There were no drastic changes to the world economy with China’s economic development; it is just that they have developed (Lockwood 2). The implications of China’s emergence to other countries are adapting from competition from labor-intensive groups, suggesting reforms to induce marketability, and the accommodation of demands for international capital. On the positive note, China’s emergence is good because it gives opportunities for trade, investment, and international cooperation that promote stability not only to their own economy but also in the world economy (Lardy 1).
The emergence of China has both positive and negative implications but their uprising can be thwarted in any other way since it serves the purpose of all the multinational companies and also trading nations as well. The World Trade Organization’s aim for sustainable development is threatened by the awakening of this monstrous country hence the Chinese empire continues to surge with their economic prowess. The gains and losses of China will be incomparable to what have the worlds resources could be.
The quest for economic domination will be achieved as it is foreseen but the negative implications of it to our natural resources cannot be compensated. Long war to be fought by the World Trade Organization and the International Monetary Fund to strive for sustainable development will never be completed if China would not join them. China having the world’s largest population (Perkins 1), will surely become a factor to the world economy.
The world economy is not just about trades, transactions and tariffs; it also was designed to gather all the powerhouse nation producers to help maintain the natural resources that we have because it seems to be devastated. The aim of the world economy is not hinder the growth of an uprising country but it was organized to protect the interest of small countries and make barriers for trade for them in accordance to the World Trade Organization. Perseverance was their key for the world economy. Being called as the “sleeping giant”, it serves them well.
But now this giant has awoken and is ready to face the world head on in the most simplistic manner. The recent trends in the US economy indicated that it is slowing down (in economic terms, stagnating). The widening trade deficit with China is forcing many companies to transfer a significant portion of their capital to China (which offers a huge market for American goods). Added to that, the unexpected decrease in retail sales just a couple of weeks ago forced the government to issue temporary bonds to reinvigorate the industry.
The unexpected point drop in the said industry was “supplemented” by the devaluation of the US dollar against the Euro. Many economists think that the US economy is experiencing what Japan experienced 10 years ago: a receding economy. This situation of the US economy can be partially explained by analyzing the movement of interest rates in the country. If US will be able to increase their access to China markets, new opportunities will be open to American Companies. The “Air Service Liberalization” that was talked about during the Second Meeting of the U. S.
-China Strategic Economic Dialogue will double the passenger rates from Us to China that will be beneficial for both parties. Lifting of all-government set limits on the cargo carriers and flights will provide unlimited access for US export products. China’s continuously growing huge population is very significant in the United States tourism industry since millions are expected to travel in United States and a considerable number of their job employment is tourism related. Also, the 200% quota increase on China’s move for Qualified Foreign Institutional Investors will set a deeper penetration and access of US to the China Financial market.
Furthermore, the expansion of Qualified Domestic Institutional Investors (QDII) investment would allow greater investment for US without too much limitation and law restriction. Being wise as always, US merging collaborating with China could offer many possibilities and greater opportunity to rise up and be the “giant” again in all its sense.
Eichengreen, B. and Tong, H. How China is Reorganizing the World Economy. December, 2005. <http://www. aeaweb. org/annual_mtg_papers/2006/0106_1430_1702. pdf> Lockwood. C. China and the World Economy. October 07, 2005 <http://www. tutor2u. net/newsmanager/templates/? a=680&z=1>