An insight on China's Economy. By Kai and Noah
China is a burgeoning country and is no doubt a superpower, a major exporter and a highly influential state with a military might. But how has China risen to be a superpower? The answer, economics, because it has driven china into what it is now. But that is the past and present, an area too easy to research. Go on Wikipedia and there you go. But we are here to explore further, venture beyond the horizon into the future, where anything could happen.
To deduce the future you have to have a good grip on the present and near past. This will be the base layer, a foundation of sorts. And we will build upon that the tower of China's future economy. China’s economic system is a good example of a socialist market economy. This means that the economy is dominated by the state-owned sector yet there is still a free market. China has adopted this system to adapt to capitalism. China’s GDP is high and it is climbing, yet it is still unbalanced in terms of wealth distribution, with the top 1% having 34% of china's GDP. China economy is reliant on the countries that import their goods such as America and Hong Kong(SAR). This puts China in a position that relies on its trade partner just as its trade partners rely on China for cheap goods.
I alone cannot unwind the knot of China’s future, so I will combine my knowledge with other people's knowledge. China future economic plans are based on reforming the financial system and cutting high debt. They are also working to fix the well-known stereotype “Chinese products are inferior”. They have set their growth rate to 6.5-7% per year by 2020. This is an effort to bolster the economy after it had been facing slow growth and a volatile market. Yet China’s stock market strategy failed the markets plummeted down by 12.5 percent in 2016 compared to Hong Kong’s Hang Seng index 0.6 percent. “China’s stock market is little more than a casino,” stated SCMP as of December 2016, it fared the worst in the 440 countries tracked by the wall street journal’s market data centre. This can really hurt China because investors will be scared off by this bad stock year and go invest somewhere else hampering China’s economy. China is still young in terms of economics and it can be dangerous if china loses its investors. Also china’s domestic consumption is very low. because it is a developing country it has yet to change from a investment centralises economy to a domestic consumption economy. This is where lies a big problem. Market saturation. China has only limited capital to be invested in and this saturates the market. If they transform into a consumer economy it will boost china, as china has the biggest market of consumers.
In the near future, it is not looking that good for China’s economy, if they can get their act right they can prevail. China is expected to change into a consumer economy and that would really start china’s economy again. Overall China’s relation with its main trade partner (USA) has not faltered yet even with US new president. Donald trump is not a concern and frankly he is not going to bring back many jobs from china. But the far future is uncertain, apart from that fact that its GDP is climbing and its population is on a downward curve. An ageing population is never a good thing and could announce lethal for China. China is going through tough times and if its reforms don’t work by 2022 their ship has pretty much sunk.
To deduce the future you have to have a good grip on the present and near past. This will be the base layer, a foundation of sorts. And we will build upon that the tower of China's future economy. China’s economic system is a good example of a socialist market economy. This means that the economy is dominated by the state-owned sector yet there is still a free market. China has adopted this system to adapt to capitalism. China’s GDP is high and it is climbing, yet it is still unbalanced in terms of wealth distribution, with the top 1% having 34% of china's GDP. China economy is reliant on the countries that import their goods such as America and Hong Kong(SAR). This puts China in a position that relies on its trade partner just as its trade partners rely on China for cheap goods.
I alone cannot unwind the knot of China’s future, so I will combine my knowledge with other people's knowledge. China future economic plans are based on reforming the financial system and cutting high debt. They are also working to fix the well-known stereotype “Chinese products are inferior”. They have set their growth rate to 6.5-7% per year by 2020. This is an effort to bolster the economy after it had been facing slow growth and a volatile market. Yet China’s stock market strategy failed the markets plummeted down by 12.5 percent in 2016 compared to Hong Kong’s Hang Seng index 0.6 percent. “China’s stock market is little more than a casino,” stated SCMP as of December 2016, it fared the worst in the 440 countries tracked by the wall street journal’s market data centre. This can really hurt China because investors will be scared off by this bad stock year and go invest somewhere else hampering China’s economy. China is still young in terms of economics and it can be dangerous if china loses its investors. Also china’s domestic consumption is very low. because it is a developing country it has yet to change from a investment centralises economy to a domestic consumption economy. This is where lies a big problem. Market saturation. China has only limited capital to be invested in and this saturates the market. If they transform into a consumer economy it will boost china, as china has the biggest market of consumers.
In the near future, it is not looking that good for China’s economy, if they can get their act right they can prevail. China is expected to change into a consumer economy and that would really start china’s economy again. Overall China’s relation with its main trade partner (USA) has not faltered yet even with US new president. Donald trump is not a concern and frankly he is not going to bring back many jobs from china. But the far future is uncertain, apart from that fact that its GDP is climbing and its population is on a downward curve. An ageing population is never a good thing and could announce lethal for China. China is going through tough times and if its reforms don’t work by 2022 their ship has pretty much sunk.
Sources
“Socialist Market Economy." Wikipedia. Wikimedia Foundation, 22 Mar. 2017. Web. 23 Mar. 2017
Delphi 234. "File:Distribution of Wealth in China.svg." File:Distribution of Wealth in China.svg - Wikimedia Commons. N.p., 20 July 2016. Web. 23 Mar. 2017.
Sudworth, John. "China Approves New Five-year Plan as Li Reassures on Economy." BBC News. BBC, 16 Mar. 2016. Web. 23 Mar. 2017.
"Five-year Plans of China." Wikipedia. Wikimedia Foundation, 8 Feb. 2017. Web. 23 Mar. 2017.
"China Stock Markets among World's Worst Performers in 2016." South China Morning Post. Agence France-Presse, 30 Dec. 2016. Web. 23 Mar. 2017.
Patton, Mike. "China's Economy Will Overtake The U.S. In 2018." Forbes. Forbes Magazine, 29 Apr. 2016. Web. 23 Mar. 2017.
“Socialist Market Economy." Wikipedia. Wikimedia Foundation, 22 Mar. 2017. Web. 23 Mar. 2017
Delphi 234. "File:Distribution of Wealth in China.svg." File:Distribution of Wealth in China.svg - Wikimedia Commons. N.p., 20 July 2016. Web. 23 Mar. 2017.
Sudworth, John. "China Approves New Five-year Plan as Li Reassures on Economy." BBC News. BBC, 16 Mar. 2016. Web. 23 Mar. 2017.
"Five-year Plans of China." Wikipedia. Wikimedia Foundation, 8 Feb. 2017. Web. 23 Mar. 2017.
"China Stock Markets among World's Worst Performers in 2016." South China Morning Post. Agence France-Presse, 30 Dec. 2016. Web. 23 Mar. 2017.
Patton, Mike. "China's Economy Will Overtake The U.S. In 2018." Forbes. Forbes Magazine, 29 Apr. 2016. Web. 23 Mar. 2017.