MillerChinaInt

MillerChinaInt - China International Trade Matt Miller...

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China International Trade Matt Miller
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Miller 2 March 1 st , 2005
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Miller 3 Introduction : China is a large country with a thriving economy that is growing rapidly. International trade has been a driving force behind their economic growth over the past decade. Despite trade barriers, strong imports and exports have allowed China to achieve astonishing trade increases year after year. This has aided significantly in the overall economic growth and development of China. Economy : Since 1978, Mao Zedong’s successor Deng Xiaoping and other leaders began to focus on China’s market-oriented economic development. By the year 2000, China’s output had quadrupled (The World Factbook). China’s market-oriented success has been demonstrated by high economic growth rates year after year. In 2003, China recorded a nominal Gross Domestic Product (GDP) of $1.409 trillion USD which ranks 6 th for the highest country GDP overall (WTO). However, if you adjust the number for Purchasing Power Parity (PPP), they rank even higher with $6.449 trillion USD (CIA). This puts them only behind the United States for the highest real GDP. By looking at these numbers alone, one might assume that China is a very well developed country with high living standards, much like the U.S. and Europe. Unfortunately though, that is not the case. Now, let us take the entire population of 1.3 billion people into consideration (UN). If you look at the nominal GDP per Capita, China ranks a negligible 113 th with a mere $1,227 USD! Even after adjusting for PPP, China still only reaches a GDP per Capita of $4,700 USD which ranks them 91 st when compared to other countries (Wikipedia). As you can see, China is not the well- developed country that one may have thought by only looking at its high GDP. In addition to the data above, China still has a large percentage of the population below the poverty line (over 10% in 2001) and the disparity between the rich and the poor keeps increasing (World Factbook). The average rural income is approximately one third of urban income (Wikipedia). Also, there was an unemployment rate of 10.1% in 2003 with some estimates being even higher due to underemployment and consideration of the migrant population (CIA). Furthermore, inflation is on the rise (CPI hit 5.3% in August 2004) and the government deficit continues to increase (USCBC). Therefore, after a more in depth analysis of the economy, it is apparent that although China has a large GDP, they still have a lot of work to do before they are fully developed. International trade continues to be a significant aid in China’s constant growth and development.
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Miller 4 Exports : China’s economy is heavily dependent on exports. They have been able to attain high growth rates by constantly increasing exports to other markets. In 2003, China exports totaled $438.4 billion f.o.b. which was a 34.6% increase from 2002 (USCBC)! The export product mix has remained fairly stable over the past 5 years and includes mostly
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This note was uploaded on 07/17/2008 for the course ECON 508 taught by Professor Fleisher during the Winter '06 term at Ohio State.

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MillerChinaInt - China International Trade Matt Miller...

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