China's Ascent: Global Commercial Leader and Economic Superpower

This report comprehensively investigates the factors contributing to China's rise as a global commercial leader and its increasing influence on the global economy. The study delves into the historical background, including the impact of economic reforms, investment in technology and education, labor mobility, foreign direct investment, and government policies. It examines key economic indicators such as GDP, trade, and investment trends. The research employs a mixed-methods approach, combining qualitative analysis with statistical tools to establish relationships between various economic factors. The report includes an introduction, literature review, research methodology, data analysis, and conclusions, offering insights into China's economic transformation and its implications for the global market. The analysis also includes a comparison with the United States, highlighting the characteristics and strategies that have enabled China's ascent. The paper uses statistical tools to establish the key findings of the paper in relation with correlation coefficient, sampling, Balance of Payments and interpret the sectorial growth of China and US in the coming years.

Running head: CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL
LEADER AND ITS ECONOMIC SUPER POWER TO INFLUENCE THE GLOBAL
ECONOMY
China emergence into becoming a global commercial leader and its economic super power to
influence the global economy
Name of the Student
Name of the University
Course ID

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
ITS ECONOMIC SUPER POWER TO INFLUENCE THE GLOBAL ECONOMY
Table of Contents
Abstract............................................................................................................................................3
Chapter 1: Introduction....................................................................................................................4
1.1 Introduction.......................................................................................................................4
1.2 Background of the study...................................................................................................9
1.3 Aims of the study............................................................................................................25
1.4 Objectives of the study....................................................................................................26
1.5 Research questions..........................................................................................................26
1.8 Structure of the Study..........................................................................................................27
Chapter 2: Literature Review.........................................................................................................28
2.1. China’s Supporting Role during the periods of Economic Instability and Global Crisis...28
2.2. Transformation of China after Economic Reforms of 1978...............................................29
2.3. The effect investment in Technology and Education for shaping the Chinese Economy. .31
2.4. The benefits of Labor Mobility and Foreign Direct Investment.........................................34
2.5. The effect of modern education and government policies to increase the efficiency of
businesses..................................................................................................................................35
2.6. China’s role as a major Merchandise Trading Partner.......................................................36
Chapter 3: Research Methodology................................................................................................41
3.1 Introduction..........................................................................................................................41

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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3.2 Outline of the Method..........................................................................................................41
3.3 Research Philosophy............................................................................................................42
3.4 Research approach...............................................................................................................43
3.5 Research Design..................................................................................................................44
3.6 Techniques for collecting the data.......................................................................................45
3.7 Sampling and Sampling Size...............................................................................................46
3.8 Data Analysis Plan...............................................................................................................46
Chapter 4: Data Analysis, Results and Discussion........................................................................48
4.1 Performance of economic indicators...................................................................................48
4.2 Descriptive statistics............................................................................................................52
Chapter 5: Conclusions, Recommendations and suggestions for further work.............................54
5.1 Conclusion...........................................................................................................................54
5.2 Limitations, recommendations and suggestions for further work.......................................56
Reference List................................................................................................................................58

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Abstract
The current paper deals in the study of factors that have caused China to emerge as a
leader of global commerce. China is currently having a super power to influence the global
market and lead the economies due to a continuous increase in GDP that comes from revenue
derived from imports. China plays an important role in commercial market and global trade
because of its leadership in economic sectors and its technological efficiency to produce goods at
low operating cost. This is done by dividing the paper into five sub-sections- Introduction,
Literature Review, Research Methodology, Data analysis and Conclusion.
The country is successfully following the footsteps of US and would overtake US in the
near future. The paper discusses about the reasons that have shaped the Chinese economy to earn
huge revenues by usage of several macroeconomic parameters such as trend in inflation, interest
rates, employment rates, GDP per capita, purchasing power parity and overall GDP. China is
gaining a comparative advantage in the production of goods and provides much of its resources
for the US economy. The paper uses statistical tools to establish the key findings of the paper in
relation with correlation coefficient, sampling, Balance of Payments and interpret the sectorial
growth of China and US in the coming years. At the end, the paper provides with a conclusion
about the reached topic and key findings taken from the data.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
ITS ECONOMIC SUPER POWER TO INFLUENCE THE GLOBAL ECONOMY
Chapter 1: Introduction
1.1 Introduction
An economy has multiple inherent risks which affect the income, expenditure and the
standard of living of the economy. It is related to the exchange of goods, labor activities,
technology, services, physical and human capital transfer among countries which is properly
defined in terms of monetary value of accounts. A global commercial economy refers to a place
where all the economies interact among themselves and this commercial aspect of the economy
is measured by the foreign trade and investment1.
Every economy has different resources and the allocation of resources, production techniques
and consumers vary among nations. This leads relocation of service activities or production to
economies who can supply the product at a lower opportunity cost such that they have a
comparative advantage in the production of the good. The global trade is anticipated both by
private and government firms in order to extract the maximized surplus. The rapid advancement
of the technologies has raised the overall communications with countries2. Foreign trade opens
up trade relations among the country which benefits them to facilitate with bigger export of
goods.
A global leader means that country can influence other economies to reach higher economic
growth and output levels. In order to become the global commercial leader, an economy need to
1 Morrison, Wayne M. China's economic rise: history, trends, challenges, and implications for
the United States. Washington, DC: Congressional Research Service, 2013.
2 Chiu, Stephen Wing-kai. City states in the global economy: Industrial restructuring in Hong
Kong and Singapore. Routledge, 2018.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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have certain characteristics and skills that is needed to lead the economy all around the world.
Gaining a position in the global economy means that the economy has multiple international
business operations and trade partners. There is need for acquiring a set of skills so as to work
across international, national and regional boundaries. A comparison of traditional global leader
and emerging global leader is elucidated below with USA and China as case in points:
 Sensitivity towards the cultural diversity of the country- The preference of the
residents and international cotraditional untries may vary. US have a strong
understanding about the choices of foreign countries and allocates the good in the
right places in order to lead economies3. Countries must respect the affiliations and
identities as every economy consists of varied cultures and beliefs and they must be
open to creating goods accordingly. China is a diverse economy with 56 ethnicities
and the physical geography ranges from plateaus to low plains and deserts to rain
forests which adhere to the production growth.
 An experience of overseas operations- Overseas experience is required to run
international businesses as they get accustomed to the threats and barriers by
understanding the growth pattern of the economy. Since 1811, US has been involved
in several foreign interventions which paved the pathway for rapid advancement in
foreign trade and investment. China is rapidly increasing its overseas operation with
inflow and outflow of assets from the top multinational corporations (MNCs). This
3 Stahl, Günter K., et al. "The upside of cultural differences: Towards a more balanced treatment
of culture in cross-cultural management research." Cross Cultural & Strategic Management 24.1
(2017): 2-12.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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benefitted China with the rise in employment rates and generation of bigger revenue
margins.
 Global strategic thinking and outcomes- Planning and formulating effective strategies
continuously to develop a deep understanding of the business world and overcome
any threat from its competitors. US calculates the plausible threats and benefits
according to the inflation, rate of growth, unemployment and changes in business
cycle. The Chinese consumer market has shown great potential for facilitating the
expansion of industries due to outsourced technological advancement and
manufacturing growths. The economic appeal in the Chinese market have effectively
attracted companies to increase their market share in the country and enlarge
operations in the sale of current product lines.
 Good negotiator and a deep knowledge about market outcomes- The business world
is continuously evolving and so are the challenges faced by the global economy. A
country needs to negotiate its strong and weak points and constructively deal with
other economies. Countries must appreciate the cultural differences and communicate
actively with other. The Chinese consumer market has shown great potential for
facilitating the expansion of industries due to outsourced technological advancement
and manufacturing growths. The economic appeal in the Chinese market have
effectively attracted companies to increase their market share in the country and
enlarge operations in the sale of current product lines.
 Low income inequality- A country can have three groups of people depending of the
high, low or average income which flourishes the growth of firms. A low-income
inequality means that demand for a certain good is determined by considering the

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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choices of most of the people in the economy and suppliers can maximize profits. The
income inequality in US has been going down since the 1990’s for which US has
continued to be as the global leader due to fall in tax rates up to 35 percent The
difference between income inequalities among various groups in China is similar to
that of US with a wealth gap of $43,0004. When the Chinese economy was stagnant,
the income inequality gap was huge due to poor or no economic growth. With rising
economic growth and new employment opportunities, the income gap started going
down after the economic reforms.
 Productivity and cost-effective advantages- With low income inequality, the country
can invest in learning and research to build new tools for raising the productivity per
person. US have effective technologies that makes work easier along with low costs
and works by capital intensive approach with few labor. However, China had adapted
itself with the changing environment and market conditions rapidly such that China
can now manufacture goods with a 5percent reduction in the production costs,
compared to US. Due to this, many Chinese companies are expanding their
businesses in US5.
 Population density- When a country has that has high population density, with large
number of people in the labor force, provides a positive surplus to the economy. US
has an average population density with greater number of adult population who could
4Zhou, Yixiao, and Ligang Song. aaaaaaaaaa"Income inequality in China: Causes and policy
responses." China Economic Journal 9.2 (2016): 186-208.
5 Song, Malin, and Shuhong Wang. "Market competition, green technology progress and
comparative advantages in China." Management Decision 56.1 (2018): 188-203.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
ITS ECONOMIC SUPER POWER TO INFLUENCE THE GLOBAL ECONOMY
earn and generate income for the economy and currently it is 4.4 percent of the global
population. China is the most densely populated economy in the world and the
population density has doubled over the past 25 years near about 40 million6.
Industries benefitted from larger populations with majority constituting the younger
aged people.
United States of America is the leader of global commercial since the 19th century as it is
considered as the best country to invest and operate business. Per capita income started going up
in 1870 due to which people started investing in new businesses. The aggregate spending and
consumption went up gradually which led to the rise in annual income and doing businesses
became more profitable. The real GDP has shown a constant increase since 1900 with a
minimum of 2.9 percent each year. Even during the Global Financial Crisis, the country
produced 14.4 trillion of goods. From 1990, the economic growth gradually went up due to fall
in unemployment rates and strategic trading plans. However, trade barriers and other policies are
lowering the average growth rate and the place is said to be dominated by China according to the
economic cycles7.
In the past ten years China has been developing itself amazingly well. It has emerged as a
global commercial and has been decoupling the business cycle effectively. The goods from
China have a rising demand from other countries and leading China into an advanced and
6 Zhang, Dong-mei, Wen-zhi Zhao, and Wei-cheng Luo. "Effect of the population density on
belowground bud bank of a rhizomatous clonal plant Leymus secalinus in Mu Us sandy
land." Journal of plant research 132.1 (2019): 69-80.
7 Zhai, Weifeng, Shiling Sun, and Guangxing Zhang. "Reshoring of American manufacturing
companies from China." Operations Management Research 9.3-4 (2016): 62-74.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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dominating position in the global market. Increase in export goods cause economic growth in
terms of GDP (Gross Domestic Product) and national income. Currently, China is reputed to be
the world’s second greatest emerging economy and is soon to lead the world with its power to
influence the global market8. The paper aims to understand the reasons that led China to grow as
a global commercial leader and derive a powerful position to lead to global market. These
reasons will be further analyzed statistically by taking data from various industries and
interpreting them.
1.2 Background of the study
China is reputed to be one the fastest growing economies globally since the late 1980s. The
introduction of PRC (People’s Republic of China) in 1949 saw a surprising increase in the
economic developments and acted as a turbulent for growth of China because previously, the
economy remained mostly stagnant. It was a system formed to maintain the highest degree of
autonomy and the economy underwent through a lot of changes regarding socialism, revolution,
Maoism. China was governed by central planners and state ownership. The period between 1950
and 1973, had an average of 2.9 percent growth in per capita real GDP. However, the death of
Mao led to a period of stagnation with little or no economic growth and turned China towards
market-oriented reforms to pull China out of stagnation. During the period of Great Leap
Forward famine, the economic growth drastically decreased, and the Cultural Revolution created
such chaos which affected the economy negatively9.
8 Di Mauro, Filippo, and M. Hashem Pesaran, eds. The GVAR handbook: Structure and
applications of a macro model of the global economy for policy analysis. OUP Oxford, 2013.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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In the late 1970s and early 1980s, the Communist Party opened up foreign investment and
permitted entrepreneurs to open new businesses. In the latter part of 1980s and 19990s,
privatization was established which contracted out much of state-owned industries into private
firms by the shifting of protectionist policies, price controls and regulations10. Only the state
earned monopolies like that of petroleum and banking remained and the rest were converted into
private firms which accounted to 70 percent of China’s GDP by 2005. Overall, there occurred
unprecedented growth of 9.5 percent each year, from 1978 to 2013. China experienced major
improvements in social stability and the living standards of the people. This led China to emerge
as an ideal backbone of the global economy from an isolated socialist state. The rise in rate of
growth at a constant pace was due the enormous mobilization of resources and shifting the
executive control for public to private ownership sectors improved the efficiency in managing
the available resources11.
China had limited resources for investment which prevented China from importing or
producing advanced equipment. China being a vast country consisted of varying living standards
from wide scale poverty to relative prosperity. This gap has made China to stay in a weaker
9 Kim, Seonghoon, Belton Fleisher, and Jessica Ya Sun. "The Long‐term Health Effects of Fetal
Malnutrition: Evidence from the 1959–1961 China Great Leap Forward Famine." Health
economics 26.10 (2017): 1264-1277.
10 Neilson, Jeffrey, Bill Pritchard, and Henry Wai-chung Yeung. "Global value chains and global
production networks in the changing international political economy: An introduction." Review
of International Political Economy 21.1 (2014): 1-8.
11 Leutert, Wendy. "Challenges ahead in China’s reform of state-owned enterprises." Asia
policy 21 (2016): 83-100.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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economic condition and position in the 1970s. There was limited interaction among the different
geographic regions which eventually created the usage of a deep spectrum of different
incompatible technologies due to organizational forms, economic activities and prosperity. In
some regions, there was residents who barely earned a basic income for subsistence living from
their handicraft units12. Whereas, in some regions, residents earned huge revenues and profits
from the modern factories and the labors working there received steady wages along with
bonuses, incentives and free medical treatment. The relatively small size of capital stock lowered
the production per worker and eternalized the economy for generating a substantial amount of
surplus.
Investment and research in Science and technology led to the creation of advanced
technologies which simplified the work done by every person. Technology and productivity
became the prime focus of China’s growth per capita and gained a comparative advantage in
production with the expansion of transport facilities and technological advancement. This change
was accompanied by increased levels of urbanization and industrialization. China is evolved as
the biggest trading partners of leading economies. China had qualitative growth in GDP in the
last ten years and has scope for more development and multiple growth opportunities. The
opening of foreign trade and investment has significantly accelerated the growth pattern of the
country. The population density is high in China. However, this rising population growth is
causing a gain in both productivity and output13. The GDP of China doubled every eight years on
12 Hamashita, Takeshi. China, East Asia and the global economy: Regional and historical
perspectives. Routledge, 2013.
13Zhang, Han, Donald Patton, and Martin Kenney. "Building global-class universities: Assessing
the impact of the 985 Project." Research Policy 42.3 (2013): 765-775.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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an average which dived out 800 million people out of poverty. The economy is leading with
highest purchasing power parity, merchandise and manufacture partner in the world.
The strongest economic growth of China was seen in the first quarter of 2006 with an
average increase of 10.2 percent in the annual GDP. This growth in China was fueled by the
manufacturing sector in which China has a relative comparative advantage in the world14. This
advancement is due to generation of the product at a low cost and cheap labor. China has
effectively shaped the trade market by trading heavy goods to nearby countries and lighter goods
to distant economies which saved the transportation costs15. Thus, low costs coupled with
cheaper exports have led China to earn double digit profits and significant position in the world
market. This trend kept on going until 2012, when the GDP started going down by a small
amount but could not affect the overall economic growth of China and its supreme position16.
14 Mamic, Ivanka. Implementing codes of conduct: How businesses manage social performance
in global supply chains. Routledge, 2017.
15 Breslin, Shaun. China and the global political economy. Springer, 2016.
16 Stephen, Matthew D. "Rising powers, global capitalism and liberal global governance: A
historical materialist account of the BRICs challenge." European journal of international
relations 20.4 (2014): 912-938.

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Figure 1: Trend in GDP of China (1965-1970)
Source: 17
17 "United States | Data." Data.worldbank.org. N. p., 2019. Web. 21 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 2: Change in GDP of China after 2000 for 5 years (2002- 2007)
Source: 18
The above two figures named as, Figure1 and Figure2 puts forth the data of China for 5 years
before 1970 and after 2000. As evident from the above graphs, the GDP fluctuated before 1970,
while it showed a constant rising upward slope after 2000. The GDP went frown from the level
of 33 in 1965 to near about 27 in 1968 which is 5 percent fall in GDP letting the economy to
slow down. However, the rate of GDP started going up vigorously from 1968 and with two years
it reached the level of 36, which is much higher than in 1965 and recovering the downfall with 9
percent increase in the GDP rate. This rise continued for prolonged period such that the economy
of China flourished with the GDP value from 38 to 48 within 5 years starting with 2002. Thus,
18 "China | Data." Data.worldbank.org. N. p., 2019. Web. 21 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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on the contrary China has been able to emerge from a weak rate of growth to constant growth
margins.
Figure 3: Trend in the export of US as a percentage measure of GDP before 1970s
Source: 19
19 "Imports Of Goods And Services (% Of GDP) - China | Data." Data.worldbank.org. N. p.,
2019. Web. 14 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 4: China’s export change reflected in the percentage change in GDP before 1970s
Source: 20
The export market is an important factor in determining the amount of economic growth
experienced as a result of the rising GDP. From the above data, provided in Figure 3 and
Figure4, it is evident that the percent of GDP measured due to change in trade is significantly
low for China in earlier times (1965-1970). The trend shows a negative slope in terms of China
because of a slow economic growth and lack of demand of Chinese products. Whereas, in United
States GD shows a rising trend in the pattern of growth marked the increase in GDP due to
traded goods. Rise in export in terms of GDP increased very slowly till 1969 will grew
enormously in the next year, with an increase of 0.6 percent. The change for GDP due to
20 "Exports Of Goods And Services (% Of GDP) - China | Data." Data.worldbank.org. N. p.,
2019. Web. 21 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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exported goods went down from the level 3.6 to 2.5, reflecting a fall of 1.1 percent, showing
negative growth patterns.
Figure 5: US export market growth for five years after 2000 (2002- 2007)
Source: 21
21 "Exports Of Goods And Services (Current US$) | Data." Data.worldbank.org. N. p., 2019.
Web. 21 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 6: Export of goods in China measured a percentage change in GDP during (2002-
2007)
Source: 22
China improved itself in 2002 from the extremely weak economic condition which prevailed
during 1965 due to poor exports and GDP trends. The rise in the rate of growth is reflected as a
1.3 percent rise in five years starting from 2002. This shows how the Chinese economy
flourished in the past few years when it started increasing the tradable products. In USA, this
rise in GDP due to traded goods is 2.1 percent showing why USA was then the commercial
leader among all the countries. However, China had showed an upward trend ever since 1978
after the formulation of qualitative economic policies and reforms.
22 "Exports Of Goods And Services (Current US$) | Data." Data.worldbank.org. N. p., 2019.
Web. 21 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 7: Import of goods and services in China as a percent of GDP (1965-1970)
Source: 23
China’s import market was not developed during the 1960s, which did not allow China to
regain the benefits from net exports. Import contribution towards GDP showed negative results
for the economic state of the country. The net export was low which denoted lower growths from
export market. This implies the imports could not be balanced efficiently from the exports,
showing a negative result in the GDP returns.
23 "Imports Of Goods And Services (% Of GDP) - China | Data." Data.worldbank.org. N. p.,
2019. Web. 14 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 8: Import of goods and services estimated as a percent of GDP for five years after
2000 (2002 - 2007)
Source: 24
Along with exports, the import market for China, started working efficiently due to positive
returns from the net export from 2002 which is indicated in Figure8. Increase in export earnings,
raised the per capita income of Chinese economy. As the purchasing power goes up, the demand
for foreign goods go up significantly. Thus, imports increased which reflected a positive effect in
the GDP pattern as the percentage rise in GDP from imports improved qualitatively to around 8
percent.
24 "Imports Of Goods And Services (% Of GDP) - China | Data." Data.worldbank.org. N. p.,
2019. Web. 14 Oct. 2019.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Apart from this, there are several macroeconomic indicators that empower the performance
of the economies such as purchasing power parity (PPP), price index, inflation, interest rates,
bank reserves, sertorial growth, employment rates, deficits or surplus, exchange rtaes and the
amout foreign direct investment (FDI). PPP estimates the relative value of different currencies by
taking price of goods in different countries and this rates varies from market determined ecange
rates due to changes in tariffs, transportation cost
Figure 9: Change in PPP value between 1980 and 2020 in China and USA
Source: 25
China’s PPP have increased steadily since 1980s and have taken over USA in 2014 with
a value of 18.3 trillion which was 17.5 trilliin for US. China has the largest PPP at 25.3 trillion
25 Chen, Cheng, Dan Li, and Caixia Man. "Toward Sustainable Development? A Bibliometric
Analysis of PPP-Related Policies in China between 1980 and 2017." Sustainability 11.1 (2019):
142.

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and is considered as a bigger economy than USA whose PPP is at 19.4 trillion, as seen in Figure
9. However, the unemployment rate is quite low in US than in China and the falling trend is
bigger for USA with 6% percent approximately as coamed to 1% for the past ten years. This
proves that much of the income comes from the export market and China needs to increase its
employment to mainatain their position as global commercial. The current unemployment rates
are similar in US and China, nearly aboutr 3.7 percent which shows that China has been able to
lower down its unploymenrt rates and is prospering towards a high standadred of living. The rise
is rate of growth have affected the inflation rates severly by pulling up the aggregate price level
in China upto 3units whereas the inflation rate of US is near to two units. Thus, the overall
performance is significantly stronger in China.
China is considered to be second largest economy after United States in the last 25 years,
which has contributed over 30 percent of growth even with a population of 1.4 billion26. The
economy has shifted its structure to a market-based economy from a centrally planned economy
since the initiation of economic reforms in 1978 which privatized firms and derived maximum
profits27. However, the growth rate has started going down since 2012 when it lifted 850 million
people out of poverty with a sustainable life. Yet, there arises a controversy28 regarding China’s
power to influence the global market and the fall in rate of GDP.
26 Smil, Vaclav. China's Environmental Crisis: An Enquiry into the Limits of National
Development: An Enquiry into the Limits of National Development. Routledge, 2016.
27 Yeung, Henry Wai‐chung, and Neil M. Coe. "Toward a dynamic theory of global production
networks." Economic Geography 91.1 (2015): 29-58.
28 Gilpin, Robert. The challenge of global capitalism: The world economy in the 21st century.
Princeton University Press, 2018.

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Although China has massive social and economic development, the per capita income is
lower compared to the developed countries. The average income of an individual in China is that
an individual in developing country which is only a quarter of the average income levels for the
developed high-income countries. Challenges have been faced in the manufacturing sector from
which the country derives most of its economic super power29. As China has a comparative
advantage in production of technologies at a lower opportunity cost, it faces challenges in the
production techniques as it cause environmental problems such as air, soil, water and creates a
loss in bio-diversity and mega projects.
Recently, from the beginning of 2018 China has faced problems from various factors such as
Trade war with the United States, fluctuations in the domestic real estate market, debt, collapse
of public stock and non-bank capital markets30. Trade war have slowered the production of
certain goods and led to falling export revenues because many of Chinese goods were exported
to US. All these factors have affected the real GDP of China, yet the economy is still going
strong with a good value in the GDP which is conflict in terms of its superiority in the world. .
US have maintained a xero interst rate till 2016 to boost the investment and flow of money. The
US interest rates have grown to 1.8 percent in 2018 due to Trade war that signaled an increase in
price and inflation levels. China is facing a very problem to deflate its real estate bubble which is
predicted to collpase in 2020 with rising mortgage prices31. China’s property market is dependent
on massive liquidity steroids and the treasury bond market gives a higher yield than US.
29 Hameiri, Shahar, and Lee Jones. "Rising powers and state transformation: The case of
China." European Journal of International Relations 22.1 (2016): 72-98
30 Zhao, Suisheng. Chinese Foreign Policy: Pragmatism and Strategic Behavior: Pragmatism and
Strategic Behavior. Routledge, 2016.

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However, the trade war decreased the private-sectoe debt which allowed in a flow of credit into
the economy.
In this connection, the proposed paper tries to evaluate how the factors relating to Trade war,
banking or non-banking assets, collapse of public stock, debt and real estate market affect the
China’s super power to influence the global economy and its emergence as global commercial.
The domestic demand might hamper due to the change in environmental conditions because
supply will be affected negatively if this real GDP continues to go down. The Chinese economy
plays a prime role in the global trade and commerce market32. The trade war between US and
China has shaken the global economy because U.S. and China are two of the biggest economies
with huge quantity of foreign trade and trade war which imposes high amounts of tariffs on
imports can negatively affect the growth pattern of many economies in the world33. The key role
is to establish the factors that has sourced China for becoming a global commercial and what are
the problems faced by them while emerging as the superior among other economies34. Hence in
this backdrop, the aim of this research is given below.
1.3 Aims of the study
31 Bond, Patrick. "BRICS banking and the debate over sub-imperialism." Third World
Quarterly 37.4 (2016): 611-629.
32 Farooki, Masuma, and Raphael Kaplinsky. The impact of China on global commodity prices:
The global reshaping of the resource sector. Routledge, 2013.
33 Locke, Richard M. The promise and limits of private power: Promoting labor standards in a
global economy. Cambridge University Press, 2013.
34 Carter, Neil, and Arthur PJ Mol. Environmental governance in China. Routledge, 2013.

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The aim of the research proposal is to analyze the factors and causes that led China to evolve
as a global commercial. This paper aims to bring out the reasons that led to such growth of
China and how has its power influenced the global economy.
1.4 Objectives of the study
Depending on the area of focus of the research paper, research objectives have been
developed to clearly indicate the steps to be followed while proposing the research and identity
the ways variables are to be measured35. Giver below are the central objectives of the research
proposal:
 To compare the economic indicators of China and USA in order to infer Chinas position
in the global market for the period from 2015-2025
 To do a macro analysis to appraise China’s growth as an emerging global commercial
economy with an assessment of the sectoral growth and its impact in foreign trade.
 To explore the reasons that led China to become a leader to influence the international
markets
1.5 Research questions
35 Gereffi, Gary, and Xubei Luo. Risks and opportunities of participation in global value chains.
The World Bank, 2014.

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Research questions refers to an enquiry that leads to a specific concern or issue in a research
paper and depending on these questions, qualitative and quantitative analysis is done. These
questions are dependent on the aims and objectives of the paper. The main research questions are
given below
 How has China emerged into a global commercial?
 What are the factors that made China to evolve as a global commercial?
 How does China have a super power in the global market?
 What are the tools that gave China with the super power in the global market?
 How can China influence the global market by its superiority?
1.8 Structure of the Study
The paper is structured in such a way so that the research paper is divided into five
sections depending on the area of focus and its prime objectives.
Chapter 1 Introduction
Chapter 2 Literature Review
Chapter 3 Research Methodology
Chapter 4 Data analysis, Results and Discussion
Chapter 5 Conclusion and recommendations

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Chapter 2: Literature Review
2.1. China’s Supporting Role during the periods of Economic Instability and Global Crisis
United States has been the center of all the global commercial activities and has acted as
the economic stabilizer in the periods of global economic crises according to Charles P
Kindleberger. Theories related to power transition and hegemony is based on the US economy
such that it helps in the growth process of other economies at times of crises. However, there has
been no proper tests and measures to conduct the approach of Charles P Kindleberger. In contrast
to the assumptions and estimation, it has been noted that China is either going to act as a free-
rider to global problem dealers or challenge United States to perform various activities and take
the leading position from Unites States 36. These assumptions requires many measures related to
statistical data and hypothesis which will show an absolute result about the growing controversy.
The evaluation of these controversies is tested by conducting a hypothesis regarding the three
major economic crisis and interpret the ways in which the contrasted countries behave. The three
36 Von Zedtwitz, Max, et al. "A typology of reverse innovation." Journal of Product Innovation
Management 32.1 (2015): 12-28.

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great variables were the great Recession of 2007- 2009, the 2001 “DotCom” Crisis and the Asian
Economic crisis of 199737.
The findings of the above hypothesis suggests that Kindelberger’s model is more evenly
biased towards China, saying that conventional theories by the conventional scholarships would
not be able to predict these outcomes38. China had a stabilizing and supportive role during the
periods of the major three economic crisis taken into consideration. However, these tests were
performed and shared without taking evidence of explicit collaboration from China and United
States. According to the profound data, overtime China has played an efficient role in stabilizing
the poor economic conditions of the global system in the periods of economic crisis by investing
in the development of other economies. As per the trends in the performance of the nations,
China will keep on supporting the economies and fuel the economies for better programming in
the future39. If the tests and outcomes of Kindelberger happens to be correct, then the
assumptions that say, United States is the leading stabilizer of global economies is empirically
mistaken by the power transition theories. Thus, there is need for further analysis of the
controversial topic to statistically prove the facts.
37 Pelletier, Jennifer E., et al. "Evidence-based policies on school nutrition and physical
education: Associations with state-level collaboration, obesity, and socio-economic
indicators." Preventive medicine 99 (2017): 87-93.
38 Li, Feng, and Li Tang. "When International Mobility Meets Local Connections: Evidence
From China." Science and Public Policy 46.4 (2019): 518-529. Web. 15 Oct. 2019.
39 Shen, Xiaofang. Private Chinese investment in Africa: Myths and realities. The World Bank,
2013.

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2.2. Transformation of China after Economic Reforms of 1978
China has contributed towards massive growth objectives after the publication of a
domestic transformation in the context of global data. China has a high population density which
have has negatively impacted the economy in earlier times. The rising labor costs and scarcity of
labor in the developed economies have marked the reason for the rapid advancement of the
economy40. The high population density contributed to the economic development as China knew
how to efficiently utilize its resources in the context of labor-intensive manufacturing techniques
and lower the cost with increased supply of Chinese goods. China invested excessive amounts in
the areas of heavy industry and infrastructure after the global financial crisis so as to pull the
economy out of the danger which created a debt crisis for China due to requirement of large
structural changes for longer time periods. Moreover, in the past China had low adult population
and more of old and child population which lowered the per capita output and income generated
by each person41.
Adult population is considered as the active population or labor force participants who
can work and gather the higher levels of income and output. In the long run, the investment in
the research and development of modern amenities have profoundly shaped the economy with
high rate of return. China gained a comparative advantage in the use of latest technologies that
requires both labor and capital intensive techniques. It is considered to have labor intensive
technique that needs more number of skilled labors for operating the latest tools and capital
40 Zhao, Dongyuan. "China: a big player in a small world." (2016): 577-578.
41 Gereffi, Gary. "A global value chain perspective on industrial policy and development in
emerging markets." Duke J. Comp. & Int'l L. 24 (2013): 433.

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intensive techniques to increase the per capita output. The global and domestic environmental
changes have led to the growth of China by an investment-led growth from the challenges in the
global context. This transition of China from less skilled to gaining an advantage in the labor-
and capital-intensive techniques to emerge as one of the middle-income countries in China42.
2.3. The effect investment in Technology and Education for shaping the Chinese Economy
The leader of global commerce depends on the economies who have a strong advantage
of technologies to drive their production and sales of the good43. In the last decade, Great Britain
happened to establish the first position in terms of technological leadership which acted as a
catalyst in the growth process of the country and be the driving force of the economic growth in
other economies as well 44. This leading role has been taken by United States of America since
the 19th Century after acquiring a production efficiency in the production of various goods. In the
paper, "Global Technology Leadership: The Case of China” written by Huang, Can, and
Naubahar Sharif, puts forth the view of China gaining the position of technological leadership in
the upcoming years. The coming decades are going to see a boom in the production and sale of
42 Cai, Jinyang, et al. "Innovations in genetically modified agricultural technologies in China’s
public sector: Successes and challenges." China Agricultural Economic Review 9.2 (2017): 317-
330.
43 Gosens, Jorrit, et al. "The limits of academic entrepreneurship: Conflicting expectations about
commercialization and innovation in China’s nascent sector for advanced bio-energy
technologies." Energy Research & Social Science 37 (2018): 1-11.
44 Zhao, Zhen-Yu, Yu-Long Chen, and John Douglas Thomson. "Levelized cost of energy
modeling for concentrated solar power projects: A China study." Energy 120 (2017): 117-127.

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goods due to advanced technologies45. Huang, Can, and Naubahar had taken three sources to
identify the factors that led to such positioning of China such as the centralized position to
willingly employ state-sponsored government supported programs and industrial policies,
China’s massive domestic market and the positive impacts of globalization which continued to
transform global markets.
Globalization caused a rise in concentration of the labour markets by the closure of wage
gap between labours of developing and developed economies46. Developed economies can get
cheap amount of input resources from the developing economies and utilize them for increasing
the production level of commodities in their economy. When resources are efficiently allocated
at a reasonable rate, they have an increased demand in the economy. These labours when become
skilled can easily move to their desired place and work which puts a positive surplus for every
economy. China has a massive market due to the population density which contributes for the
large number of potential suppliers who facilitate the export market47. These labours when
become skilled can easily move to their desired place and work which puts a positive surplus for
every economy. China has a massive market due to the population density which contributes for
the large number of potential suppliers who facilitate the export market.
45 Ren, Shuang, Robert Wood, and Ying Zhu. Business leadership development in China.
Routledge, 2015.
46 Gereffi, Gary. "A global value chain perspective on industrial policy and development in
emerging markets." Duke J. Comp. & Int'l L. 24 (2013): 433.
47 Lardy, Nicholas R. "China: Toward a consumption-driven growth path." Seeking Changes:
The Economic Development in Contemporary China. 2016. 85-111.

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Figure 10: The demand for facial recognition of rapid increase in advanced technologies
Source: 48
From Figure 10, it is seen how China had contributed for technological improvement to
an increase in the advanced technologies starting with zero recognition which went up to 1.6
billion by 2018. After the acknowledgment of the advanced technologies, the paper establishes
the evidences from multiple statistical data and present the growth prospectus with the current
state affairs and government policies. All of the key sources have established the fact about how
the competitive advantage of China has paved the path for an imminent technological leadership
in the world.
2.4. The benefits of Labor Mobility and Foreign Direct Investment
48 Yip, George S., and Bruce McKern. China's next strategic advantage: From imitation to
innovation. MIT Press, 2016.

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According to the economists, international mobility of physical and human labor is able
to meet the rising demand of global and local connections. The transition of academic mobility
has been promoted by China as it has shown worthy and positive results49. Although
technological mobility and the information that comes with it has a supporting role, yet little
awareness is provided for the joint impacts with local connectors on the pathway for
establishment for established scholars. The paper by Feng and Li, has examined about the
relationship between the speeds of gaining skills in distinctive fields with respect to labor
mobility. According to the tested results, local connections empower the career development and
training facilities for the residents of China. These programs help the people to acquire
techniques or methods to produce a good in an efficient way in much lesser time frame. China
supports employee benefit programs to increase the employment rate and raise the efficient
allocation as well as production of goods.
Corporatization and commercialization in China have reflected a positive outcome in the
growth and business modules of the country50. These forces are contributed by the education and
academic system of the Chinese economy in terms of teaching, research, training, development
activities as served by the academic professors. United States already had a strong political role
in the fields of professional and critical intellectuals who manifested the growth and living
standards due to acquirement of skills, knowledge, information related to a various field. The
49 Babb, Sarah L., and Alexander E. Kentikelenis. "International financial institutions as agents
of neoliberalism." The SAGE handbook of neoliberalism (2018): 16-27.
50 Norrlof, Carla, and Simon Reich. "American and Chinese leadership during the global
financial crisis: Testing Kindleberger’s stabilization functions." International Area Studies
Review 18.3 (2015): 227-250.

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Chinese government invested great deals of money in education and lot of training, development
centers have opened up in the country which contributed for greater returns from the invested
funds. Academic professors have an important role to play in the field of education for educating
the students to implement better approaches and strategies to businesses.
2.5. The effect of modern education and government policies to increase the efficiency of
businesses
The global trends have strongly acknowledged to the essence of academic freedom and
the supporting the new strategies of businesses to drive a greater potential of the goods. The
paper is dealt in the advantages of higher education and how the investment in education in
China has helped the economy to attain economic growth both quantitatively and qualitatively.
Higher education drives an economy towards political and social change as education is can
solve multiple problems at the work field. Thus, it is dependent on the professors and the
education institutions how well they plan their programs in providing quality education to the
students for increasing the efficiency of the people. China is slowly and steadily proceeding
towards the leadership position of businesses due to the formulation of effective strategies in the
economy for effective trade oriented export growth51.
Innovation is given as the highest priority by the government of China to dominate
foreign markets by empowering effective strategies in the businesses. The economic model of
China is biased towards creation of advanced technologies and innovations that can increase the
per capita output within a specified time bound. China happened to be a very stagnant economy
51 Jamil, Farhan, et al. "Business incubators in Asian developing countries." International Review
of Management and Marketing 6.4S (2016): 291-295.

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with negative economic growths due the political instability and ineffective government policies
52. Globalization and opening up of trade with neighbouring countries in the initial phases have
caused China to move towards a highly efficient economy from a state of stagnation. China
stated developing itself with the support from developed countries who opened up foreign direct
investment. The implementation of free market reforms after 1979 acted as a catalyst in the
process of economic development and growth53. China has been one of the largest economies in
the recent times with the highest purchasing power parity. The country has delved itself to be one
of the major commercial partners of United States because of holding merchandise, foreign trade
and exchange services, manufacturers, industries.
2.6. China’s role as a major Merchandise Trading Partner
China is the biggest trading partner in merchandise. United States imports most of the
input goods and minerals from China making it its biggest import partner. The increased demand
from the leading country has significantly benefitted China to acquire a strong position in the
global market. China holds a major portion of the Treasury securities of United States who funds
the federal debt and allows a low interest rate for United States54. The dependency of United
52 Cai, Jinyang, et al. "Innovations in genetically modified agricultural technologies in China’s
public sector: Successes and challenges." China Agricultural Economic Review 9.2 (2017): 317-
330.
53 Tian, Wei-Ming. Grains in China: Foodgrain, Feedgrain and World Trade. Routledge, 2017.
54 Chen, Jun, et al. "Microalgal industry in China: challenges and prospects." Journal of applied
phycology 28.2 (2016): 715-725.

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States for importation of Chinese products have led China to gather a superior position55. The
government of China took a lot of initiatives to upgrade the economic structure to facilitate
increased exports. In 2015, an initiative was applied by China, named as “Made in China 2015”
to modernize the structure of the ten important manufacturing sectors by assistance of
government by supporting these sectors to pull up production levels. This policy has led China to
emerge as the largest manufacturer in the world according to World Bank56. The manufacturing
sector itself accounts for 28.7 percent of the annual Gross Domestic Product (GDP) which much
higher comparative to Unities States who contributes to over 11.6 percent of the GDP57.
55 Gilmour, Brad, Hugh Dang, and Xiaobing Wang. "China's Agri-Biotech Policy, Regulation,
and Governance." (2015).
56 Morrison, Wayne M. "China’s economic rise: History, trends, challenges, and implications for
the United States." (2014).
57 Ernst, Dieter. "Global strategic patenting and innovation–Policy and research
implications." Available at SSRN 2742700 (2016).

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Figure 11: The change in gross value added by the manufacturing sector in China and United
States for ten years (2006-206) and compare the values
Source: 58
Based on a survey by the Global Manufacturing Competitiveness Index, China is the
most competitive manufacturer in the world. The data compares the value added by China and
US for a ten year period starting from 2006. China had a value added of 1150 units in 2006
which went up to 3225 units in 2016, showing a rise of 2075 units, as a result of rising
revenues59. Whereas for United Sates, this rise in only about 371 units from 2006 to 2016,
reflecting a much slower rise in ten years. This high value of growth says the reason for China to
58 Li, Ling. "China's manufacturing locus in 2025: With a comparison of “Made-in-China 2025”
and “Industry 4.0”." Technological Forecasting and Social Change 135 (2018): 66-74.
59 Huang, Can, and Naubahar Sharif. "Global Technology Leadership: The Case Of
China." Science and Public Policy 43.1 (2015): 62-73. Web. 15 Oct. 2019.

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emerge as a leader in global markets in the manufacturing sector60. It was predicted by the
revolutionaries that China would slowly overtake United States by 2020 because of large capital
investment and spending in modern technologies61. China is reputed to stay at a higher position
in the world due to its manufacturing power, large aggregate spending and investment.
Government’s supports plays a major role for maintaining a standard position for leading the
economies. Government has innovate policies to raise the level employment and promote the
creation of innovative tools for advanced manufacturing62. Sectors related to science, technology,
engineering and mathematics as continuously on the verge of development.
China’s investment and trade reforms helped the economy with rising productivity gains
and growth in trade valuation. China is reported to have more than 445,244 foreign invested
enterprises (FIE) alone in 2010 which recruited 55.2 million employees and created about 15.9
percent of urban work force. FIEs has contributed for more than 59.7 percent of imports and 58.3
percent of Chinese exports back in 2005. Although the value from imports and exports have
fallen by a small portion after China accused US for a trade war due to creation of tariff at a high
rate.
60 Karaulova, Maria, et al. "Science system path-dependencies and their influences:
nanotechnology research in Russia." Scientometrics 107.2 (2016): 645-670.
61 Al-Mubaraki, Hanadi Mubarak, Ali Husain Muhammad, and Michael Busler. "Categories of
incubator success: A case study of three New York incubator programmes." World Journal of
Science, Technology and Sustainable Development 12.1 (2015): 2-12.
62 Krauss, Clifford, and Keith Bradsher. "China’s global ambitions, cash and strings
attached." The New York Times 24 (2015): 2015.

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Chapter 3: Research Methodology
3.1 Introduction
A proposal is conducted using certain processes that provides an idea about the
techniques of data collection for attaining effective results. There are various approaches for
collection of data that can be undertaken in the proposal. The process and purpose of data
collection will be properly demonstrated63. Thus, the methodology addresses the section which
puts light in the areas of data collections and the processes used for collecting the data in order to
reach the conclusion of the topic.
3.2 Outline of the Method
The paper follows a definite structure for proposing a set of questions which is highlighted in
this section. The outline of the methodology deals in understanding the wide range of options
available for the researcher to carry on with the work. It draws attention towards the actions
which will be taken to accumulate the constructive data. The paper is deigned in such a way so
that sources of data collection and its classifications can be precisely understood. Research
design has an important role to investigate the causes of choosing the specified techniques for
effective collection of statistical data64. A sample of sorting out the collected data is required that
will highlight the mediums used in effective data collection. The analysis of data measures the
63 Walliman, Nicholas. Research methods: The basics. Routledge, 2017.
64 Abdulghani, Hamza Mohammad, et al. "Research methodology workshops evaluation using
the Kirkpatrick’s model: translating theory into practice." Medical Teacher 36.sup1 (2014): S24-
S29.

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entire set of tools to be used in the process of completion of the desired proposal. The sources
depended by this study to collect secondary data are Bloomberg data and good SEO tools that
improves the ranking of the internet sites for authentic data sources.
The period of data covered in the paper, included from year 2015 to 2025, with an aim to
understand how China is going to lead the economies in the future:
 To compare and contrast the economic indicators of USA and China in order to infer
Chinas position in the global market for the period from 2015-2025
 To undergo a macro analysis for appraising China’s growth as an emerging global
commercial economy with an assessment of the sectorial growth and how did it impact
the foreign trade
 To explore the reasons that led China to become a leader to influence the international
markets with respect to GDP growth and per capita GDP
Establish a relationship between collected data and interpret them by using statistical
methods.
3.3 Research Philosophy
The philosophy in a research proposal enables the researcher to recognize the area of the
study by using the proper tools that will help in the process of data collection65. In common, there
are about four major types of philosophy which are followed till data is collected such as
65 Offredy, Maxine, and Peter Vickers. Developing a healthcare research proposal: An
interactive student guide. John Wiley & Sons, 2013.

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interpretivism, positivism, pragmatism and realism. The research philosophy explains about the
essential and distinctive features which will help to understand the aspect of the chosen
technique.
The section of the philosophy is done according to the standpoint of the researcher in
accordance with the proposed questions. This will be done with collection primary and
secondary data from various industries in China and interpreting them to understand how these
data have helped China to appear as global commercial. The researcher needs to gather data
regarding the sectorial growth and interpret how it has increased the amount of foreign trade
which is needed in order to collect data for China in the past ten years66. The proposal works with
real data, which is taken from various authentic sources and show the trend of those data values.
The technique to be followed in the paper is realism because real data will help to bring about the
consequences and reasons that led for such emerging position of China.
3.4 Research approach
Research approach includes the procedures and actions that has to be made for a detailed
explanation of the method of data collection and analyzing the effects of such techniques. The
research approached is based on the nature of desired method used in the process of the proposal.
There are two basic approaches that is considered as ideal for proposing the paper in an effective
manner which are deductive and inductive respectively67.
66 Jagodzinski, Jan, and Jason Wallin. Arts-based research: A critique and a proposal. Brill
Sense, 2013.
67 Mackey, Alison, and Susan M. Gass. Second language research: Methodology and design.
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Deductive approach is known as the method which consists of values and models that has
already been used by other researchers. On the contrary, inductive approach involves the creation
of a new approach in the proposition of constructive data with creative ideas and concepts. The
inductive approach requires the researcher to propose a new approach related to collection of
data module and data set which has not been used previously. According to the research
questions, the topic of the paper deals in understanding the sectorial growth of China that has
made a huge impact for making China as the leader of global businesses. The deductive approach
is ideal for the current paper as the topic deals with realistic data from various sectors that will be
ascertained from the previous study papers and authentic sources. Related researches will be
used for understanding the reasons and outcome which led for such transition of China68.
3.5 Research Design
The key purpose of a research design is to identify the methods and structure followed in the
study of the proposal. The research design is created on the related goals and objectives of the
paper for effective organization of data pattern. The design is based on three precisely created
tools for understanding the structure of research69. The three kinds of research designs are
descriptive research design, exploratory research design and explanatory research design
respectively. The design is chosen on the topic of the paper and the explanatory research design
is the most suitable measure for continuing the paper. The explanatory approach will explain all
68 Blanco, Ángel Fidalgo, Francisco J. García-Peñalvo, and Marisa Sein-Echaluce. "A
methodology proposal for developing adaptive cMOOC." Proceedings of the First International
Conference on Technological Ecosystem for Enhancing Multiculturality. ACM, 2013.
69 Mills, Jane, and Melanie Birks. Qualitative methodology: A practical guide. Sage, 2014.

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the factors that has shifted China’s power as the leader of global markets. The design is also
inclined in explaining the causes and contrast it with the data of United States who has been the
leading economy of global commercialization.
3.6 Techniques for collecting the data
The process to be incorporated in attaining the essential data for proposed questions refers to
usage of an effective technique. Understanding the data type provides a clear approach for
efficient performance of data values. Data to be collected can be either by primary or secondary
depending on the requirements of the topic. Primary data is the collected data from first hand
sources such as experiments, interviews, surveys and depicting the true emotions and feelings
behind the desired outcomes. Secondary data is related to the collected data by other researchers
or authentic sources. The paper requires lots of historical data and so secondary data will help for
effective conduction of the proposal70.
3.7 Sampling and Sampling Size
Sampling is the process of collecting the data from definite sources as per the choice of
technique of data collection from the targeted sources. Secondary data consists of both
qualitative and quantitative data collection techniques71. Quantitative data is collected from
financial statements and surveys from statistical and government sites, while qualitative data is
70 Marshall, Catherine, and Gretchen B. Rossman. Designing qualitative research. Sage
publications, 2014.
71 Faraway, Julian J. Extending the linear model with R: generalized linear, mixed effects and
nonparametric regression models. Chapman and Hall/CRC, 2016.

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gathered from newspapers, journal articles, transcripts and interviews conducted previously72. In
the current paper, the data to be collected has to be qualitative and quantitative for empowering
the efficiency of the paper and establish a relationship between the qualitative and quantitative
data. The sample size consists of numerous data from various sectors to depict the sectorial
growth of China and interpret it with the concepts of correlation coefficient. Real data has been
taken from three prime sectors, industry , agriculture and services from 2015 till 201573.
3.8 Data Analysis Plan
Data analysis is the process by which the results of the proposed data is analyzed in an
effective approach. In order to get the desired results, proper statistical tools are applied. The
process undertaken for the assessment of collected data has to be analyzed with respect to the
changes in China’s market structure for the last ten years and interpret the changes made in the
economy. The analysis of the results has to be inferred with respect to market changes in USA
and China and compare the results in an efficient way74.
72 Pickard, Alison Jane. Research methods in information. Facet publishing, 2013.
73 Wang, Can, Yuan Yang, and Junjie Zhang. "China's sectoral strategies in energy conservation
and carbon mitigation." Climate Policy 15.sup1 (2015): S60-S80.
74 Kuzevičová, Žofia, et al. "Proposal of methodology for determining of potential residual
biomass for agriculture and forestry in Slovak republic." Acta Montanistica Slovaca 18.1 (2013)

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ITS ECONOMIC SUPER POWER TO INFLUENCE THE GLOBAL ECONOMY
Chapter 4: Data Analysis, Results and Discussion
4.1 Performance of economic indicators
The analysis has been done by comparing the data of various economic indicators
between US and China. The data considered is the real data of US and China in the period
between 2008 till 2018. With respect to this data, the data for the future period, that is from 2019
till 2025 has been forecasted which is effective to study about the future trends and understand
China’s power in the near future.

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Table 1: Represents the data for the economic indicators in the period between 2007 and 2026 in
US and China
Table 1 represents the real data with respect to the economic indicators such as foreign
direct investment, net flows, inflation, consumer price, export of goods and service, imports of
goods, Gross Domestic Product (GDP) and employment to population ratio respectively75. These
economic indicators are important to study about the economic conditions of the two countries,
US and China and then do a comparative analysis to understand their performance.
Figure 12: Trend in foreign investment and net inflows between US and China
75 Urdinez, Francisco, et al. "Chinese economic statecraft and US hegemony in Latin America: an
empirical analysis, 2003–2014." Latin American Politics and Society 58.4 (2016): 3-30.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 12, denotes the level of foreign direct investment and net inflows as a percentage of GDP
for the year 2008 to 2015. China has a falling trend whereas US shows a very fluctuating trend.
This means that the net inflow will go down for China.
Figure 13: Export of goods and services in US ans China
From the graph in Figure 13,of export market, it is evident that China has a better export
market than that of US. This is because China’s curve for the export of goods and services is
steeper than that of US76. Thus, China will export more goods than US in the forecasted period.
The net earnings from the export market will go up for China as per the forecasted data.
76 Zhang, Anming, et al. Air cargo in mainland China and Hong Kong. Routledge, 2017.

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Figure 14: Trend in Inflation and consumer prices
The distinction between inflation and consumer prices is shown in Figure 14. In the
period between 2008 and 2018, the consumer prices have always shown a fluctuating trend.
However, the trend from the fluctuation shows that the China’s inflation will be lower than US
as evident from Figure 14. Falling consumer prices will attract more buyers to buy Chinese
goods and will generate huge revenues and raise the GDP level of the country.
Figure 15: Import of goods and services for the period, 2008-2025(in billion)
China used to have low imports during 2008 till 2018 as compared with the data of Us in
Figure 15. Both the countries have a rising trend overtime starting from 2008. However, the
trend of the real data reveals the change in the value of forecasted data which shows that the rate
of growth of China’s import will match with that of US in the end of 2015. Therefore, the overall
effect is that the level of import will be same for the two countries such that China will be able to
meet with US import level.

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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Figure 16: Trend in the rate of GDP
The average GDP between 2008 and 2018 was $9071 billion for China while the GDP of
US was $17009.64 which is greater than China’s GDP. However after forecasting it is found that
the average GDP between 2015 and 2025 will be $15189.494 billion for China and $21297.724
billion for US which is still greater than China’s average GDP77. Moreover, it is also found that
the GDP of both the countries is rising although the growth rate is more for china as represented
by the steep slope in figure 16.
Figure 17: The change in the employment to population ratio with respect to ILO estimate
77 Ansar, Atif, et al. "Does infrastructure investment lead to economic growth or economic
fragility? Evidence from China." Oxford Review of Economic Policy 32.3 (2016): 360-390.

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The employment to population ratio represents the number of people working with respect to the
working age population. This shows that the change in the overall employment scenario which is
a falling trend for China. This trend is more for China as shown in green dotted line which means
that the ratio of the civilian labour force are employed reference to total working age population.
4.2 Descriptive statistics
The descriptive statistics has been done by showing the coefficient of correlation in the
economic indicators in the period between 2008 till 2018. After which, the values for 2019
till2015 are forecasted with respect to the trend in real data for concluding the future prospectus
of China.
Table 2: The descriptive statistics of the economic indicators in the period
The descriptive analysis are useful in summarizing data in various ways that provides
meaningful result. The descriptive statistics shows the change in the statistical parameters in the
year between 2007 and 2019. These values say that the change in the statistic values are effective
for the change in understanding China’s position to serve as a leader of all other economies. The
mean and standard error is more in China for indicators like foreign direct investment, inflation,
employment ratio and low in China for export and import values and GDP. From the statistics, it

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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is evident that the data set for the given years spread away from the average value showing that
these variables are are affected by change in market conditions.
The correlation between the indicators, GDP growth, export, import, FDI, consumer price
are found to be negative and very close to zero which means there is no correlation or the weak
correlation between GDP growth and the growth of sector. From the findings of Table2, it is
evident that the GDP growth rate as estimated from mean, standard error, median, deviation,
minimum, maximum, sample variance is more for China than in US. China shows a shorter
deviation of per capita GDP which is lower than USA.
Table 3: Forecasted statistical data to understand the future prospectus of China with respect to
US.
The data for the forecasted period 2019-2025 has been done with respect to the actual
data which reveals that the value of correlation of coefficient between the sectors is improving in
China as compared to US. Overtime, the value of correlation coefficient will improve as the
standard deviation goes down in China as evident from Table 3. US had mostly stable value of

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CHINA EMERGENCE INTO BECOMING A GLOBAL COMMERCIAL LEADER AND
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standard error which lowered with changing times78. This trend reveals that data sources are very
close to the mean and showing a positive growth for the economy in the future.
The findings show that the standard error value is very low which allows the coefficient
value to remain quite stable allowing a higher growth in the future. The mean value is getting
lower such as the gap betwwen the variables s ging down. These findings determine that China is
a very stable economy and is expected to show a growing trend in the future. As a result, it can
be concuded that the trends in the averge eraning of the economy is related to the change in the
growth of the various sectors.
78 Schabenberger, Oliver, and Carol A. Gotway. Statistical methods for spatial data analysis.
Chapman and Hall/CRC, 2017.

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Chapter 5: Conclusions, Recommendations and suggestions
for further work
5.1 Conclusion
The paper attempts to estimate how has China evolved as a global commercial and
gaining a strong position in the global markets. This has been done by showing a comparison
between the traditional global leader, USA and emerging global leader, China with the usage of
several parameters. The estimate is being made with record to cultural and global operations that
have led to a change in the overall market structure of the two chosen economies. These consists
of cultural diversity, overseas operations, global strategic thinking, good negotiator market
outputs, income inequality, per capita production and cost efficient output, population density.
The most effective among them being the GDP growth rates and inflation which calculates the
performance of the economy. China has a diverse culture that makes it efficient to produce
various resources.
China has ample resources that makes it efficient in producing goods at a low opportunity
cost and earn huge revenues. China have learnt from China on how to increase the overseas
operations and increase the sale of the product. US acts as the power house for opening
multinational companies across various countries to dominate their position in the global market.
China has been following the same pattern with increased amount of multinational companies
that have operations in foreign countries. This pattern have significantly lowered the

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unemployment rates with a rise in purchasing power among the people79. As a result, the income
inequality among various communities have significantly decreased that have led to the
economic growth of China.
The key purpose of an economy is to negotiate the ways that will allow China to be the
leader of all economies. This was done with respect to productivity and cost effective
technologies that have increased the per capita productive output in China. US had acquired a
strong position in the world by using extensive technologies that has made life faster, simpler
and easier. China had adjusted itself with the changing market conditions and is now able to
produce goods at low costs which is allowing China to open firms in US. The formulation of
PRC have acted as a catalyst to push up the stagnating condition of China and lead to a rise in
GDP values that alleviated property out of the country. The trend in GDP of China before and
after 2000 reveals the change from low GDP to an upward sloping GDP trend that is backed by
rising exports.
The greatest growth in GDP is seen after gaining a comparative advantage in the
industrial sector that was driven by cheap labor, low cost and price, modern technologies and
cheap exports. China has made the biggest effort by investing in education and technology along
with building a strong network of the industrialized sector. Being a major commercial partner of
US in the area of foreign trade, exchange services, industries, manufacturers, industries and
merchandise have helped China to raise GDP rate on a continuous basis. The key findings from
data analysis reveals that China has a shorter deviation than US in per capita GDP and GDP
growth rate within period 2015-2025 where data are foewcated by taking real data between 2007
79 Bolt, Jutta, et al. "Rebasing ‘Maddison’: new income comparisons and the shape of long-run
economic development." GGDC Research Memorandum 174 (2018).

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and 2019. Industry and service are the two biggest sectors on which China’s growth is
depending. These findings prove that China has strong potential for future growth despite the
trade-war, due to low P-value.
5.2 Limitations, recommendations and suggestions for further work
The paper provides a strong understanding of the key factors that have led China to
emerge as a global commercial. China has an active position in world economy to be global
commercial leader by usage of advanced technologies that increase the efficient output and lead
economies by exporting goods at cheap rates. However, China faces many internal problems
such as debt, bond market fluctuations, housing bubble that have reduced the GDP80. China’s
interest rates are not stable enough to maintain high rate of growth and may receive the threat
from rising inflation rates. Even the rate of unemployment has to be lowered.
Although, most of the GDP is generated from the service and industrial sectors, many of
Chinese people are still dependent on agriculture for the basic sustenance of life. China has to
educate people and provide plenty of Jobs for the unemployed people to balance the employment
rates. This could be achieved by transitioning the Chinese economy into a market economy by
strengthening the private sector. This will lead to further increase in the competition and create
innovate technologies which will provide job opportunities for the unemployed. Not all the
economic indicators have a good value such as the export import market and FDI. China needs to
increase foreign direct investment and build MNCs across countries to reduce the treats from
tariff on export items. Therefore, China has huge potential to lead economies.
80 Besser, Terry L., and Margaret M. Hanson. "Development of last resort: The impact of new
state prisons on small town economies in the United States." Community Economic
Development (2016): 73.

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