Chinas Economy

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Chapter 1 question 6
If current trends continue, China may be the world’s largest economy by 2020. Discuss the possible implications of such a development for (a) the world trading system, (b) the world monetary system (c) the business strategy of today’s European and U.S. global corporations, and (d) global commodity prices. A) The implications of such a development for the world trading system is that China will basically will be the root of trading. From my perspective, China’s growth of economic will benefit overall economy of world. In the trading system, China will play a major role on deciding the policy and implications how the trading should be done. With its sophisticated export increase do to the rapid increase in technology; China is sharply stepping up exports. With China’s dominant imports and exports trading and taking a big part in WTO, trade as a percent of GDP has grown dramatically, rising to a level far greater than for any country of similar size. B) With its high output of economic growth, in world monetary system, I think China’s currency might be powerful than U.S. dollar or equal or more than other world currency. In monetary system, China’s demands for its large economic development, will put pressure on other global countries how its plays a leading role. The Chinese Yuan will be in the near future a major international currency, benefitting from the strong position and of the Chinese economy and the latest arrangements, and the stability of the Yuan’s value when it is compared to other major currencies. C) The implications in European and U.S. global corporations would be from my perspective that more corporation business will shift to China. With so many corporation works being sent overseas, there is no doubt that China will be leading part in these corporations. China will generally set polices in what is better interest for corporation and China’s economic growth. I think that business strategy will be more controlled by...
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