Chinese Exports and Its Effects on the Asian Continent

Only available on StudyMode
  • Download(s) : 393
  • Published : April 24, 2012
Open Document
Text Preview
CHINESE EXPORTS AND THE IMPACT ON OTHER ASIAN STATES|
Reasons and examination|
|
The following text is designed to outline the mutual effects from Chinese Exports to the inner Asian Economys. The essay defers to Chinas quick growth in relevance to is exports and gives few figures and statistics. The Conclusion derives from evaluating several Resources as well as Graphs given in this context and also contains own opinion.| |

|
22.03.2012|
|

Chinese Exports and its effect on the Asian Continent

“Ask what has been the most stunning economic event of the past century, and many people might cite the case of China in the two decades since it opened up. In that time the economy has grown more than fivefold, incomes have quadrupled, and 270m Chinese have been lifted out of absolute poverty. Yet with a couple more decades’ hindsight, that achievement might be superseded by what may now be about to happen in the world’s most populous country. ……The coming two decades, on the other hand, offer the possibility of an even more extraordinary pace of economic change.” The Economist

March 10th, 2001. p.23

First, Asia´s exports in china increased heavily in 2002, since this was the year China joined the world trade organization an demand machiner and various producing components it couldn´t make on its own. Therefore, other countries became a crucial part of China´s supply chain, resulting in increased exports (Figures 1-3) One thing to note about China manufacturing is the Kind of products they are exporting. There is no focus on one sort of product, there is a vast variety. For example the most frequently exported good from China to the U.S. was computer equipment in 2006 (total sum of 28.9 billion $). The Silicone needed for the production of these goods, is one of the main goods the U.S. exports to China.

This variety of exported goods is mainly the reason for its economic growth as well as rapid accumulation of labor and the continuing incorporation of this human capital. “it accounts for 44.1% of cross-province TFP differences and 36.6% of within-province TFP growth; a 10% increase in the export variety of all exporting industries leads to a 1.4% productivity increase in China (as a weightedprovince average).”

Interaction, relation and effects on other Asian countries
Other than its neighbours` stagnating or decreasing figures, Chinas share in the World export kept growing over the past years (figure A). Ever since 2002, Chinas growth rate of exports stood in double digits. So it is no surprise the rise of China during the past decades has lead to many concernes in its Asian Neighbour states, asuming a threat to their own economic performance. China´s import inputs for processing depend more intensively from East Asia then from the rest of the world, more than 44 %. This is a significantly higher rate than in other countries outside of Asia. The logical conclusion to this is, that a drop in Chinas Exports results in a severe decline of exports from other Asian countries. This goes hand in hand with a decreased GDP as for most Asian states are relatively dependent on exports . So export demand shocks China suffers are handed over to other Asian states. These can be seen at the positive correlevance from the figures 1. – 3. By using a gravity framework Eichengreen et al. (2007) found out, that increasing Chinese exports had a positive effect of high GDP/Income countries in Asia as for Japan, Singapore and South Korea as well as average GDP/Income countries such as Malaysia and the Philippines. On the other hand, a negative effect takes place on low income Asian countries, such as Bangladesh, Cambodia, Sri Lanka and Pakistan. This is due to the above mentioned fact, that China through its allocation and incorporating of labor( the main factor for its growth in exports) challenges the labor of low income countries in Asia, who are dependent on labor for their own export performance....
tracking img