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Mathematics & Economics
Case Study
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Trade Patterns And Structure In China (Case Study Sample)


Select a foreign country and discuss its trade patterns and structure, including a discussion of the following concepts:
1. An overview of the state of the economy. Discuss economic and social indicators.
2. Comparative advantages and areas of specialization and why. What do they export and what do they import?
3. What percentage of their national income comes from trade?
4. The extent of protectionism or trade liberalization.
5. Explain why their exports and imports fluctuate. What are the implications of these fluctuations on their trade balances? Use spreadsheets to demonstrate graphically these fluctuations.
6. Discuss historical changes in their currency and possible reasons for that.
7. Put together the discussion of the relevant issues including the list above in a report form rather than fragmented answers to the different questions.


Trade Patterns and Structure in China

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Trade Patterns and Structure in China

China is one of the largest countries of East Asia with a population of approximately 1.4 billion people. According to the International Monetary Fund, China has the second largest Gross Domestic Product after the United States of America. Its public sector contributes more to the country’s economy compared to the private sector and this is attributed to its political atmosphere. Its trade patterns have a great significance in world trade, especially in the export sector since they sell their manufactured products at very cheap prices in both developed and developing countries. China mainly focuses on importing service products such as professional services. China’s role in world trade is vital, especially because its consumer market grows faster than that of any country globally. The paper will examine the trade patterns in China and what affects its exports and imports in international trade.

According to the International Monetary Fund (IMF), China had a gross domestic product (GDP) growth rate of 1.6% as of December 2017. The IMF compared China’s GDP from the last quarter year to determine the rate at which the economy is growing. It took into consideration personal consumption as well as business investment. Unemployment rate (UE) dropped slightly from 3.95% to 3.9% as of December 2017. Despite the boom in the economy, the UE remains low. Many of the migrant farmers possess their own land and thus are not under pressure to look for jobs for their land is sufficient for survival. Inflation in China has increased while the interest rate has remained constant (The Editorial Board, 2018).
A closer look at the social indicators of China shows a population growth rate of 0.6% between 2005 and 2010 (MariaCaporale, Sova, & Sova, 2015). In 2009, the population of men exceeded that of women. The infant mortality rate decreased gradually from 1997 to date due to better and accessible health care.

China is one of the dominant countries in world trade and specializes in a variety of areas. It is export-oriented in crude oil, which brings an annual revenue of approximately $116 billion (Zhang & Song, 2001). It also focuses on telecommunications and office equipment such as computers, mobile phones, and tablets. China is famous for its traditional manufacturing, which involves transforming raw materials into finished products with the use of manual labor. China has a comparative advantage in labor-intensive goods. Products are thus cheap and easily accepted as imports in other countries. Its main trade partners are the United States of America and Japan. It has an advantage since it borders, major countries such as South Korea, Afghanistan, Philippines, and India, among others.

According to the World Bank Statistics, China’s trade in goods accumulated about 9 percent of the total gross domestic product in 1960. However, due to globalization and expansion in the consumer market, this percentage rose to 37 percent as of the year 2016 (Utoktham, Duval, & Shepherd, 2016). This increase attributes to the increase in exports to European countries like Czech Republic, Poland, and Luxembourg, among others. Trade in services accumulates to about 29% of the percentage of GDP as of the year 2016 and increase from 1992’s 6% of GDP. Neighboring countries such as Afghanistan and Japan have increasingly imported China’s labor commonly in areas such as manufacturing industries (Utoktham, Duval, & Shepherd, 2016).

In the early 1990s, the government of China set very high tariffs, especially on finished consumer goods. It would go as high as 140% on products such as tobacco, goods considered as basic ne...

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