The Depth Of China Economy Impacts On The U.S. Economy (Essay Sample)
The purpose of this paper is to apply the economic tools learned in class to an area of economics that interests, should focus on a current event that can be analyzed within an economic framework. Should include a brief description and summary of the topic, an explanation of why it is important to study.source..
THE DEPTH OF CHINA ECONOMY'S IMPACTS ON U.S. ECONOMY
The economy was not in a good state during America's last trade war. Is a de javu in the making as the current U.S. President gives aluminum and steel a tariff? Should this occur, it will be rattling businesses of the Americans; likewise forcing products to be paid more by consumers. How is trade war defined as anyway and why between China and the U.S.?
Fundamentally, it is a to-and-fro discourse imposing specific importation tariffs; hence, restricting trade. China's warning specifies fresh trade measures as a response to American economic policy since it was threatened with $100 billion addition in tariffs. With purchasing power parity as a basis, its production of $23.12 trillion made it the world's largest economy. Meanwhile, Europe follows at $19.9 trillion and the U.S. $19.3. (Rossman, 2018)
Although China has a population of 1.38 billion its living standards causes the country to be still poor, comparatively, that is; allowing Chinese companies to wage their employees lesser than in the U.S. Its economy producing merely $16,600 per citizen cannot be in comparison with America's $59,500GDP per capita. Products become low-priced luring overseas manufacturers to outsource jobs in their country and then ship to the U.S.
China's Economy and its Constituents
Economically, China reinforced its progress on cheap exportation regarding equipment and machinery. Its government massively expands on state-owned companies for export due to its minimal profitability returning just 4.9% on assets differing from 13.2% with private firms thereby developing cities as to draw in employees. Thus, real estate covers 25% of its economy. Due to infrastructure constructions being included in the funding, it had massive importation. It was in 2013, however, when it aimed for economic reform because of the threat its 10% annual growth posed. (Amadeo, 2018)
Exportation of China
In 2017, becoming the world's largest exporter was because of its $2.2 trillion exports, followed by the European Union ($1.9 trillion) and the U.S. ($1.6 trillion). 18% were exported to the U.S. contributing a trade deficit of $375 billion. China traded with Africa thru infrastructure investments as fuel exchange increasing trade deals with Latin America and Southeast-Asia. Therefore, the Trans-Pacific Partnership was established by Obama as a way of balancing China's progress, but Trump had the U.S. withdraw from it in January 2017.
China manufactures a lot for foreign companies such as U.S. So, technically, lots of supposedly China's exports are U.S. merchandise. It's the world's largest steel exporter since its primary exportation includes electrical equipment aside from textiles, fabric, and apparel.
Importation of China
As the second largest importer in the world with $1.7 trillion imports after U.S.($2.3), its imports reckon African and Latin American raw commodities such as organic chemicals, metal ores, and most especially fuels. However, it is the largest importer of copper and aluminum in the world. Its consumer's commodities provided a global boom in agriculture and mining. Regrettably, there was over-production of supplies cratering prices by 2015. The country's economic deceleration becomes relative to commodity prices for manufacture.
2018's American list is programmed to exploit produce benefiting from China's industrial policy such as “Made in China 2025” designed for dominating specific strategical sectors -- semiconductors, electric motors, and industrial robots (The Economist, 2018).
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