But nowadays the economy does not continue to develop. here's some reasons. Of course, there are positive effects on global society. China has become a high –ranked economic country through 20 years’ fast development, and has affluent labors. But still, its GDP per person is low so it is likely to be developed and continues to grow.
Trade liberalisation and the reduction in bureaucracy has enabled overseas firms to enter the Chinese market to take advantage of cheap and vast labour, creating millions of jobs. However, the privatisation of state-owned enterprises in the face of international competition as well as economic restructuring has also simultaneously led to mass job losses, especially in rural areas, posing a challenge to the Chinese economy and the government. During the period 2009 to 2015, China’s urban unemployment rate averaged 4.8% which is lower than the world average of around 7%. However, the real unemployment situation is likely to be more serious as migrant workers and newly graduated students are not included in government statistics on unemployment. As well as this, China has had historically low levels of unemployment, thus, a trend of increasing unemployment levels indicates a worsening situation.
Economic growth caused the housing bubble, which could bring down the economy. China’s growth also spurned the idea of protecting the environment that has caused pollution and environmental issues. The Chinese economy does not have a great economic future due to political corruption, the housing bubble, the pollution and environmental issues, and the loss of their comparative advantage. The economy of China has been growing for the past three decades but recently it has been stagnating and that could be sign that end of the growth is near. Last year’s growth of 7.7% is “slightly above the market expectation” of 7.6% but that would have been the lowest number since 1999 (Wang 2014).
The main reason for moderation in China is because they are so much more focused on production rather than consumption. Last year, China’s consumption accounted for 35 percent of their economy; a little over 10 years ago, it was rated that 50 percent accounted for their overall consumption (Reich, 2010). Foreign exports and imports arose dramatically, increasing the yearly expansion rate of trade to about 7.4 percent. The Chinese economies share in world trade grew a little under 2 percent from the late 1800s to the mid 1900s. By the early 20th century, comparative advantage was presented all throughout their economy (Yan, 2014).
China is the second largest exporter and holds the largest foreign currency reserve in hand. China's account surplus reached 11% of its GDP as of 2008. All of these successful and positive economic indicators increased the global expectations of China. Even though China was extremely responsive in its own borders, during the 2008 G2 submit, China displayed very low-key appearance in front of the world. 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.
Romeo Ardimento 9745 7U AP Comparative Government Mr. Polazzo Pd. 7 Mini-Paper 2: Chinese Economy vs. Russian Economy China is a communist nation and Russia is a formerly communist one. Both countries have undergone major economic reform over the years, however the results have been markedly different for each nation. China's Growth Domestic Product is sky rocketing at a rate of 7.8% annual change per year and managed a GDP of 8.227 trillion USD in 2012. (Due to China's enormous population (1.351 billion), however, China's per capita income is below the world average (6,091.01 USD).
Although America’s economy is growing as time goes on, China’s economy is also growing. China’s growing rate is higher than America’s, and if this continues, China’s economy will soon pass America and takes its place as number one. Before Bill Clinton presidency, America was in a economical deficit state but after Clinton presidency the country was in a economical surplus, but when George W Bush left office, America was in an economical deficit because the government has been overspending and spending more money than they receive from taxes. This shows a trend, because America has went from a deficit to a surplus and back to a deficit. This deficit had only worsen until 2013, where the economy finally began to rise again which shows the trend of rise in economy again.
China has recently fallen into an economic slump. Because it is so involved with other countries around the world, this economic slump that China is going through is also affecting the other countries as well. The environment has also been affected negatively by globalization. There are many polluting industries, wastes, ecologically destructive practices, and air and water pollution. The reason this is happening is because people see China as a vastly growing country, corporations and companies want to move there because of the great opportunities they see to grow.
Only currency and capital controls, many experts believe, immunized China from the contagion of the Asia financial crisis of 1997 (Engardio 203). China’s growth has dazzled the world, but the waste of money has not been as publicized. The profits from export trade and captive savings from its people China can invest recklessly. More that $3 trillion is placed inside Chinese banks, earning paltry interest, because the country’s capital controls and undeveloped capital markets prevent savers from investing it elsewhere (Engardio 205). China’s four biggest banks and thousands of local lenders have allocated the country’s cash poorly.
China’s Gross National Product (GNP) grew 7.2% annually from 1978 to 1990, averaging 9.7% per capita from 1982 to 1988 and was among the best in the world . However, “past growth is a poor predictor of future performance” and the considerable volatility in China’s economic growth has prompted the question whether this growth is genuinely sustainable. China’s high savings rate, its advantages as a developing country, as well as its disciplined and literate labour force should prove its critics wrong. However, there are other underlying factors which determine the sustainability of growth such as the type of growth, the state of the environment and the transition of the economy from planned to market. China’s growth may not appear to be as sustainable when these factors are also taken into account.