The Negative Effects Of Chinese Trade In China

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China’s trade with the world grew substantially in the first three decades of the 20th century, marking a historic time for the country. In the 1840s, the Chinese economy was strongly closed; however, when Great Britain and other powerful countries pressured their economy, China was willing to open international trade within their own economy. Over the next 60 years, China experienced a small opening of trade amongst other foreign powers, allowing transactions amongst foreigners allowed. The funded railroad aroused industrialization, as well as publicity and overseas shipping (Yan, 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). The Chinese economy had many transformative effects due to WWI. One of the main reasons as to why this happened was because it challenged trade in the many other places in the world, offering many different beneficial aspects to the Chinese economy. China’s exports saw a dramatic increase because of this. Exports between countries like the United States increased at a substantial rate, starting off at an annual rate of 6 percent before WWI, dramatically rising to 27 percent after the war began (Yan, 2014). China’s top ... ... middle of paper ... restricted area (Xu and Dong, 2009). China, over the years, has come to good terms with producing and exporting lesser-skilled-intensive goods for foreign nations. China’s premium in skill rose at the beginning of the 20th century, flattening out the prices of exports around 1929 (Yan, 2014). It is shown in data that if there is no change in the overall final product of workers, and imports vs. export prices become neutral, that China’s labor skill level will fall in correlation. Data also shows that the exported items (coal, cotton yarn, raw silk, bristle, agricultural goods, etc.) in which use more of an intensive form of unskilled labor, will experience a dramatic increase in their growth of prices. Depending on the supply curves for labor, wages of skilled vs. unskilled workers will be determined on the overall demand for each type of worker. (Yan, 2014).
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