Impact of Chinese Loans on International Trade

Impact of Chinese Loans on Global Trade

Introduction

By now there is no one who doubts that China will be one of the stars of this century. The enormous potential of its more than 1,200 million people (more than double the total European Union ), both in terms of producer and consumer, will further change the business landscape in coming decades. China is an emerging economy whose needs change rapidly with increasing purchasing power of their society and are developing the country's infrastructure. Though, as China will call in its loans, the effects on the international economy will be adverse. Therefore, China is playing a significant role in the global trade through its call for the loans. The following essay is going to analyze the impact that Chinese loans may have on the international trade.

Discussions

Research has shown that the impact on the global economy will not be good for the other countries than China if China calls in its loans. There will an impact on the trade and the exchange rate in U.S. dollars. The U.S. economy will fall at the first place. There will be economic crisis that will be observed on the international level.

Since the outbreak of the global financial crisis in late 2008, and the world live its consequences, through economic growth reflects a state of fragile recovery, or the debt crisis suffocating ravaged economies of Europe, carrying fraught with serious threats to the presence of the European Union, and the fate is not clear for the currency of international - the dollar - which lost a lot of credibility in light of the collapse of the U.S. economy in a state of decline at the global and local levels.

Under an atmosphere of uncertainty about the global economy, several scenarios present themselves, some of which runs the re-map global economic forces, and the birth of new global economic order, and some believe that what happens is the performance of normal for the capitalist economy, which is a crises and economic volatility part of the its architecture.

There are fundamental questions arise, namely: How long will the cases of uncertainty about the future of the global economy? Will the repercussions of the financial crisis and economic crisis that rocked the world in 2008 and we still live in the last day or that the worst is coming? In order to answer these questions, we take the analysis the following themes: First, the manifestations of the global economic crisis and the potential aggravation

Fragile recovery of the global economy

Global economy has achieved a rate of growth of 5% at the end of 2010, which gave a positive impression about the future for some people, but estimates of the International Monetary Fund argues that the growth rates in 2011 will be in the range of less than estimates for 2010 due to those in the second half of in 2011 the decline in the rates of growth performance of the World, The IMF estimates adjusted for ...