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Impact of Slowdown of the Chinese Economy Assignment

   

Added on  2020-03-16

10 Pages3008 Words70 Views
Running head: IMPACT OF THE SLOWDOWN OF THE CHINESE ECONOMY 1The Impact of the Slowdown of the Chinese Economy on Indonesia’s Economy By(Name)Institution:Tutor:Date:

IMPACT OF THE SLOWDOWN OF THE CHINESE ECONOMY2Executive SummaryThe increasing interrelation between Chinese economy with Indonesia not only present atremendous opportunity for the latter’s growth but also a huge macroeconomic risk. This paper aimsat examining the impact of China’s declining economic growth rate on Indonesia’s economy. Overthe last two decades, China has undoubtedly emerged as the leading economic power in the world asa result of its fast-paced economic growth. Consequently, due to its integration with the globaleconomy, China has become a source of growth for other world economies. As such, the traderelationship that any country has with China will inarguably have major and far reachingsignificance. One of the key features of the growth in Indonesia for the last two decades has been theincreasing role that China has been playing in the economic activities of the region coupled with theshift in trade patterns in the region. China serves as the leading trade partner of Indonesia with theformer acting as the main buyer/customer of the latter’s gas, textile and rubber products, cocoa andnon-oil exports. The export prices for Indonesia have been on a constant decrease for the last fiveyears and analysts predicts a worse situation due to the declining economic growth rate in China. Asa result Indonesia’s economy has been dealt a blow by suffering the same declining growth due to adecline in exports and increasing prices of imports. Weak export performance has served as theprimary reason behind the slow economic growth rate in Indonesia; a trend that began in 2011 todate and is expected to continue. Table of Contents

IMPACT OF THE SLOWDOWN OF THE CHINESE ECONOMY3Executive Summary............................................................................................................................21.0 Introduction..................................................................................................................................32. Causes of the slowing Economic Growth in China........................................................................43. The interrelation between China and Asian economies and Transmission channels between the two trading partners............................................................................................................................44. What will be the Real Impact?.......................................................................................................54.1 The Direct Impact.....................................................................................................................54.2 The Indirect Impact...................................................................................................................64.3 The General Impact...................................................................................................................65. Recommendations and Conclusions...............................................................................................76. References......................................................................................................................................8

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