Economic Relations between China and the USA - Case Study Example

Article 1 How China could become more Competitive Author: Matthew Kroenig This article is aimed at establishing the economic drivers that have held Washington as the world’s dominant power. As an economist, one should be aware that a huge population plays a significant role in driving the economy of the big cities of the world and has been significant in the rise and rise of Washington. However, over the years, Beijing, the capital city of China is threatening to dislodge Washington from the coveted position due to its growing population and economic growth. This report will therefore explore some of the economic aspects that have been proposed as being behind the change. According to Kroenig (2015), while exploring the subject, argues that in 2021, China will have overtaken the United States as the world’s largest economy. What is more intriguing is the proposition that the military power which is another important factor when it comes to the issue world supremacy, will follow the economic heft. China will therefore be the strongest country both in terms of military and economy. China boasts having the most spoken language on earth. This has been used to create cohesion and encourage economic growth. However, the author uses a different approach to address the subject by focusing on the domestic political institutions. According to Machiavelli, cities expand when everyone stops focusing on the particular good of the activities that are being undertaken. Therefore, the notion that the governments that have representative forms of rule are the ones that can steer fast growth is misguided. The idea of Machiavelli can only be achieved in republics such as China. The idea of China’s rapid economic growth has also been boosted by the view of social scientists who claim that autocracies do not experience smooth economic runs compared to democracies. On top of that, democracies are in a position to access international capital markets and also form strong and reliable alliances that are key in boosting the economy. Therefore basing the argument on that, it is true to say that China has had a smooth economic growth and considering that other super powers seem to have exploited all their efforts and stagnated, it could be the next super power. Democracies are also known to enjoy a built in advantage when it comes to the struggle for global mastery. On a head to head analysis between China and the already stable economies such as the UK and US, one can note that at the time when the latter enjoyed a smooth economic growth, they were experiencing or were having great democracies. A different scenario is viewed when it comes to the autocratic nations such as Germany which despite having good economies almost crumbled after World War II. In conclusion, the political institutions in the United States can be attributed for its smooth economic growth over the years and its rise to become a major super power. The huge population especially in the cities has further boosted the growth. To add on that, security and the massive military base have added on the same. However, with the rise of China which has a far larger population, by 2021, the tables could have turned. Article 2 EU Extends Economic Sanctions on Russia until end of January Author: Laurence Norman The economic sanctions that had been placed on Russia are long from over. After a meeting by the European Union foreign ministers, the sanctions will be active until January 2016. This was resorted to give Kremlin more time to implement the side of the deal that was signed in February where he was to cease fire and develop a peace plan. Russia’s pressure on Ukraine has been an issue of international concern and with Russia failing to honor the February cease fire deal, the ministers had no option but to impose stronger economic sanctions on it. In fact, there was no debate when coming up to the conclusion. The months of stale-ment that have preceded the act were meant to give Russia more time to deliberate upon the promises that it was supposed to honor as its part of the deal on its issue with Ukraine. The pressure is increasing within the bloc and it is supposed to yield a formal dialogue with Vladimir Putin on the way forward. Sanctions weaken a country’s economy. According to the EU officials, the sanctions have had a significant effect in weakening Russia’s economy especially with the recently witnessed drop in oil prices across the world. However, one of the questions that arise are on the relationship that is being severed between the EU and the Eastern countries. Considering that the sanctions were put in place to try and push it (Russia) to cease its attacks on Ukraine, the results are not positive and so the sanctions have not yielded the desired results. Russia did not suffer alone. After the sanctions that were placed on it, last summer it retaliated by also placing bans on a range of EU agricultural exports. This has cost the European firms about $5.7 billion. It will be hard for Russia to bow down to the EU requirements considering that it has not acknowledged that it is the one in the wrong and so the sanctions are viewed as not only illegal but also malicious. Crimea, a region that was annexed by Russia was one of the most hit. The EU extended the ban there by an year with the sanctions placed including an import ban, prohibition of any investments in the region, and banning of EU cruise ships from harboring there. Asset freezes and travel bans are yet to be announced but are due to come in the later days if Russia does not cease its attacks on Ukraine. However, there are countries which view the approach as retrogressive considering that by the EU banning any business with Russia, some of its business allies such as Italy are losing a lot. Therefore, they are advocating for more liberal ways of solving the dispute as the current one does not seem to be yielding any results. In conclusion, most countries are however united when it comes to the placement of the sanctions. Italian Foreign Minister Paolo Gentiloni said that it was important to show unity when it comes to the sanctions and speak in a uniform voice to condemn the attacks on Ukraine. However, he was quick to propose that it would have been important to include Russia in the dialogue. References Norman, L. (June 22, 2015). EU Extends its Economic Sanctions on Russia Until End of January. The Wall Street Journal. Retrieved from. Kroenig, M. (June 24, 2015). How China Could Become more Competitive. The Wall Street Journal. Retrieved from. Read More