Eco 2013 - China's Economic Prowess

Edwin Sunsin

ECO 2013

Prof. Sealy

25 June 2011

China's Economic Prowess

The People's Republic of China is the second largest economy in the world after the United States. China has become the fastest growing economy with an average growth rate of 10% for the past thirty years. It became the world's top manufacturer in 2011, surpassing the U.S. With China economy growing in an alarming rate, would slow down? I believe that China would eventually slow down soon. As every superpower nation, such as Great Britain during the colonial age and the United States after World War 2 we have seen their economic power slow down.

In the modernized world, China's influence in the world was insignificant until the late 1980's. The communist nation decided to have economic reformations in order to compete against great nations such the U.S, Japan and Germany. The leaders of China started using capitalistic ideas which were introduced during the late 1970's. With radical changes from state owned companies to private owned companies it led foreign market to establish in China. Foreign investment accounts 58-60% percent of China's imports and exports. The main export partners include the United States, Hong Kong, Japan , South Korea, and Germany. The United States alone is the main partner to China and is account 20.03% percent in imports. You can imagine most of our commodities are made in China such as baseball caps to television sets. Most of the products that Americans buy comes from China because of the cheap labor compared to our standard of living.

As China becomes more capitalistic nation, its domestic goals is to improve on education, medical care and social security. I believe that in a developed nation requires all these improvements to be met. Chinese people now have the opportunity to go to universities to pursue better jobs to have a better life style. It has become harder for manufacturers to entice people in China to work for a low wage. Also, the Chinese government introduced a new Labor Law which is meant for more protection rights for the workforce. With increase of wages and safety for manual workers, foreign markets are looking to other cheap labor nations such Malaysia and Bangladesh to relocate to make more profits rather to stay in China. In Guangdong province factories have been lost due to these labor laws and the government was happy they lost those factories because they want to become modern nation instead of a cheap labor nation. The more educated China becomes less people would be working for factories for low wages.

China's per capita GDP is $7,518 as of 2010 and most likely grow even