Economic Performance of China in the World Trade Organization

Name
Instructor
Course
Date
ECON 1100 Basic Macroeconomics- The Economic Performance of China
Background
Reforms have led to the growth of China and improved productivity, but the country still lags behind the industrialized countries. China’s entry to the World Trade Organization (WTO) in 2001 allowed the country to access the global market more than ever before (Zhang and Yong 80). The country’s economic growth has accelerated in the past three decades where emphasis on manufacturing more countries importing Chinese products. Despite the growth of private businesses, the state controlled economy makes it difficult to do business there for foreigners. The macroeconomic indicators on GDP, inflation, unemployment, government surplus the discount rate and exchange rate show that there has been stable growth closely linked to the government control of financial risks and growing exports.
Section 1: Analysis of Indicators1. Real per capita GDP, annual and growth rate

China - Gross domestic product in current prices (billion us dollars)


Real GDP growth (Annual percent change)     2007200820092010201120122013201420152016201714.29.69.210.69.57.97.87.36.96.76.9Source
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China’s GDP has grown in the past decade except in 2016, where there was a -0.04% decline in the Gross domestic product in current prices when compared to 2015. In other words, the total gross value of the resident producers in the country and product taxes and less the subsidies are excluded in the value of products are considered. In the past five decades, the average annual GDP growth is approximately 8% (IMF). From 1991, China’s Real GDP growth rate has been above 5%, even during the 1997 Asian financial crisis, but was 14.3% in 2007 and declined to 6.9% in 2017. Nonetheless, the real GDP per capita has grown in the same period from the US $3,571.45 to the US $ 12,014.61 in ten years later in 2017 (IMF)
2. Inflation Rate


Source: https://data.worldbank.org/
The inflation rate in China as measured by the Consumer Price Index (CPI) was 4.82 % in 2007, which increased in 2008 to 5. 93%, then fell to -0.73%, but was 1.59% in 2017 has been below 3.0% from 2012 to 2017. Generally, China has been able to reduce the inflation rate in the past ten years, and the Chinese government targets inflation of around 3%. The production price index (PPI), which measures wholesale inflation, is likely one of the causes of decreasing inflation rate, and especially in the past two years where there have been growing trade tension since the election of President Trump. The price of oil has also decreased in the past four years resulting in a limited impact on the economy.
3. Unemployment Rate
Using the unemployment, total (% of total labor force) (modeled ILO estimate) measure the unemployment was 3.76% in 2007, but increased to 4.36% in 2008 and 4.29% I 2009 during the global financial crisis. The unemployment rate rose slightly from 4.34% in 2011 to 4.68% in 2017. The labor market in China has remained stable in the past five years, despite the rising cost of manufacturing, which has affected the level of job opportunities in urban areas. The unemployment ...