Global Economic Impact of China | Study

Running head: MANAGERIAL ECONOMICS
Managerial Economics
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MANAGERIAL ECONOMICS1
ABSTRACT
The aim of this study is to analyse the global economic impact of China. This paper examines the
economic system of the country. It also emphasizes on privatization and globalization. This
paper investigates the role of privatization and globalization on Chinese economy. It analyses the
environmental issues generated from the economic development. It also discusses the natural
resources of China and how the government conserves it.

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Introduction
China is an East Asian country. It is one of the fastest growing economies of the world.
In 2018, the GDP of China was 13.5 trillion US dollars. It has been the second largest economy
of the world in terms of nominal GDP since 2010 (Gov.cn, 2019). Moreover, it has been the
largest economy of the world in terms of purchasing power since 2014. Globalization of business
through privatization and liberalization plays a pivotal role in the economic growth and
development of a country. Therefore, globalization significantly helped the economy of China.
The considerable economic growth of the country has a global impact. This paper examines the
global economic impact of China (Yeuh, 2015).
Global economic impact of China
Economic system and Problem of economic system
The system of resource allocation, production and distribution of goods and services
within a given geographic area or society is known as an economic system. It is also known as
economic order. It is basically a type of social system. The economic system of any country
involves type of production, process of production, quantity of production and recipient of the
output of production. Hence, it includes several entities, agencies, decision making process,
institutions and types of consumption. There are various types of economic system (Ollman et
al., 2016).
The availability of resources within the given boundary of a geographical area is limited.
Therefore, to meet growing needs and wants of human, a problem of scarcity of resources
occurs. The finite natural resources are insufficient to fulfil the demands of goods and services
by the human beings. This problem is known as economic problem. It is the problem of

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economic system, which is unable to allocate resources and produce goods and services
according to human needs. One of the major emerging economies of the world, China also faced
the problem of economic system. The economic system of the country needs to revise and
upgrade according to the environment of the country.
Features of a mixed economic system
The economic system can be segmented on the basis of resource allocation. Resource
allocation is the essential part of the production and economic system. One such type of
economy is mixed economy (Carlsson & Larsson, 2014). A hybrid economy where some aspects
of planned and market economies blended together is known as mixed economy on the basis of
resource allocation. In general, mixed economy is a combination of free markets or economic
planning with intervention of state and either of these three characteristics like market-based
allocation or public ownership of industry or private ownership of industry. Hence, the mixed
economy consists of sizable public sector along with state intervention and dominant private
sector. China is the example of a mixed economy, where the role of private sector is considerable
(Chen et al., 2019). Free exchange of goods and services undertakes in a market economy with
the help of private sector. Moreover, the public sector controls the planned economy with state
intervention. Previously, China was a planned economy. Later, the dominance of private sector
in the China increased dramatically.
The role of government in solving problems of different economic systems
There exists various limitations of the different economic systems. To solve the
shortcomings of the economic system, government intervention is required (Silverstein, 2013).
Though, there are different types of economic system, it is divided into three categories on the