Project: China - Essay Example

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The high level of growth may be attributed to a stable political system, availability of natural resources and abundant skilled labor in…
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Download file to see previous pages The countries integration into the global economy made it one of the world’s economic powers. Openness to international trade is important in establishing economic growth of a particular nation (Tian and Yu 28). International trade ensures expansion at the global scale promotes technological development and allows institutional changes for countries. China’s international trade expanded rapidly since the adoption of the opening policy that opened the global market for china and other nations. An analysis of china’s major trade partners in 2008 indicated that the E.U, the U.S. and Japan are the major international trade partners of China. It is evident that the leading trading partners of china are also the leading trade countries in the world. The international trade between china and leading trade partners may have contributed to country’s economic success (Peng and Almas 10).
China experienced surpluses in both current and capital accounts in from 2002 to 2008 as indicated in table 1. The presence in China’s current account may be due to the country’s exceptional economic growth. According to Anderson (62), the surplus in the current accounts resulted from net trade of heavy industrial products. The increase in trade was due to an earlier domestic boom in these industrial products coupled by an earlier increase in demand for these products. During the same time, there was an increase in national savings that came from the corporate sector particularly the industrial sector. Therefore, It is evident that the increased current account surplus came from the rise of savings over investment trade. An increase in export trade and a decrease in growth rate of exports may have also contributed to increased surplus in the current account.
The economic development in china does not fit the economics of development phenomenon that emphasizes on developing countries running current ...Download file to see next pagesRead More
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