China - world economic power or one time wonder?
Aneta Bublová
370627
China – is a world’s future economic power or just one-time wonder?
The world has seen the stunning transformation from the closed, self-reliant economy to the free market system open to international trade and investments. China´s economy is one of the most significant current discussions in economy-related issues. The OECD released a new report forecasting the global economy in the future. According to it „The United States (US) is expected to cede its place as the world's largest economy to China, as early as 2016.”1 This essay gives an example of a reason why admiration of Chinese economic growth is exaggerated. China is the second largest economy at the list of countries sorted by their gross domestic product. This is not surprising, taking into account its population and size of the country, what is surprising is the fact that this economy has been growing rapidly during last three decades even when other large economies are experiencing economic stagnation or recession. Statistics conducting by OECD shows this point clearly – the economic growth (measures as annual increases of the gross domestic product - GDP) of China was 9, 2 % in 2009 while this number for the US was -2, 7 %.2
I assume that many studies are only focused on growth of GDP and compare China with the US, Japan or European Union countries economy. As a result Chinese transformation is said to be an economic miracle. However; I think these economies are not comparable. These analyses tend to overlook the theory called “catch-up effect”. It means that “countries that start off poor tend to grow more rapidly than countries that start off rich.”3 This effect may be one of the possible explanations of China´ success. The main reason why I do not believe in China´s future economic power is their political situation which I consider as the crucial weakness of their economy. Despite their successful transformation process of the economy, there has not been any
370627
China – is a world’s future economic power or just one-time wonder?
The world has seen the stunning transformation from the closed, self-reliant economy to the free market system open to international trade and investments. China´s economy is one of the most significant current discussions in economy-related issues. The OECD released a new report forecasting the global economy in the future. According to it „The United States (US) is expected to cede its place as the world's largest economy to China, as early as 2016.”1 This essay gives an example of a reason why admiration of Chinese economic growth is exaggerated. China is the second largest economy at the list of countries sorted by their gross domestic product. This is not surprising, taking into account its population and size of the country, what is surprising is the fact that this economy has been growing rapidly during last three decades even when other large economies are experiencing economic stagnation or recession. Statistics conducting by OECD shows this point clearly – the economic growth (measures as annual increases of the gross domestic product - GDP) of China was 9, 2 % in 2009 while this number for the US was -2, 7 %.2
I assume that many studies are only focused on growth of GDP and compare China with the US, Japan or European Union countries economy. As a result Chinese transformation is said to be an economic miracle. However; I think these economies are not comparable. These analyses tend to overlook the theory called “catch-up effect”. It means that “countries that start off poor tend to grow more rapidly than countries that start off rich.”3 This effect may be one of the possible explanations of China´ success. The main reason why I do not believe in China´s future economic power is their political situation which I consider as the crucial weakness of their economy. Despite their successful transformation process of the economy, there has not been any