Impact of Chinese Economy on Global Markets and Competition

Running head: MARKETS AND COMPETITION
MARKETS AND COMPETITION
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1MARKETS AND COMPETITION
Introduction
The economy of China has shown immense levels of growth in the last 30 years and is
on the way of becoming the largest economy of the world in the future. The success of the
economy is thereby based on the ways by which the mixed economy of the country has been
able to incorporate the limited levels of capitalism in the command economy. The spending
of the Chinese government has been able to act as a major reason behind the effective levels
of growth of the economy (Ansar et al., 2016). The gross domestic product or GDP is a
measure which is related to the growth rates of Chinese economy. The growth of Chinese
economy was more than 23 trillion Dollars in the year 2017. The economic growth of the
country has however slowed down in the last few years after the year 2013.
The essay will be based on the analysis of the ways by which the growth of Chinese
economy has increased in the last few years and its effects on different aspects like, the
trading system of the world, monetary system of the world and the business based strategy of
the European and the US based global organizations in the world. The trends that are
currently prevalent in the different industries and their effects on the economy will be
analysed in the essay in detail.
Discussion based on the growth of the economy of China
Effect of the growth of Chinese economy on the world trading system
According to Baskaran, Feld and Schnellenbach, (2016), the global business based
experts are mainly aware of the historical impact that the economy of China has on the trade
related activities conducted in different countries. The country and its economy is expected to
grow in the next few years. The various trade based issues that are faced by China are able to
provide many opportunities and challenges to the global traders all over the world. The

2MARKETS AND COMPETITION
economic growth of China has been able to outpace the entire world by more than 6%. The
gross domestic product or GDP of China is 10.9 trillion Dollars which is behind that of US at
17.9 trillion Dollars. The size of the Chinese economy is considered to be as large as that of
Europe.
The different forecasts have depicted that the economy of China can become the
largest by the year 2030. The economy has been affected in a positive manner with the help
of its export-base qualities. Chinese economy is reaching the point of maturation and process
is evolving in a continuous manner. The economy of China was considered to be insular
communist in nature after the World War II. However, the “Open Door Policy” had been
implemented by the organization in the 1980s. The country has taken major steps based on
moderation of the state-control and has moved towards the market economy (Bhattacharya,
Rafiq & Bhattacharya, 2015).
As discussed by Friedman (2017), the economic activities had however faced major
issues related to the crackdown which had taken place based on the Tiananmen Square
Protests which had taken place in the year 1989. China had thereby been led to the fraternity
of world economy with the help of access that it had gained to World Trade Organization or
WTO. The status of the country that has been developed in the Chinese economy is
considered to be quite controversial in nature. The designation of China as a non-market
based economy has been a major issue which affects the position of the country in WTO.
The economy of the country is designated in such a manner as it is operated by the
state and is not affected by different forces in the market. The countervailing and anti-
dumping based duties are adjusted by the US and the other WTO member countries on the
imports from China. This has led to more than 100 anti-dumping cases and 41 countervailing
cases between the US and China (Economictimes.com., 2019). The country has also raised