I know we’ve already had a few postings on China, but it’s hard to ignore them when their economy continues to grow. We’re still trying to get through this very tough recession, along with many other countries around the world, yet China continues to post growing numbers for their economy. According to an article on nytimes.com, China’s economy rose to 10.7 in the fourth quarter, which was up from a growth rate of 9.1 in the third quarter.
Over the whole year, the Chinese gross domestic product grew 8.7 percent, surpassing the 8 percent growth-rate benchmark that Chinese leaders assert is necessary to maintain social stability. If China keeps up that growth rate, it will very likely replace Japan as the world’s second-largest economy by the end of this year.
It really makes me wonder what it would be like if our own country was able to produce such fantastic numbers, instead of eeking our way out of this recession. It would be such a load off the shoulders to have a growing economy during a global recession, at least in my opinion it would be. However, Chinese officials have stated that much of their growth is a result of their exporting market and that they need to be able to transition to more domestic growth. They are also concerned about the possibility of inflation in the near future. The Chinese are also being criticized by other countries, including us, for their weak currency. The article mentions how the U.S., along with other countries, will be pressing China to strengthen it so they don’t have an unfair advantage in the export markets. I’m interested in seeing if this growth pattern will indeed continue, or if it will flutter out due to inflation and the inability to transition from exports to domestic consumption.
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I am also very curious to whether or not our country would be able to flourish financially the way China has given their circumstances. I can understand how their economy is so successful, because it is hard to pick up an item that was not made in China. I also agree that their weak currency gives them a very unfair advantage and it should definitely be strengthened in order to assure that every Country is being given equal advantages.
ReplyDeleteI am wondering the same thing. China's economy is at a whole different level than other countries. Looking at China's situation, what are the possible effects on China itself and the world market if it strengthen its currency. The price of production would increase and so the possibility exists that some workers in China will be laid off. Not only that, but China's economy will begin to feel the pinch of the recession because their traders in the world market might find cheaper goods elsewhere. On the world market, the goods produced in China will be more expense to consumers around the world, consumers would lose. But other producers would benefit because they would now have a fair chance to trade their products in the world market if China has a reduced comparative advantage.
ReplyDeleteI don't pretend to be an expert in this by any means, but I was under the impression that one of the main reasons why China's economy is fourishing so much is because of their amazing capacity to produce goods cheaply. The US has minimum wage laws and employee benefits that make our labor more expensive than Chinese labor. This seems to me like it would be dificult for the US to produce export goods because our labor costs are so much higher.
ReplyDeleteIt's scary to think of the possibilities of what could happen with a large-scale economic shift in China. In order to maintain our lifestyle we would have to make up for it somewhere else. We, as the primary profiters from China's exports, stand to potentially lose the most from a change in China's production.
ReplyDeleteIm most intrested in fiding out what will happen in the coming months with china, the government there recently took an unexpected step. They made it much harder to lend money, where originally it was flowing much more freely than the united states. The government stated that it was trying to prevent inflation caused by the flow of money and they are also trying to stem problamatic loans like those issued that caused the financial crisis.
ReplyDeleteThis risks the rapid pace of chinas growth, and has started to effect our own economy, most visibly is the reaction in the stock market which took a tumble on the news.
If growth is restricted in China it could set back the global recovery aswell, many financal and governmental institution were "banking" on china providing the world with an engine, not only in consumption and renewed market strength but production.