The strength of the economy of China and the future of the economy - Dissertation Example

?Dissertation Proposal Contents Dissertation Proposal Contents 2 Introduction 3 Problem ment 3 Aims and Objectives 3 Justification of the Research 4 Research Methods 5 Conclusion 6 Reference 6 Bibliography 7 Introduction Economic development of a country measured by certain factors related to economics. The factors are the gross domestic product of the country, which relates to the standard of leaving of the people of the country. For developing a country, the government has to take certain measures. For making a sustainable development, the government has to assure that the financial base of the country is good. For making the financial base robust, the government has to use the sources available to them efficiently and should do sector wise development. In the era of globalization, when the economies of the countries connected with each other, the problem in one country can create problem to the whole world. In the year 2007, the economy of the United States has come under trouble. The reason behind the financial depression was that a large number of people got default, as they were unable to pay their housing loans. The bad debt amount of the bank increases at a level that the banks had to declare themselves default. The banks like Lehman Brothers bankrupted. As a result, the economy of the United States tumbled. As the economy of the country was down, the stock market indices also came down at that point of time. As an effect of the incident, the economy of all the countries get into problem as this is an era of globalization (Moseley, 2009). The United States is the biggest economy of the world. When the largest economy of the world was under problem, all the economies get under trouble. The countries, which had trade relations with that country, came under a direct problem. This incident threw questions on the base of the United States economy. If the base of the economy was good, then they could avoid this kind of situation. This paper will research about the strength of the economy of China and the future of the economy. The researcher will analyze whether the economy is strong, or the base of this is as weak as the United States. Problem Statement Economy of China: The Cause of the Development and the Future of the Economy. Aims and Objectives The aim of the research is to analyze the economical condition of China, the developments made by the Chinese government, which made the country one of the most developed countries in the world. The researcher will also analyze that whether the future of the economy is also strong. To make the economy strong, the government has to make certain policies so that the base of the economy becomes strong. The base of the economy means the per capita income of the fellow citizens, the average educational qualification of the people of the country, the purchasing power parity of the persons. If the base of the country is strong, then the resources available to the companies in the country will be good. If the company can utilize the available resources efficiently, then the production will be at its best. If the company managed efficiently by the professionals, then the profit will also be good. The development of a country depends on the performance of the companies also. If the industrial production of the country is good and the number of export-oriented company is a lot, then the country will earn foreign currencies more. The objective of the project is to analyze the robustness of Chinese economy. The researcher will find about the policies of the Chinese government. It is to analyze that whether the policies of the government are favourable for the companies to do business in the country and whether the policy motivates the companies to export to other countries. The researcher will also analyze the sources available to the companies i.e. the labours, raw materials etc. The qualities of the labours will also analyze by the researcher i.e. their competencies, educational qualifications. The purchasing power of the citizens, the gross domestic product of the country, the stock market movements, and the relation with other countries will also analyze by the researcher. Justification of the Research Currently the Euro zone countries are going through a massive debt crisis. The problem started with the debt crisis of Greece. It has seen that the economical growth of Greece was fast since it has joined the Euro zone in the year 2001. The gross domestic product of the country has increased gradually until the year 2007. In the year 2007, the recession affected all the countries of the world. Like all other countries, the recession affected Euro Zone also. Massive amount of debt was outstanding for Greece government. The reason behind the crisis is the fiscal policies of the Greek government, the corruption in the country etc. The governance structure of the country was a failure. The spending style of the government and the people not balanced with their earning at all. They have taken the debt from other countries, which increase the debt of Greece, but there was no such strong source of earning. The economic policies and the governance structure were the reason of the debt crisis of Greece, which also hampered other countries of Europe like Portugal, Italy, and Spain etc. The sovereign debt crisis of Greece and other countries of Europe affected the common currency of Euro zone, Euro. The value of Euro decreases with respect to the other currencies of the world. As a result, the countries with good economic conditions have to take steps to control the situation and for that, they have to tighten the monetary policies of their respective countries. The crisis of Euro zone not only affected the constituents of that zone, but all the countries of the world (Arghyrou and Tsoukalas, 2010, pp. 3-19). In the case of United States, it has seen that there was fault in the economic structure of the country (Mohan, 2009, p.2). From these events it can concluded that the development of the economy throughout a period is not the sign of the future development of the country; but for the sustainable development of the country and holding a strong economic position in the world, the countries have to ensure that they have made the base of the economy strong. China has improved economically in past 30 years constant. The researcher will try to find out that whether the base of the economy is strong by analyzing the causes of development in the past 30 years. Greece has seen economic growth throughout 7 years but they are now under severe crisis (Meghir, Vayanos and Vettas, 2010, pp.8-12). Therefore, the researcher will try to find out the future perspectives of the Chinese economy. Whether the country will resume the growth, or there is some chance so that the growth can affected, it will be analyze by the researcher. Research Methods For find the causes of development in China, the researcher will collect the data related to economy. The data related to growth of gross domestic product of the country, the purchasing power of the fellow citizens would collect by the researcher. The policies of the government like the tax structure of the country, the export policies, special economic zone policies would be analyze. The number of the domestic and foreign companies and the future of the companies will analyze by the researcher. If the policies of the government are favourable for the companies then they will continue business in that country, so the policies of the government are a major factor for the economic development of a country. The resources of a country are a major factor for the development of a country. Therefore, the analysis of the resources will do by the researcher and the resources of a country means the population of the country, the raw material available in the country. The stock market policy development and the movement of stock market indices will also analyze by the researcher. For predicting the future economic structure, the researcher will analyze all the data and make forecast by using some statistical methods like linear model. Linear model will use to do the time series analysis of the stock market (Hocking, 2003, p.7). The technical analysis will use by the researcher for predicting the future return. Conclusion The future economic development of a country does not depend on the past trend only; in fact, it depends on the base of the economy, which will assure the stability of the country. From the past instances, it is clear that a country, which has enjoyed good economic growth throughout a period, may face the financial crisis as it happened in the case of Greece. For avoiding this kind of situation, the government has to formulate a good fiscal policy and make the governance structure transparent. There should be a balance between the earning and spending of the country. A country may be an economic superpower, but it does not assure that the country will remain in that position. A country has to improve constantly and make such policies so that the future of the country becomes secure. The objective of the researcher is to find out the causes of development of China and analyze whether the condition of the country assures a good economic situation for the future. Reference Hocking, R, 2003. Methods and applications of linear models: regression and the analysis of variance. United States of America: John Wiley and Sons. Arghyrou, M and Tsoukalas, J., 2010. THE GREEK DEBT CRISIS: LIKELY CAUSES, MECHANICS AND OUTCOMES. [Pdf]. Available at: http://business.cardiff.ac.uk/sites/default/files/E2010_3.pdf. [Accessed: March 14, 2012]. Moseley, F, 2009. The U.S. economic crisis: Causes and solutions. [Online]. Available at: http://www.isreview.org/issues/64/feat-moseley.shtml. [Accessed: March 14, 2012]. Mohan, R., 2009. Global financial crisis – causes, impact, policy responses and lessons. [Pdf]. Available at: http://www.bis.org/review/r090506d.pdf. [Accessed: March 14, 2012]. Meghir, C., Vayanos, D., and Vettas, N., 2010. The economic crisis in Greece:  A time of reform and opportunity. [Pdf]. Available at: http://greekeconomistsforreform.com/wp-content/uploads/Reform.pdf. [Accessed: March 14, 2012]. Bibliography Fotopoulos, T, 2009. A Systematic Crisis in Greece. [Pdf]. Available at: http://www.inclusivedemocracy.org/journal/pdf%20files/pdf%20vol5/A%20systemic%20crisis%20in%20Greece.pdf. [Accessed: March 14, 2012]. Lucas, R., 1988. On the Mechanics of Economic Development. [Pdf]. Available at: https://7622562056063301181-a-1802744773732722657-s-sites.googlegroups.com/site/intromacroeconomielille1/la-croissance/LucasOnthemechanicsofeconomicdevelopment.pdf?attachauth=ANoY7corYeNLveNhbrcZF0yNZTkiDPtR2DnckbA2C-efXFXIFCQgqClMNRgGvP0GA3TL6KOa5lddjrHyQCBpUJYXJZWS1tQ8z7uUlkPy6izKB2Kt1JDG_aAUAb-hhy0NfCwH5kT3G0J8_gBG58X5XngR9RNViteBssJtLiYJSu4-Z2QIfEyE0poI5Vtxt9f9Qn1PtOVPoh38QtZlyrfUIHmyXfXJcqeO4Uk6VcQB-Z1UZKDyhgcR9tZjXqzfTyjkeeNPHaaEdKy5BgkW43S_icIZ_6xD3_X7Cw%3D%3D&attredirects=0. [Accessed: March 14, 2012]. Read More