China’s Effect on the US Economy

By | June 22, 2017

China wants to overthrow the US as the greatest economy. The companies in China are state-owned following their communist ideology. This follows that their government controls the overall processes in China’s economy. With this, they are still on the lower end in terms of cost of living and salary ranges compared with the US. Cheaper manufacturing costs and production provides more opportunities for the Chinese from outsourced employment generated by the US companies. Furthermore, China is huge in infrastructure and real estate industries given that their population is larger compared to any other country. For their other resources, they have imported a huge value from the US to suffice their projects. In fact, they are the largest on importing oil, coal, and soybean among others. China is poor on natural resources, given for a fact that they have been struggling to overcome agricultural challenges. The greatest resource that China possess is the wide availability of labor due to their inflation in population.

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Although China has been catching up with the US economy, the latter is still in on hold of the greater power. Natural resources and byproducts are still being exported to China which makes them quite dependent. Instead of considering China as a threat to the US economy, it can be maximized as leverage. The US is still the governing body when it comes to the policies in trade and bilateral negotiations for their economic benefit. The US needs to always stay ahead of China and to be able to secure this, they must focus on reducing their federal deficit as well as minimizing tax. In addition, investing in education gives an advantage to Americans compared to the Chinese and the product of these would be more efficient labor force towards the continuing economic wealth of the State.

If it were dependent on history, China would have never been a successful country. During the 1940’s, Nanjing Massacre happened in the city of Nanking in China where the military troops of the Japanese overstepped on policies during the Sino-Japanese War. It had affected Americans who were having their businesses in the country. After which, the World War II began, China and the US became allies. The US military efforts came to China along with supplies needed to survive the battle. However, for China’s regime, they were not able to successfully defend their country. China spent years trying to fight for their territory and their growth was not a smooth transition. It was a long battle to keep their ownership of the country. Since then, trade is evident between China and the US which kept their relationship civil.

Through economic reforms, China was able to improve their status as a country. They have continually increased their Gross Domestic Product or GDP and are growing and expanding further and more that what they have forecasted.  In fact, China has overthrown the US in the automobile industry with their increase in revenue of more than 50%. Among other industries that China has greatly improved, their developments gave them a spot as one of the powerful economies including the United States, United Kingdom, Japan, France, and Germany.

In a decade, the current performance of the largest economies can be foreseen where China will have greater economic status than the US. Considering that China’s GDP growth is not as high as it used to be, this should be a wake-up call to the US to strengthen their efforts as they expand their economic success. The lead is still on the West side and with proper strategy and execution, everything will be in their favor. This also follows to all the current powerful countries who can be replaced by the others.