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¶ … 2014) about China's inflation rate notes that the official consumer price index in the People's Republic of China is 2%, which is below the official government target of 3.5%. Furthermore, this CPI is at its lowest level in 13 months. The article then discusses some of the causes of this inflation rate, and the implications that it has both for China and other stakeholder economies.
Falling producer prices are leading to the deceleration of the inflation rate in China, and this is generally viewed as being favorable by Chinese leaders. There has been a need in China to push ahead with economic reforms, but this pushed had been constrained by the risk of rapid growth. The country also experienced its largest trade deficit in two years, after exports dropped 18% and imports increased 10.1%. The article noted that some of the data is skewed -- in particular export data -- by the timing of the Lunar New Year, around which production in China generally halts. This would have the effect of skewing year-over-year monthly results when the Lunar...
The country's economy was essentially built on exports of goods, which was facilitated by low costs, giving China a comparative advantage in manufacturing. While this was fuelled by both cheap labor and land, the cost of labor has been rising steadily, and this was leading to increases in the price of goods. Furthermore, China is dependent on foreign fuel sources, and that was also contributing to inflation. As a consequence, there has been significant concern that inflation in China would a) cause social disruptions and b) would put increased pressure on the yuan. A rising yuan would result in a reduction of the country's comparative advantage, ultimately leading to a decline in GDP growth. The prospect of a "hard landing" (Holland, 2014).
Analysts note, however, that China is now in trade deficit, a result of slowing exports and rising cost of…
References
Butt, R. (2014).. China inflation slows to 13-month low. Reuters. Retrieved March 31, 2014 from http://www.bloomberg.com/news/2014-03-09/china-inflation-slows-to-13-month-low.html
Holland, T. (2014). Fears over a tail risk hard landing in China are growing. South China Morning Post. Retrieved March 31, 2014 from http://www.scmp.com/business/article/1431315/fears-over-tail-risk-hard-landing-china-are-growing
China and the World Trade Organization On December 11, 2001, China officially became a member of the World Trade Organization (WTO), opening the country's doors to change and a new economy. One year after china's entry into the WTO, the country reported great success, showing better-than-expected economic growth and fulfillment of its WTO commitments, despite the shaky world economy. The excellent performance of the Chinese economy was clearly demonstrated by its 8% growth
China's Economic Reform An Examination of Economic Reforms in China since 1980 As the 21st century unfolds, China has emerged as a potential political and economic juggernaut that appears to be finding its stride in the international community and marketplace. As the second-largest economy in the world after the United States, the Chinese people have clearly embraced international commerce in a major way. To date, though, while there have been a number
The Chinese policy makers had already managed to implement the efforts in the sense of market liberalization, stabilization and privatization. But in order to ensure that economic growth would follow, they needed to also ensure that the government would act as a facilitating force. Emphasis was for instance placed on the offering of incentives or the improvement of the relationships and collaboration between the private entities and the state
This is not necessarily because the economy will not develop further, but it cannot remain at the same rate. Besides the problems listed previously that can affect the development of the economy as a sustainable economy, the simple fact that China has been developing at this rate for over 20 years is a reason enough to believe it cannot sustain a similar growth over the next 20. There were
China's Rise: The strategic Stake While we have so far discussed the positive economic impact of a growing China from the perspective of Australia, there are also some concerns about China's growing stature and the changing strategic balance. As a communist nation, the U.S. And its allies including Japan have always viewed China with caution. China has repeatedly claimed that it is fully committed to peaceful economic growth as Zha Peixin,
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