Macroeconomics of China and U.S.

Macroeconomics of China and U.S.

Introduction

China is the middle of the developed country and under developed country. China is experiencing revolutions in the field of industry and information. Each day brings new ideas, concept and revolution with the help of technology in China. Macro economics of China is changing variably. Factories are producing all goods including electronic appliances. On the other hand, United Stated of America is already a developed country and one of the countries of G-8 nation. It is also observed that Economy of United States has adversely affected last decade. China has got three sectors for economy such as rural and peasant economy, low-technology with cheap labor economy and information based sector. Each sector deals with specific laws.

Discussion

China's Economic Growth

China's currency is yuan. The success of China is totally dependent on the low and cheap labor, who picked by number of multinational companies. China has very hard working labor, making China an economical, stable country. Things, which are less than 8%, are considered unstable in China, according to the economists. There is a huge rise in the history, if we see China raised as a poor country to a huge economic power within 28 years. China's economic story is the greatest story of economic success for the entire world. Economic reforms were introduced in 1979, China's real gross domestic product (GDP) was at the rate of 9.7% annually, considered as an average. The economy of China showed 11 fold increased. The real per capita (GDP) has grown to 8 fold. It also affects the world ranking, as it rose from 27th to the 3rd. There are also some other measurements, which showed that China has already become the world's second largest economy of the world. If China is progressing with respect to the economy in the same way then, it will be the largest economy within a decade.

When China's economy grew with such a rapid rate then, U.S had to keep economical relations with China. There has a relation of trade between United States and China, started in 1980 with the investment of $4.9 billion, and it was estimated at $343 billion in 2006. United States consider China as the second largest trade partner. China is also the fourth largest export and second largest partner for imports. United States is taking full advantage of the low labor cost in China to groom companies. There is always a threat from China to United States from an economic point of view.

There are some calculations by economists that China will take over United States and become the largest economy in the near future. The rise of China can be said as the decline of United States. Many members suggested that China used unfair practices in trade activities such as currency of China is undervalued and also subsidies to domestic producers. In this way, China can easily access to United States' market with goods having reduced costs and also restrict the United States ...