How did the last economic crisis affect the relations between US and China?

Topics: United States, World War II, Economy of the United States Pages: 12 (2776 words) Published: May 23, 2014


How did the last economic crisis affect the relations between US and China?

Table of contentsPage
Introduction ..............................................................................................................................2 US-China complex interdependence .......................................................................................3 US-China trade transaction ......................................................................................................5 Investment ................................................................................................................................6 Migrations flow ........................................................................................................................7 Reduction of expenditure in US budget ..................................................................................7 Smart reduction ........................................................................................................................8 Conclusion ...............................................................................................................................9 Bibliography ............................................................................................................................11

Introduction
The purpose of this paper is to investigate the financial crisis of 2008 and the resulting consequences for the two biggest powers in the world, United States and China. It also examines the relationships between US and China both before and after the financial crises. The current crisis has swept the world with special emphasis in developed countries, those countries which have most of the gross world product and have a high level of living. Even those who are not experts can describe the consequences of the crisis by the reality that can be, but how far this crisis will go is impossible to predict. The economic crisis affected even the world two biggest economic powers, the USA and China. The US and China are two of the dominant economies in the world today and the nature of their relationship has far-reaching implications for the smooth functioning of the global trade and financial systems. Nevertheless the last crisis is likely to intensify the relationship between the two economies. China needs exports to be growing to maintain job growth and preserve social stability. Trade between two economies has continued increasing, and one of the major export markets for China remains the US. The US and China have to play such a policy beyond nationalistic sentiments, and also to convince their people that in this interconnected world, China and US shall walk together. On the other side, US started to reduce their spending, and these “smart reductions”, are aimed at spending done in the field which does not affect the daily life of the people, for example in army. “They offer a menu of policies—a mix of tax reforms, changes to major spending programs, and new revenue raisers—that could contribute meaningful deficit reduction and help the country confront its most pressing economic challenges.”1 This topic is important for the reason that this economic and financial crisis by many economists is considered as the worst crisis sine Great Depression of 1930. Also, this crisis has affected the two biggest power relations. This was an American shift of policy; from Atlantic to Pacific through doctrine of the president Obama, affects not only economic but also political relations. The methodology I applied in this paper is qualitative. It is based mostly on using secondary resources, such as: different pdf documents, articles etc. Independent variable is financial crises, which means that is the cause that has effecting in the relations between two super powers. Depended variable are USA and China because comes as consequence of the crises. In this paper, I have...

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Greenstone, Michael, and Adam Looney. Brookings. February 20, 2013. http://www.brookings.edu/ (accessed November 28, 2013).
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Riley, Charles. Obama unveils $3.8 trillion budget. CNNMoney, February 13, 2012.
Spar, Karen. "Budget “Sequestration” and Selected Program Exemptions and Special Rules." Office of Management and Budget (OMB) Calculation of March 2013 Sequester, March 22, 2013: 4.
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