the members of the "BRICS" (the acronym of Brazil, Russia, India and China, which are at a similar stage of newly advanced economic development), firstly got rid of the effect of this financial crisis. Therefore, these emerging economies begin to draw more economists' attention. Prime, Subrahmanyam and Lin researched the competitiveness in India and China through the foreign direct investment (FDI). In " Competitiveness in India and China: the FDI puzzle", Prime, Subrahmanyam and Lin (2011) applied the Porter's diamond theory to illustrate, the FDI puzzle, why China can attract substantially more FDI, although China and India have many similar factors (pp.
Since the early 1980s, China has been undergoing a dramatic economic growth through the reform and opening-market policy. China’s economy acquired an outstanding achievement, precisely, it had kept a continuous annual growth rate exceeding 9% for 30 years (Zhang et al., 2012: 393). Moreover, China overtook Japan to become the second largest economy by measuring Purchasing Power Parity by the end of 2010 (Yao and Zhang, 2011: 206). However, in the meantime, during the period of transition of the Chinese economy, it appears a fact that countering the traditional finance-growth theory and research literature, specifically, a rapid economic growth with a low efficiency financial system. This essay will argue that poor financial system can promote speedy economic growth in China that differs from common findings in the empirical literature.
1. Introduction Keynes published and introduced his economic theory in 1936, during the Great Depression, and gave guidance for government in formulation of monetary and fiscal policies. His model was widely acknowledged during recession times when classical economic model somehow failed to effectively and productively solve some economic problems such as unemployment. Although China’s economy is believed to have “Chinese characteristics” and cannot hastily adopt a Western model, Keynesian economics is still believed to receive embracement in China, as government intervention is wider and deeper than most of other economies of such large size. Therefore, the main issue this essay concerns with is the influence of Keynesian on China’s economy reflected by GDP.