China’s economic meltdown is predicted by various economics researchers both within China and across the world. The corporate debt in China has increased from 108 per cent to 122 per cent in the one year from 2011 to 2012…
Download file to see previous pages...
The corporate debt in China has increased from 108 per cent to 122 per cent in the one year from 2011 to 2012, and has achieved its highest level in the last 15 years (Roberts). As a result of this, China has become the most debt-laden country in the world. Andrew Batson, the GK Dragonomics Research Director comments on the effect of debt crisis on companies operating in China in these words, “Companies have seen their business slowing down and revenues were not what they had expected. They have bridged the gap by taking on more debt” (Batson cited in Roberts). A researcher from the State Council’s National Development and Research Center, Li Zuojun made a speech on 17 September 2011. This speech made at the Changsha Alumni Organization of Huazhong University of Science and Technology’s internal meeting spread virally over the Internet. A post over the largest social media website of China Weibo got forwarded over 9000 times (Zitan). Mainland media portals like Sina and Sohu also widely reported this information. Li Zuojun noted that banks, local governments, and small and medium-sized companies in China are undergoing bankruptcies that serve as the signs of economic crisis nationwide. In his speech, Li presented four reasons for predicting China as the next stop for financial crisis. Those reasons are economic, hot money, political, and cycles (Zitan). Risky aspects of the economic growth of China Economic The two main causes of the possibility of occurrence of financial crisis in China are the worsening local debt crises and the bursting bubble of real estate. According to Li, the overall economic downturn in China has exposed the small and medium sized companies to financial challenges that have played an important role in reducing the commercial and industrial tax revenues. Local governments in China have suffered from the reduction of revenues because of the depression in the industry of real estate. Local governments in China have immense are bearing the pressure of spending more over a whole range of items that include but are not limited to local infrastructure, national defense, social insurance policies, construction of houses, maintaining social stability, and improvement of the hydraulic structures. However, as the local debts are maturing, local governments are facing even more pressure and are being forced into bankruptcy. In the long run, this would cause the banks to declare bankruptcy and eventually, Chinese citizens would have to bear the burden of the debt. Therefore, Li foresees a full-blown economic crisis. Hot money Although China’s economy is slowing down, the US is undergoing an economic recovery at the same time. This is contributing to the flow of large sums of the international hot money out of China. As a result of this, economic implosion is taking place in China. Political New leaders in China have risen as a result of the leadership transition of the year 2013. The priorities of most of the new leaders are not addressing economic woes of China. It takes anywhere between three and five months for a new leader to expose the past problems after taking charge. Li estimated the mid of the year 2013 to be the most probable recognition of the economic collapse of China. “Following the economic bubble bursting, there will be a subsequent period of suffering. But for the new leaders, this is nothing bad, since they are not to blame for the suffering…With the economic bubble bursting, the new leadership can adopt practical approaches. … New political achievements will be gained more easily, since the starting point is comparatively low”
...Download file to see next pagesRead More
As it is shown in the essay, even with huge upheavals in the western world with hundreds of banks and institutions collapsing, the Chinese economy has proved resilient, none of the banks collapsed, and the economy continued its growth. The main basis of such financial stability was the robust trade that China has taken up since the past decades.
Economic growth is one of the major macroeconomic objectives. Economic growth is regarded as a necessary and desirable feature of modern economies . Economic growth is widely defined as ‘the sustained increase in real per capita incomes’ .
China’s economy is highly developed than that one of India. While India is the 11th biggest economy in terms of the various exchange rates (Chow, 2001). China takes the number two position passing Japan (Runckel, 2002). In comparison of the estimated $1.3123 trillion Gross Domestic Product of India, China posses an average GDP of close to $4909.28 billion (Chow, 2001).
According to the paper higher education plays a major role in social, human and economic development. The role of institutions providing higher education is not only important but also complex. The higher education institutions show a number of different abilities and scope and can have impact on the processes of development through research, teaching and service.
However, the real GDP per person in the country more than doubled between 1963 and 2003 (Parkin 425). In the rest of the world, specifically Asia, the growth in real GDP was even greater.
Specifically, a look at the world's seven biggest economies (United States, Japan, Canada, France, Germany, Italy and United Kingdom) shows that real GDP per person has grown steadily from 1963 to 2003.
ation of Chinese Yuan, and the entire system of the country has captured the attention of international companies, particularly from North America and Canada. After the membership of the World Trade Organization, the developing country has turned into competitive field against
It also allows the countries to enjoy the benefit of economies of scale from the large-scale production of the goods they are best at producing. Under global trade arena countries can also buy other things which other nations are best at
Percentages encompassed in 1980 sum to less than 100 owing to the explanation that contributors depicted meager values. For instance, population in 1980 encompassed undersized statistics. This expounds