THE INTERDEPENDENCY BETWEEN THE US AND CHINESE ECONOMIES2 How do two of the greatest economies on earth depend on each other? (china and us) The Chinese economy has risen over the ranks in the past two decades from a middle level economy to be the second largest economy in the world. As per the 2015 financial records, china had a $19.5 trillion as the purchasing power. This made it the largest economy in the world. The European economy boasted a $19.1 trillion while the US had $17.9 trillion. This stats makes china and the US the two largest economies on earth. The main focus of this report is to try and understand the relationship between this two economies. How do they depend on each other? The rise of the Chinese economy For twenty years after the people’s republic of china was founded in 1949, the per capita GDP grew substantially though it was followed by sharp reversals in the growth. The growth can be attributed to the 156 soviet assisted large scale capital intensive projects. It was guided by 6000 soviet advisors. Industrialization was introduced then and it was at its top then. Quality and pace were incorporated in the production systems. Between 1959 and 1962, this economy went down after the trade incentives were worsened. Markets were restricted during this period and material incentives banned. The situation was corrected between 1962 and 1966 where the economy got its productivity back. The GDP continued to grow. This was however to be until there were cultural Revolutions in the country (Mirzayev E, 2015). The 11thcentral committee of
