Research Essay: Chinas growing economy and the effect on the rest of the world

Research Essay

Composition

Sean Mullen

Everywhere you go today you see labels on the back of items that read “Made In China.” These labels are found on everything from auto parts to computer chips, or even on American flags. China exports over $287 billion worth of goods including computer accessories, household goods, footwear, toys and sporting goods. The United States top imports from china include items such as iron, steel, furniture, leather goods, clothing and electrical equipment. China also exports raw materials such as zinc, nickel, lumber, along with other materials obtained through mining. China has quickly risen to be one of the world’s largest economies. China has transformed from an agricultural country to a country that manufactures goods that are distributed all around the world. China’s rapid population and economic growth has a lasting effect on the United States along with other countries in the world.

Today we live in a society that gets smaller by the day; international trade has turned the world into one big global economy. Like any economy, the world’s economy has several influential countries that affect all corners of the world. The fifth largest economy in the world is that of France, who has a GDP of $2.55 trillion. Germany has the fourth largest economy with a GDP of $3.3 trillion. In 2009 China held the number three spot but surpassed Japan with a GPD of $5.47 trillion in 2010. Japans economy declined in the last three months of 2010 which caused it to fall behind China. Japan however has not taken this status change as a bad thing according to Takashi Shiono who is an economist at Credit Suisse in Tokyo who has stated “China’s domestic expansion is very positive for Japan’s economy. While some people might feel kind of envious, this is a huge opportunity for Japanese companies,” (Kurczy,1).

The number two status with a GDP of $5.88 trillion is China. Many people may look at this as a victory and as a symbol of China’s progress in the eyes of the world. However, many people in China do not look at this as such a good thing. A farmer in the Hebei province said “We are not proud of this at all. As farmers, we have no sense that China’s’ economy has become so big. Farmers earn more money than before, but they have to spend more because of rising prices. Even the price of garlic and ginger has increased to nearly ten yuan per jin.”(Kurtz,1) As a country’s GPD increases so does inflation, and many people in China are afraid of inflation as their countries per capita GDP is 124^th in the world according to the World Bank. This is mainly caused by their massive population of 1,400,900,000. With such a large population China struggles to provide their people with food and clean water. “We don’t have enough food, and prices are outrageous.” Says Yin Jianping who is a cook at a university in Lanzhou, China. (Kurczy, 1).

China has been moving through the ranks of the world’s economies very quickly and many Americans believe that the United States has already fallen behind China’s economy. The United States currently has the largest economy in the world however with a GDP of $14.66 trillion. The United States may hold the number one spot now but with China’s rapid growth it has been projected that by 2020 China’s GDP could reach $28.1 trillion, which would be significantly more than the projection for the United States, which is $22.6 trillion. “But even then the average Chinese citizen will earn far less than the average American on a per capita basis. Moreover, writes Harvard Professor Joseph Nye in today's Wall Street Journal, looking only at GDP growth ignores America's military and soft-power advantages.”(Kurczy,1) This means that even if China has a higher GDP than the United States the average U.S. citizen will still be making more money than the average Chinese citizen. These five countries have the biggest influence on the world’s economy. Decisions and policies that these countries make could be the deciding factor of whether or not someone has food on their table in some other part of the world. For instance if one country decided to cut of trade and stop exporting goods then a country who previously relied on those goods to run their economy would suffer and become affected.

China has been growing over that past couple of years and no one can argue that. China’s GPD has increased along with its population. China’s rapid population growth has allowed the country to increase production, however as the country increases its production and builds more factories another problem arises that affects the rest of the world. China’s industry produces goods but they also produce toxic chemicals that are then released into the air. China’s factories release large amounts of mercury, dust, ozone and carbon into the air which can travel across the ocean and pollute the waters of the North Pacific as well as the rest of the globe (Kirby, 32). Other countries pollute the planet as well but it is China’s rapid growth that is concerning the rest of the world. Today China emits more mercury into the air than the United States, India and Europe combined. China’s cities have been growing rapidly and they have been building factories, power plants and refineries to employ and support the population. “China in particular stands out because of its sudden role as the world's factory, its enormous population, and the mass migration of that population to urban center” (Kirby, 32). If China continues to grow and pollute the air with toxic chemicals then the rest of the world including the United States will suffer the consequences.

China and the United States affect each other in many ways and in a way depend on each other to survive as well as to grow. The United States has been a big factor in China’s economic growth, not only by means of purchasing Chinese goods but also by American corporations outsourcing their work to Chinese workers because they are willing to work for a fraction of the cost that it would take to employ an American worker at minimum wage. American outsourcing to China allows Chinese citizens to take jobs at American companies that would have otherwise employed American citizens. This causes American citizens to lose jobs and there for raises the unemployment rate which hurts the countries GPD. Corporations have been employing Chinese citizens at factories throughout the country that produce materials that Americans use every day.

China’s rapid economic growth may be good for Americans who want to buy inexpensive goods. However it is clear that China’s growth is hurting the United States economy as a whole. The United States produced almost everything after the industrial revolution in factories all over the United States. These factories employed many American citizens and supported many families. Many of these factories however have been closed and their jobs have been sent to China. China exports many goods such as computer accessories, furniture, clothing, footwear, televisions, along with vegetables and soft beverages. The United States has now transformed from a country of production to a country of consumption. Here in the United States we rely on China for a lot of our goods there for influencing and helping the Chinese economy grow. This is proven by the 2008 consumer cutbacks in the United States, The lack of spending in the United States on Chinese goods caused China’s economy to decline. To balance this China had to implement a $585 billion stimulus bill. “The results were quick and spectacular. China's GDP growth leaped from a recessionary 6% in the first quarter of 2009 to 12% four quarters later.”(Shilling, 54) China has grown to the world’s second largest economy because of the United States rapid spending habits. If the United States stays on the same track then China’s economy may soon surpass America’s economy. It is not too late for the United States however; if the United States stopped outsourcing and opened up more factories it would cause the unemployment rate to go down as well as the GDP to increase. China and the United States influence each other in both positive and negative ways.  “Much of the world's commercial electronics are labeled "Made in China," and China now seems to be the only growing economy”(Donahoe, 5) While China continues to grow the United States unemployment rate continues to grow as well and can be directly connected to corporations outsourcing work to China. China’s rapid growth has a lasting effect on the United States and other countries in the world.

References

Shilling, A. Gary. "Hard Landing for China Hard Times for Us." Forbes 187.3 (2011): 54 .  Academic Search Premier 16 May 2011.

Kurczy, Stephen. "World's top 5 economies: Most Americans already think China is No. 1." Christian Science Monitor , Pg. 1, 14 Feb. 2011 Academic Search Premier. 16 May 2011.

"Fact Sheet on U.S. Imports from the People’s Republic of China." GlobalHealth.gov. Web. 20 Apr. 2011. <http://www.globalhealth.gov/news/factsheets/fs111308.html>

.

Kirby, David. "ILL WIND BLOWING." Discover 32.3 (2011): pg, 56-65. Academic Search Premier.  Web. 16 May 2011.

Donahoe, Daniel N., and Michael Pecht. "Are U.S. Jobs Moving to China?." IEEE Transactions on Components & Packaging Technologies 26.3 (2003): 682. Academic Search Premier. Web. 16 May 2011.

"CIA - The World Factbook." Welcome to the CIA Web Site — Central Intelligence Agency. Web. 16 May 2011. <https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html>.