China the dragon awakes

China: The Dragon Awakes

The theories of economic change as applied to Japan shows that after the World War, Japan rose to become the first Asian industrial power. As of now Japan is still the biggest industrial power in Asia. From being an informal colony, Japan has in the last millennium made inroads into almost all industries with self-reliance. Looking back, the industrialization of Japan began during World War I and continued upwards with the setback of World War II. Japan has been influenced by the west ever since 1850. (Moulder, 2) Thus Japanese development was phenomenal in spite of the fact that Japan has poor natural resources. It depends on imports and exports for growth. Only 14% of the land is cultivable; it also imports agricultural products from other countries. (Hanser, 7)

At the beginning of this century before globalization, Japan was the top of the world's economic powers and its economy was the third largest in the world. From the GDP being at the seventh rank in 1945, it reached the third position by 1966. It went to the first position after the break of the U.S.S.R. It was the only country that joined the league of rich nations from Asia. (Alexander, 3)

Japan has a world wide trade presence and this was possible for it even before globalization. That is because after the Second World War, Japan had begun its own growth and industrialization that was common to all ASEAN nations. The primary dependence was on export of agrarian products. Japan had first invested in itself and built infrastructure and then went on to invest overseas. The investment in other ASEAN countries by Japanese companies allowed commerce to expand. (Chng; Hirono, et. al, 125)

Japanese expansion was possible because of the monopoly it enjoyed with countries in Asia. Not being open to the rest of the world like Japan, China, India and many other countries were limited by the governments in overseas expansions by the investors. Globalization changed all that. For example, after China entered the WTO it became mandatory for the country to allow free trade and also tariff reduction. China has however adapted antidumping actions and China has stringent quality control regulations. This from the beginning of liberalization is good for the country. (Tsai, 95)

On the other hand, the Japanese economy is dependent on raw materials and imports most raw materials from other countries and enters the market with the finished goods. Globalization has made the other countries export raw materials and goods direct to the European and U.S. markets thus competing with Japan. The advantage for countries like China is that they have developed their raw material resources, have cheap labor and are not dependent on importing from other countries. (Finn, 41)

The onslaught of these economies slowed Japan. Thus today the situation is getting changed with China becoming a contender dominating most markets and making inroads into the U.S. while U.S., and other manufactures are being made unpopular. Like wise China is also enjoying political clout in Asia. The growth of China is not only in manufacture but also in the invention and proper use of modern technology and military power. (Finn, 41)

China is predicted to become a global power and in the coming polarization of the world there would be triple set of polarization, of the U.S. And the west, China and India being the three big countries that would matter in the world. (Virmani, 208) Japan finds no place in the scale of the magnitude of the countries operations. The projection of China's GDP is a good indicator of what would come. The projections show that while the GDP was 7.1 as per Goldman Sachs for 2006-2010 the future prediction by the same agency for 2029-30 was 41. That is a great leap that was predicted. (Finn, 42)

However after globalization the Yuan was being paired in Forex. In January 2009 the treasury secretary of U.S., Tim Geithner, made a statement that China has been manipulating its currency, the Yuan -- and this according to him and other economists say that China is set to change the values of its currency. The outburst came after the Yuan strengthened against the dollar -- to eight Yuan to the dollar back in 2005 which since then pushed up the value of Chinese exports overseas. (Wearden, 8)