Scott, Robert E. “The China Toll.” Economic Policy Institute. 23 Aug. 2012. Web. 8 Dec. 2013. http://www.epi.org/publication/bp345-china-growing-trade-deficit-cost/ U.S. Census Bureau. “Trade in Goods with China.” U.S. International Trade Data.
Relevance According to the International Monetary Fund (IMF), World Economic Outlook, advanced economies with deficits will need to compensate for decreases in domestic demand with increases in international exports. Emerging markets such as China and India will compensate by shifting from international markets to their own domestic markets. The IMF has also projected that China will overtake the US economy by 2015 and India is expected to be equal in size to the US economy by 2020 (International Monetary Fund (IMF), 2011). It is clear that the continued expansion of China’s and India’s economies places them as a dominant economic forces that Multinational Enterprises will have to compete with for market share in China, India, emerging markets and domestically. Professor Khanna in his article China + India the Power of Two emphasizes the importance of businesses gaining a competitive advantage by not only looking at China and India as separate countries but by developing business strategies that consider China and India as major trading partners.
(2012, February 16). Doing business in china: cultural differences to watch for. International Business Times. Retrieved from http://www.ibtimes.com/doing-business-china-cultural-differences-watch-411996 Localizasian. (n.d.).
Huawei, a Chinese telecommunications equipment and services company established in 1987 in Shenzhen, China, has drawn worldwide attention in the recent years. Although many people have not heard of it or even pronounce its name right, the fact that Huawei has become the largest telecommunications equipment maker in the world cannot be overlooked. Benefiting from the Chinese economic reform led by Deng Xiaoping, Huawei gained the opportunity to develop its overseas markets; however, it was not enough for a small company like Huawei to achieve incredible success. Undoubtedly, Huawei’s worldwide achievement is due to many cumulative factors, yet, among all of them, the most important factors are the unique strategies Huawei has adopted, especially in globalization process and labor force. Those strategies, to one’s great astonishment, have striking similarities with the philosophy of Mao Zedong, who is regarded as one of the greatest leader in China, while a controversial figure in the Western culture.
In the late 1970s, China was ranked twentieth in terms of trade volumes in the whole world as well as being predicted to be the world’s top nation concerning trading activities (Kaplan, 53). This further predicted the country to record the highest GDP growth in the whole world. The massive increase in the Chinese trading relations was fueled by the United States in the year 1979 through the normal trade relations between the two countries. In addition, the Chinese non-concession to the World Trade Organization (WTO) in the year 2001 also facilitated its trading activities with different countries including the United States (Kaplan, 57). However, trading relations with the Chinese have been uneasy resulting from the massive trade imbalances in the recent past, which grows exponentially.
During the 20th century, the world believed that the renowned cities of the United States would provide modern spectacles emanating with futuristic qualities. However, within the past decade, the influence of China has creeped into the party of global dominance, establishing their footing on an international scale at a significantly alarming rate. In China, you can now experience the tallest skyscrapers, the newest airports, the fastest highways, and the best electricity grids in modern technology (Roasa). China’s evolution of success on the global scale is implemented by their supremacy in the economy through the labor of their workforce, which ultimately instills political power available at their fingertips. With this underlying superiority, the impact of China’s influence of economic power can affect international political and societal aspects, as they establish their economic empire in roots all over the world.
40, January 2013, http://www.hoover.org/publications/china-leadership-monitor/article/137951. Hatton, Celia. "What do Chinese leaders do when they retire?." BBC News. http://www.bbc.co.uk/news/world-asia-china-21783353 (accessed January 28, 2014).
The New York Times. Wignaraja, G. (2012) . Do Exporting Firms in the People’s Republic of China Innovate? ADBI Working Paper 365. Tokyo: Asian Development Bank Institute.
The United States and Chinese trade relation dates back in the year 1971 when these two countries re-opened doors to each other (DoS). Though the relationship of these two economies has been seen to be somewhat un-easy especially due to their recurring trade wars, there have been some significant milestones of mutually beneficial relationship. According to USSB, the trading volume from the year 1971 has significantly been on the rise both in terms of Exports and imports; up to to levels of US Dollars 532.2 Billion in 2012 from a low of US Dollars 4.7 in million in 1972. In a recent wave of discussion on CNBC of how the “Trade gap between these two giants has cost the United States a whooping US Dollars 37 Billion in wages”. The increasing deficit between the two giants has been linked to the loss of wages up to the highs of US Dollars 37 Million in the year 2011 (Holliday).