America vs. China: A So-Called Global War for Economic Supremacy - Essay Example

? America vs. China: A So-called Global war for Economic Supremacy America vs. China: A So-called Global war for Economic Supremacy Introduction The American economic and technological development assisted the nation in becoming a leading economy in the world. The economic specialists are of the view that American fiscal dominance is coming to an end as US currency is losing its value in the global financial market. The growing unemployment in the indigenous Human Resource market is also taken as compelling and strong evidence supporting the presumption of American demise. The economies of China and India are believed to be most significantly emerging markets and therefore, the Multinationals have outsourced their production facilities to abovementioned economies in order to gain cost related advantages. The Chinese nation is identified as best contender for the position of global economic leader. The idea of political influence is closely related with economic power (Friedberg, 2005). The Chinese industrialists' capability to gain economies of scale and scope is currently unmatched in the global manufacturing market. Still, the notable number of economic experts are holding on to the point that US is going down that is for sure but it is not possible for any one country to assume command of the world economy and because of this reason, small islands of political and economic strength will begin to appear in several parts of the world. Based on the above argument it can be established that humanity is indeed moving in the direction of globally integrated economic system. In a new economic world order, the notion of nationalism will further degrade and nations will become heavily dependent on each other to fulfill the basic and fundamental needs and wants of their population (Byrd, 1987). The nations are forced towards developing their core competencies in the fields where they can attain significant level of economic benefits. But, countries also have to outsource practices that they cannot perform both efficiently and effectively. Thusly, the nations are using Resource Dependency Theory in order to manage their economic systems. In short, it can be argued that nations are collectively fighting the semi-permanent international recession. The changing fiscal realities of the world are causing the business environment to modify rapidly and therefore, the companies have to follow the most practical concept of economic rationality that states that the company and the nation as a whole must attempt to minimize its costs while maximizing its financial returns. In the past, economists recommended the nations to attain self-sufficiency but in current times, the notion of self sufficiency is considered equivalent to suicide and economic destruction. The emerging economies of the world are known to focus on mass production and therefore, are in early stages of industrial development. The American economy on the other hand, is working in terms of becoming knowledge-based economy. The American educational and industrial centers are presently engaged in perfecting weaponry and robotics. Additionally, the US government lately commissioned a project that will work in the direction of understanding functionality of human mind. A bunch of scientists is also trying to improve genetic engineering to enable companies to attain increasing cost benefits in the industry of food. The Chinese government is looking to produce consumer products efficiently and therefore, a symbiotic relationship has been developed between US and China as the former economy is dependent on the latter one to acquire consumable goods while, the industrialized country will need help of Americans to comprehend and apply new knowledge. The American society was famous for creating new knowledge and operationalizing it as well. Nevertheless, internet and latest communication infrastructure helped other developing nations in accessing and understanding modern and efficient methods of business management. The Chinese economy however, managed to create effectiveness with the help of focusing on efficiency dimension. The Americans moved forward and entered the intellectual domain of business and technology. Therefore, both of the nations are effective in different levels of operationally. There is no doubt that American new knowledge is useless without Chinese industrial infrastructure and vice versa. The enlightened economic gurus, state that there will be no notion of economic power in few years as all of the regions will attain specialization in a specific domains of business and due to this reason, economic interdependencies are bound to increase and intensify across borders. The countries that were worst enemies, are talking to collaborate regarding managing challenges of the modern era of the 21st century. At the same time, it is imperative to note that the possibility of international military confrontation has become negligible due to increasing and strengthening fiscal interdependencies among nations. The presence of Foreign Direct Investment is taken as an efficient measure of economic interdependencies amongst countries. The exchange of FDI between America and China has grown notably in the past few years and therefore, the latest investment trends are pointing out towards the presence of a collaborative relation between the two featured economies. The experts, who are waiting for Chinese leading economic role in the world, will be greatly disappointed as both of the economic powers are working towards supportive and symbiotic bilateral ties. Literature Review The world has shrunk into a global village and nowadays the international community is majorly made up of international corporations. The era when every nations of the world, was working towards self-sufficiency is over and now the national governments are engaged in collaborative political and fiscal practices. The global political leaders are well aware of the fact that they cannot exist in isolation because they are required to join hands with others. The joining of hands is taking place as the global society is facing problems that cannot be managed by any nation in loneliness (Ghoshal & Bartlett, 1990). The role of international institutions such as United Nations is going to increase manifolds. The elementary purpose of this study is to give people the needed awareness about salient features of globalization that are affecting international economic activities. The international business and commerce engagements are leading towards growing interdependencies in terms of required services and products. The idea of human and social dependency is currently evolving into an international phenomenon. The presence of grudges on a national level has been mitigated by worsening economic realities. Additionally, the cost of production is growing in all regions of the world and therefore, the international organizations are always hunting and seeking places that posses the capability of providing them with concrete cost related advantages. The social dependency was limited to extent of cities, countries and regions in the past and the nations of different regions fabricated alliances in order to manage their interdependencies. But, as the time passed, the information technology transformed the world into a global village. The practices of business also grew on the scale of unanimity. The headless growth of corporate world across nations and regions warranted tighter collaborative measures. The need to collaborate forced the individual nations to form bilateral economic treaties. These fiscal treaties and agreements played a significant role in mitigating national level disputes and nowadays nations are assisting each other regarding completion of common economic goals. The global trade and economic associations have been growing in terms of their political power as fiscal interdependencies are increasing amongst member nations (Guler, Guilln, & Macpherson, 2002). The mention of Chinese economic evolution is imperative to note, as it is the key economic development of late 1990s. The Chinese revolution was based on the idea of providing necessities of human life to every citizen of the country. The above-stated goal was achieved by institutionalized application of socialism. Under the influence of socialism, the government took control of each natural resource in order to provide the public with collective advantages. The government of the nation is being able to fulfill basic needs of major percentage of the local population. The whole idea of Chinese revolution was formulated on a basis of natural resources’ efficient use and deployment. The China is operating with the help of machine metaphor of organization. The country is therefore, looking to enhance the efficiency of internal processes so that it can fulfill the growing needs of the local population (Perry, 2002). The American nation on the other hand, is interested in becoming a knowledge-based economy and therefore, it is known to follow a brain metaphor towards organizational development. The American economy is primarily focused and committed in the direction of creating and applying new knowledge (Cooke & Leydesdorff, 2006). The top minds of the country are currently working on projects of new weapons development and robotics. The American social and natural scientists are working to create new knowledge while, the Chinese practitioners are looking to apply the intellectual novelty on an operational level. In this way, both of the nations are fulfilling each other’s need. The Chinese factories are providing American people with consumer goods whereas; the American laboratories are feeding Chinese industry with fresh intellectual insights. Furthermore, the America is suspected of initiating joint technological ventures with India. The country is ranked the most prominent user of information technology in South Asia and therefore, looking to grow into knowledge based community as well. The complimentary objectives and goals of both the countries have forced them to collaborate in terms of educational development (Carmel, 2001). Additionally, America is working closely with Pakistan in order to fight anti-terrorism war. Thusly, based on all of the previously mentioned examples, it can be said that nations and companies always look to fulfill and complete their strategic objectives and goals by whatever means necessary. The US-China coordination is just based on common economical and technological goals. The nations on the other hand, cannot compete for global fiscal supremacy because their national goals are intertwined and twisted. The notion that China and America are competing in order to gain fiscal lead is illogical and flawed. The major support for China-US collaboration can be developed by noting Chinese currency tactics that the local government is using to keep its currency cheap. The cheapness of financial currency will assist the country in keeping its exports economical in the international arena of trade and commerce. Moreover, the Chinese economic experts are not interested in becoming champion in global market but their objective is to fulfill and meet growing needs of local population. The Chinese governmental offices are least interested in Research and Development and therefore, they are copying American and British technology to meet immediate technological needs. According to leading and historical economic experts, the nations have two strategic choices. The first one is to become an industrialized economy and then, with the passage of time, nations are famous for developing into knowledge economies. The Chinese infrastructure is industrialized and US is operating based on noble cause of creating new knowledge. Both of the strategic objectives lead to the road of synergetic and symbiotic relations. The American economy’s need for consumer goods is substantial in nature and China has the appropriate and suitable level of productive capacity to meet ever-growing demand of American people. The American labor laws are also very strict in terms of implementing lowest wage rate while, the child labor is prohibited and therefore, the local industrialists cannot produce consumer goods efficiently. But, in the case of China, the labor laws are not applied effectively and because of this reason, the Chinese businessperson enjoys a significant level of luxury in terms of using illegal means for attaining cost control. All nations of the world are recognized as blind followers of economic rationality. The economic rationality in the modern era of the 21st century translates into the need for developing a system through which a nation can attain significant level of positive difference between the level of financial input and output. The Americans along with Chinese, Indians, and even Pakistanis are following the policy of mutual and beneficial exchange of goods and services. The time when Russia and America were enemies had gone and currently, the notion of economic benefits is prevailing in the global arena of economics and politics. The educational scholars and researchers must come out of the world where nations were competing for power. In present, no nation can afford to enter into an economic and military confrontation. The economic outlook of the global society and community is becoming ugly and therefore, the major powers of the world are getting more and more interested in pooling their resources and information so that they can develop new and cheaper econometric models. The business world has been noticed to have a significant level of influence on national politics as offices of political leaderships are identified as playing a facilitator’s role in the journey of fulfilling corporations’ economic and fiscal objectives. Few economic experts state that there is no population of individuals in this world but the collection of organizational setups working to maximize their profits and financial returns. The national solemnity and satisfactoriness are the unfortunate concepts that have become meaningless in the era of the 21st century. The US-China relationships can be explained and translated in a following simple but an evocative phrase “The US based organization find it attractive to do business with Chinese ones”. The business professionals find profits attractive and they always seek new and innovative ways and methods of making a profit. The flourishing relations between the two nations simply mean that the road towards organizational profitability of companies operating in both the economies intersects. The joint venture happens between two or more organizations because of common strategic and economic goals. The nations in the modern world are operating like corporations and therefore, they are co-opting in order to manage the poor global market of natural resources. In the past, resources were available in abundance and therefore, economic pressures were minimal. But, with the passage of time, information and internet technology helped the organizational population to increase and due to this reason, natural resources have been depleting on an increasing and growing rate. Interestingly, the upcoming shortage of oil compelled and impressed significant number of countries towards joining hands in order to find new and cheap methods of energy production. The Americans and Chinese are not in love with each other but they are forced towards collaborating by the environment. They are experiencing heavy interdependencies that they are managing with the help of transaction cost theory. Humans were ignorant of each other’s problems, issues, and difficulties when technology was not so common. But, when information technology bridged the gaps amongst nations then, they found out that all of the countries are facing similar problems. As a result, people and organizations joined their forces for fighting out the challenges. After some time, common strategic and operational goals originated and role of international institutions came to the front page of human history. The growing national level collaboration had blessed humans with the greatest gift that is present in the form of World War III’s negligible probability. Surprisingly, when man lived in a cave, he learned the art and science of collaboration so that he can fight wild animals and then, with the passage of time, humans initiated to live in groups and shared shelter and water in order to conserve resources. In the current time, humans are treating the entire globe as a cave and sharing information and resources with each other. Finally, it is humans’ basic, elementary, and fundamental instinct to prolong their survival on the face of the Earth. In time, humans may conquer space and other worlds with the help of synergetic relations that are currently prevailing in between the nations. Findings The key findings of the study are as follows: - Americans and Chinese are not competing but they are collaborating in order to fulfill common economic goals The Chinese are masters of mass production and the Americans are thinkers and therefore, it created a synergetic relationship The prevalent notions are economic rationality, resource dependence and transaction costs while national sovereignty and self-sufficiency died out decades ago The information technology played a notable and significant role in transforming businesses into international entities The world become a global village and as a result, social exchange theory took place across borders and therefore, people came to know that all nations are facing similar problems The presence of similar issues induced nations to form collaborative bodies The possibility of World War III is becoming negligible as FDIs and cross border economic interdependencies are growing significantly The national level networks of collaboration and support are like joint ventures because they are formed to complete a set of established goals and objectives The Americans are joint venturing with Indians and Pakistanis in order to develop in terms of technology and fight anti-terrorism war The Chinese government is attempting to keep their exports cheaper in the global market so that American locals keep on purchasing Chinese makes The humans were known to collaborate when they were living in caves and they are doing the same in the modern global village The social learning and exchange theories are taking place across borders Conclusion This paper reviewed and analyzed the trade relations between China and United States of America. The public is of the view that both of the nations are working in order to win economic supremacy in the global market. But, in reality it is not the case because both are working together so that they can attain and fulfill common economic and fiscal goals and objectives. The Chinese and American governments are well aware of the fact that they cannot survive without each other’s assistance and help. The Americans are secretly helping the Chinese in gathering new knowledge while the China’s firms are fulfilling common demands of an average American. In this fashion, both the giants are engaged in running and managing a symbiotic relation. The world of economics is always famous for considering interdependencies. The interdependencies in the era of the 21st century have become more notable and powerful that they cause the probability associated with the possibility of World War III to diminish significantly. The human existence is moving in the direction of global unification and therefore, we never know that the philosophy of Star Trek may become a solid reality in the near future. References Byrd, W. (1987). The impact of the two-tier plan/market system in Chinese industry. Journal of Comparative Economics Vol 11 (1) , pp.295–308. Carmel, E. (2001). Tactical approaches for alleviating distance in global software development. Software IEEE Vol 18 (2) , pp.22-29. Cooke, P., & Leydesdorff, L. (2006). Regional Development in the Knowledge-Based Economy: The Construction of Advantage. The Journal of Technology Transfer Vol 31 (1) , pp. 5-15. Friedberg, A. (2005). The Future of U.S.-China Relations: Is Confict Inevitable? International Security Vol 30 (2) , pp.7-45. Ghoshal, S., & Bartlett, C. (1990). The Multinational Corporation as an Interorganizational Network. Academy of Management Review Vol 15 (4) , pp. 603-626. Guler, I., Guilln, M., & Macpherson, J. (2002). Global Competition, Institutions, and the Diffusion of Organizational Practices: The International Spread of ISO 9000 Quality Certificates. Administrative Science Quarterly Vol 47 (2) , pp.207-232. Perry, E. (2002). Moving The Masses: Emotion Work In The Chinese Revolution. Mobilization: An International Quarterly Vol 7 (2) , pp.111 - 128. Read More