Macroeconomic Environment of China and USA and its Impact on HP's Operation

Running head: ECONOMICS
Economics
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1ECONOMICS
Table of Contents
Introduction................................................................................................................................2
Macroeconomic environment of China and USA......................................................................2
GDP growth...........................................................................................................................2
Unemployment rate................................................................................................................3
Inflation rate...........................................................................................................................5
Monetary and fiscal policy framework in China and USA........................................................6
Fiscal policy...........................................................................................................................6
Monetary policy.....................................................................................................................7
Foreign trade policy instrument in China and USA...................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................11

2ECONOMICS
Introduction
The Hewlett-Packard or commonly known as HP company an America based
multinational information technology company having headquarters in California. The
company offered a wide variety of software, hardware and related services to small and
medium sized businesses, consumers, large enterprises, health and education sectors. The
company also operates in China. China’s operation of HP includes manufacturing, sales,
R&D and different service units (hoovers.com 2019). The report offers a brief overview of
macroeconomic environment in China and USA and its impact on company’s operation.
Analysis also include fiscal and monetary policy framework and trade policy instrument in
the two nations
Macroeconomic environment of China and USA
Macroeconomic environment of a nation include performance of some of the key
indicators (Goodwin et al. 2015). The major indicators representing macroeconomic
environment are growth in Gross Domestic Product, rate of unemployment and rate of
inflation.
GDP growth

3ECONOMICS
Figure 1: GDP growth in USA
(Source: Tradingeconomics.com 2019)
USA economy recorded a growth rate of 3.4 percent in the third quarter of 2018. The
growth rate is below the growth rate of 4.2 percent in the previous quarter. Growth trend can
be explained by a slight downward revision of personal consumption expenditure, decline in
net trade and expansion of inventory accumulation.
Figure 2: GDP growth in China
(Source: Tradingeconomics.com 2019)
China’s economy advanced at a rate of 6.4 percent in January 2019. This is the
weakest growth since 2008. The weak growth resulted from on-going trade tension between
China and USA, weak demand in the domestic economy and growing debt burden of
government.
The economic growth in China though is relatively higher that of USA, the economic
condition is much stable in USA than that in China. The economic stability in USA
encourages HP to expands its business in USA rather than in China. The company has
already sold 51 percent of its stocks in China