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Economics Assignment- Chinese Economy

   

Added on  2020-05-16

13 Pages3562 Words109 Views
Running head: ECONOMICS ASSIGNMENTEconomics AssignmentName of the studentName of the UniversityAuthor note

1ECONOMICS ASSIGNMENTTable of ContentsAnswer 1:.........................................................................................................................................2Answer 2:.........................................................................................................................................3Answer 3:.........................................................................................................................................4Answer 4:.........................................................................................................................................5Answer 5:.........................................................................................................................................6Answer 6:.........................................................................................................................................7Answer 7:.........................................................................................................................................7Answer 8:.........................................................................................................................................9Reference:......................................................................................................................................10

2ECONOMICS ASSIGNMENTAnswer 1:China is one of the largest economy around the world that possess 11.2 trillion US$ as itsGross Domestic Product (GDP) is racing towards 15 trillion at a rapid speed (Feng et al. 2018).This economy has transformed itself into a versatile private sector based economy that rankssecond in the world arena with respect to its GDP. Owing to its high growth rate, Tian et al.(2018) argues that the country possess high scope to become the world leader in future. Thecountry was nowhere in during the 1970s, however it faced a massive growth in its goods andservices since 1980 and it has transformed itself into a great exchange with strong governmentalexpenditure to become where it is now (Vietor and Thomason 2015). From the figure 1 (AnnualGDP growth of China) it can be seen the country has faced high growth rate during 2006 to 2007and the rate of annual GDP growth has reached 14% mark. During last two decade, averagegrowth rate of china was 8% and most of the credit goes to market centric reforms and openingup of the economy. Depending upon its export capability and reduced amount of import, Chineseeconomy has become largest exporter in the world that has almost 3.3 trillion dollars of foreignreserve. Among all the developing nations, this economy accumulated largest amount of ForeignDirect Investment (FDI) during 2010 to 2014 and fiscal policies acted as the stimuli for theChinese economy. Coming to the other macro economic factors, from figure 2 (China economiccondition), it can be envisaged that presently the country is facing GDP growth rate of 1.60%annually with an unemployment rate of 3.90% (Long, Chen and Park 2018). During 2016, theeconomy had faced the lowest amount of unemployment and it shows that the economy isgrowing at a regular rate. However, during 2004, unemployment level was as high as 4.3% due to unbalanced andunsustainable growth of the economy. Considering the average unemployment rate of

3ECONOMICS ASSIGNMENT4.11percentage, it can be envisaged that economy is steadily growing. Coming to the inflationand interest rate of china, they are 1.80% and 4.35% respectively that indicates inflation rate iscomparatively low in the country (Chow 2015). Government debt to GDP is 46.20% thathighlights government has high amount of public debt, besides this country has accumulated 547USD HML that makes it one of the stable country (Vietor and Thomason 2015). However,economy of the country has facing a loss in its growth rate and the boom in the economy areover. Annual growth rate has dropped from 14% to 1.60% and the government debt has grownover time leading to instability in the economy. Besides this, the economy has 4.35% of interestrate that fails to attract required amount of FDI (Foster and Tseng 2017). Answer 2:During 1970s china was one of a poorly developed nation that had only $20 billionforeign reserve and it lies within the poor income group country with a large amount ofpopulation who were unemployed. Within next ten years, the nation turned itself into theeconomic centre of the south-east Asia. By the end of 2000, the paradigm shift of the country’seconomy has aided it to have $475 billion of foreign exchange that made it the second largestcountry in terms of FDI inflow (Hopewell 2015). Showing its great amount importance in theworld market, 24th may on 2000, china got its permanent candidacy in the World TradeOrganisation (WTO), which was the economic hub, which sets out the rules of internationaltrade. Now, there are various perspectives regarding the conjugation of china into the WTO(Levy 2017).China was developing during 2000s at a rapid speed and the main factor for this highgrowth was electronic and audio parts industry. However, once China got into agreement withthe WTO it was forced to reduce its tariff and import quotas. The country was facing disciplinary

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