Acfta Affect on Indonesia.

Topics: Economics, Overseas Chinese, Han Chinese Pages: 18 (5572 words) Published: May 13, 2011
China-Indo Economic Condition and ACFTA Affect on Indonesia. Chapter 1. China
Brief Introduction of China Economic Condition
1.1 China Overall Economic Condition
1.2 Neoclassical Theory
1.3 New Economic Model
1.4 Limitation
1.5 Relation
1.6 Consumer Roles
1.7 Business Innovation and technology
1.8 Corruption
Chapter 2. Indonesia
Brief Introduction of Indonesia Economic Condition
2.1Indonesia Overall Economic Condition
2.2Optimistic Future

Chapter 3. ACFTA
3.1ACFTA Timeline.
3.2Indonesia and Chinese products
3.3ACFTA impact on Indonesia
3.4Indonesia-ACFTA policies

Chapter 4. Conclusion

1.1China Overall Economic Condition
China has been widely recognized as a super power nation in the future world economy. By playing multiple different roles, as consumers, suppliers, competitors, reformer (innovator) and provider of reliable human resources, China will reshape the world economy. China became a remarkable player by suppressing the production costs, improving technology and services, and has a strong and stable policy for advancing country. In fact, China economic grows so strong and so fast, it urged economists such as Paul Samuelson to advise the world to rethink about free trade policy and comparative advantage. China also encouraged the emergence of anxiety and debate about America's and other developed countries (G8) global competitiveness in the future.

1.2Neoclassical Theory

Traditional economic theory emphasizes on efficiency, allocation and utilization of scarce resources in the most efficient and growth optimum way to produce a more extensive range of uses for the products and services. This view is also called as classical economic theory or neo-classical and it is still prevalent in many countries. More and more countries believe that the economy will grow faster and stable if they meet the requirements such as: sufficient capital in the stock market; the sovereign right for consumers to choose the products and services they need (a business competition) that leads to the automatic price adjustment in the market; economic transactions decisions based on marginal analysis (the ratio of input and output, the ratio of profit and utility calculation), and a balance output (outcome) for every products and other economic resources in the markets to ensure stability. All these requirements indicate the existence of rationality in economic decision based entirely on materialistic, individualistic, and self-interest oriented point of view.

In its development, there are times when there are many cases that show neoclassical economics can’t be applied independently. It needs support and intervention from other institutions (social and political) in order to continue to be an excellent economic development model. The interaction of economic and political practices affect the political-economic activity throughout the world in recent decades, including when capitalist economy countries (Free Enterprise Country) such as US and EU countries managed to triumph over centralized regime economic countries (Socialist-communist countries) such as China (pre-reform period), Cuba, and Laos. The collapse of capitalist competition, and the adoption of capital economic in socialist and ex-communist countries, put neoclassical economic theory back to the top.

China did not avoid the influence of neoclassical and political economy. China economy started to grow rapidly since the reign of Deng Xiaoping. Deng Xiaoping began to open the shackles that hold China economic development for decades in 1979. China begin to held a red carpet events for foreign investors to bring in foreign capital into China in the form of Foreign Direct Investment (FDI). It is not a surprise that, until the late 1990s China is recorded as the largest FDI destination in Asia. Every encouragement and incentive from Chinese government brings a new wave of China...
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