Most of these jobs are taken over by China citizens through outsourcing or companies re-locating to China. In addition, China has continually increased the percentage of debt the US owes it. The implications of this scenario are far reaching. Firstly, this scenario gives China a political leverage over the US. An increased amount of debt owed to China therefore works to counter the US influence in world politics in favor of China.
As a result of observing the economic data in China and the US, the business relationship of China and the US has really changed in some ways. One of the most significant cases is that the increase pace of foreign capital in China is slowing down recently. According to the database of the National Bureau of Statistics, the total foreign capital in China increased from 867.164 billion RMB in 2004 to 1,975.588 billion RMB in 2011, that is about 2.5 times multiplied. However, after 2008, the increase rate in total foreign capital dropped from averagely 18.9% to 5~6%. Referring to the inflation rate, it is actually not an increase but a decrease instead.
Almost simultaneously, great recession occurred in the U.S. and caused damage to U.S’s imports. This problem probably limited China’s exports, so I assume that great recession is the reason of stagnation and slight decrease. (This argument and argument B help explain thesis statement (c)) D. The WTO brought advanced technologies, which would boost process of specialization in China’s textile industry. (This argument help explain thesis statement
As long as wages are low, the United States will continue to gobble up products made in China, while Chinese consumers will prefer to buy cheaper, homespun alternatives to American products. The rise in trade deficit with China has come at a cost to jobs in the United States, accordin... ... middle of paper ... ...Institute in Washington who served as a staff economist for President Bush's Council of Economic Advisers. And with oil prices rising again, said Ashraf Laidi, chief currency analyst for the MG Financial Group in New York, "we can expect to see worse numbers to come." http://www.nytimes.com/2006/02/11/business/11trade.html?pagewanted=print Works Cited http://www.americanprogress.org/issues/2004/09/b193700.html http://worldnews.about.com/od/china/a/china_trade.htm http://goliath.ecnext.com/coms2/summary_0199-3700728_ITM http://worldnews.about.com/od/china/a/china_trade.htm http://www.epi.org/content.cfm/webfeatures_viewpoints_tradetestimony http://www.epi.org/content.cfm/bp188 http://www.census.gov/foreign-trade/balance/c5700.html U.S Census Bureau Foreign Trade Statistics http://www.nytimes.com/2006/02/11/business/11trade.html?pagewanted=print
While it seemed that china was coping with the effects from the International Financial Crisis fairly well, it is now being faced with additional problems as both Europe and Britain who make up for a vast majority of its clientele are also experiencing economic uncertainty. China’s exports, imports, and FDI inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. China’s real GDP growth fell from 14.2% in 2007 to 9.6% in 2008, to 9.2% in 2009 and currently in 2013 is 7.6%. According to Wayne M. Morrison, China has the ability to maintain a rapidly growing economy in the long run but this will depend largely on the ability of the Chinese government to implement comprehensive economic reforms and a rebalance of the Chinese economy by making consumer demand, rather than exporting and fixed investment, the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental protection. The Chinese government has acknowledged that its current economic growth model needs to be altered and has announced several initiatives to address various economic challenges.
Most US Senators feel that the revaluation move was too small and that China needs to allow the currency to increase in value, especially since 2.5% pales in comparison to the RMB’s predicted undervaluation of 30-40%. China is keeping its 0.3% percent daily trading band against the dollar, which means that even with this move there will not be a lot of volatility in the currency pair. China has many reasons to want to revalue their currency. The revaluation also makes imports cheaper for China. This comes at a critical time when commodity prices are rising.
Moreover, China was still artificially devaluating its currency to sustain its trade surplus, and increasing unnecessary tax cut/incentives on a large number of goods to encourage the exports to be more competitive in pricing. China’s policies were the great indicators that it did not display enough effort to show its global leadership role. After the financial crisis, large countries, including China, faced a decline in foreign demand. China, as the world’s largest producer, faced dramatic production decrease during the 2008 recession. In addition to this, domestic slow down in construction, decline in real estate sales and investments, soaring prices and low domestic demand caused major trouble in China.
Brendon Clair Dr. Ruben Berrios Econ 355, International Trade and Finance April 30, 2015 Impact of China’s Unfair Trade Practices on the US economy Investopedia defines unfair trade practices as “Using various deceptive, fraudulent or unethical methods to obtain business” (Investopedia). These methods include false advertising, tied selling and misrepresentation as well as other unlawful acts declared by statute. Over the past decade, the American economy has experience troubles. One of the main problems tying to the troubles over the past decade have been persistent trade deficits, most of them being with China. This trade deficit causes higher unemployment then desired by the American population.
Although China makes great economic achievements and improvements every year, the economic achievements is not that glorious when divided by the large denominator of population. B... ... middle of paper ... ... rate is 8.77‰( SFPCC) in China, it brings a population increase of 19,090,000(SFPCC statics), which equals a medium-sized country in Europe. As a result, overpopulation may not be that serious in some other countries, it does be the most serous social problem in China. In order to solve the overpopulation issue, the government should pay great attention to it. Some policies, such as “ One China policy”, have already been made in China.
This paper aims to argue why China’s surplus is neither good for China nor the U.S. in terms of “exchange rate manipulation” and “high savings rate”. Therefore, the intention of this research is to study how these forces may affect the economic development of both countries as well as their current consequences. LITERATURE REVIEW The economic relationship between U.S. and China has been expanding considerably over the last three decades. According to the World Trade Organization (WTO) data (2008), the total U.S.-China trade has increased from $5 billion in 1980 to $409 billion in 2008. Furthermore, in 2008, China was the second largest U.S. trade partner, its third most principal export market... ... middle of paper ... ... producer would be also convenient for the consumer.