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Force of Economic Globalization
The world is changing, and strong countries from various regions including Asia are gaining global economic recognition. Whalley (2009) asserts that the elevated economic growth of China despite the devastating economic effects of the recent global financial crisis has increased speculations that this country will be a global economic power within the next few decades. China is the most populated country in the entire world, and it has used this human resource to revitalize its economy, which may help it attain global economic power in the next 50 years (Whalley, 2009).
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This essay states that China will become a force of economic globalization over the next 50 years as it will offer much to the world, including commodities from its industrial activities, a huge market for products from different parts of the world, and foreign investment opportunities.
Overview of the Current Chinese Economy
The rapid economic growth of this Asian country has left many people contemplating whether the Chinese economy will outperform that of the major economic superpowers — the European Union and the United States. Morrison (2015) explains that the rapidly growing Chinese economy has compelled many financial analysts to hypothesize whether and when the Chinese nation will overtake the United States, which is currently the world’s largest economic power. The current and actual size of the Chinese economy is under extensive debate because its value is simply an estimate. When measured with the use of nominal exchange rates, its 2014 GDP was $10.4 trillion, which is almost 40% less than the size of the US economy, according to the approximate calculations of the International Monetary Fund (Morrison, 2015, p. 8). Its economic growth has been coupled with the empowerment of many people since the country has lifted at least 800 million citizens out of poverty (The World Bank, 2016). Furthermore, it reached all of the Millennium Development Goals in 2015 and played a huge role in achieving these goals globally (The World Bank, 2016). These facts show that the Chinese economy is growing and closing the gap between it and the United States. In the future, this vibrant economy will surpass the current global economic force.
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For a country to gain economic superiority in the world, it is necessary to ensure that the locals enjoy better goods and services at lower prices through controlled commodity prices. Such a thing is achievable only in China because both Japan and the United States, which are currently rocking the world’s economy, have higher prices for traded commodities. It makes these countries and many others spend huge sums of money that could otherwise be used to expand their economies. The Chinese purchasing power parity (PPP) exchange rates increase the measurements of the Chinese economy as well as the per capita GDP. According to the International Monetary Fund, the prices for commodities in China are almost 56% of those in the United States, and, adjusting the for this price, the 2014 value of the Chinese GDP on the nominal dollars to PPP basis is $10.4 trillion to $17.6 trillion (Morrison, 2015, p. 8). Based on this, China outperformed the United States as the largest economy in the world.
Chinese Economic Globalizing Force
China will become a global economic power because the current strongest economies in the world are on the downfall while China is rising. For example, the United States has a heavy military burden that does not add value to its economy but rather extorts a huge part of its GDP (Kamrany & Jlang, 2015). However, China does not have such a burden because it does not invest in its military the way the United States does, which means that its economy is likely to grow further in the future due to a smaller load on the economy. Instead, China is investing in many international programs that will see its economy grow beyond the current expectations to become a superpower in the coming decades. In 2014, the Chinese nation inaugurated major international economic development programs through its actions of financing infrastructure projects in the silk route countries (Kamrany & Jlang, 2015). Such investments are something the world, especially the developed economies, should watch closely because the Chinese government is using them to outperform the historical economic superiors in the future.
China will be a global economic force because its growth in GDP based on PPP has been registering an outstanding increase that has come to surpass that of the United States. Moreover, it will continue to grow in the future, which will provide the country with economic supremacy because other powers are not matching its increasing pace. China has overtaken the United States in the growth of the GDP based on PPP for more than three decades. Morrison (2015, p. 9) asserts that the Chinese share of the global GDP based on the PPP increased from 2.3% to 16.5% from 1980 to 2014 while that of the United States dropped from 24.3% to 16.3% over the same period. With the ever-growing economy and industrious nature of the Chinese population, there is no doubt that this Asian economic giant will be a formidable global economic force in the next fifty years and beyond.
China’s Contribution to the World Stage
China will add much to the world stage, including a market for trading, a source of commodities, and foreign investment possibilities, which are the obvious pros of its becoming the main economic force. Zakkour (2014) asserts that China is the major market because of its large population that consumes a huge portion of the world’s traded commodities. China is a place where international retailers and brands build their stores, engage in e-commerce, sell and market their products, and work with distributors. With the increased economic growth, China will provide the world with a market bigger than it is now because to boost its economic growth, it will require raw materials that it does not have at the moment. For instance, the country has increased its crude oil imports from 28 million barrels per month in 2015 to more than 30 million in 2016, and the growth in demand for this product will likely increase in the coming years (Damon, 2016). This country is the largest consumer of iron ore, copper, and aluminum (De Jonqui?res, 2012). Other commodities the Chinese imports include machinery, electrical equipment, minerals, automotive parts and accessories, medical supplies and equipment, and plastics among many other things (Morrison, 2015). These imports will increase as its economy grows, which means that it will provide a huge market for commodities from many countries across the world.
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Other than providing foreign investment opportunities to the world, China will also provide manufactured goods. Currently, the world is already relying on China for many products and services. De Jonquil?res (2012) explains that China is the second-largest importer and creditor, as well as the largest manufacturer and exporter. China will provide many manufactured products to the world because its production power has surpassed that of both the United States and Japan. Some of the goods this country offers and will continue offering include machinery, vehicles, furniture and bedding, iron and steel products, plastics, and precious metals and stones (Morrison, 2015). As the country works hard to increase its manufacturing and trading capacity, the world will receive much of these and more commodities in the next decades.
China is a rich hub for foreign investors, and it will be an asset to its economic growth due to its policies to increase further foreign investment. One of such policies is to stimulate foreign investment and improve access to the global supplies of natural resources (De Jonqui?res, 2012). This goal will be achieved by increasing foreign investment both inside and outside its borders. In 2010, China welcomed more than 445,244 foreign enterprises, and more are free to join this economic giant (Morrison, 2015, p. 12). The foreign direct investment flows to China rose from $2 billion to $128 billion from 1985 to 2014, and the country was the largest global destination for these funds in 2014 (Morrison, 2015). With the marked future growth of the economy, many global investors will flock to it.
Unfortunately, it is not beneficial for the entire world for this country to become a global economic force. First, the state will create unhealthy competition among other economic powers in the world because it has the capacity to sell its commodities at lower prices due to the cheap and abundant human resources. Second, its economic strength comes from industrial activities, meaning that industrial pollution will be a huge menace to the world resulting in global warming and climate change. Finally, most investors will flock to this country because of the wide market leaving other states with few investors to stimulate their economies. Since China has a huge population, finances acquired from the economy will go back to benefit the locals rather than adding value to the entire world.
China is at the helm of becoming a formidable force of economic globalization in the next fifty years. Its economy has been growing steadily for more than three decades to surpass some of the major European powers. Currently, its GDP is nearing that of the United States, and when the PPP is taken into consideration, then the country emerges to be the world’s largest economy. It will gain superiority in the world because despite facing major global financial challenges, it has remained firm with the major economic competitors that fall behind it in economic growth rates. The country will provide much to the world in the future. For instance, it currently represents a huge market for global commodities including raw materials for its industrial activities. Also, it is a source of investment for foreigners and a producer of goods to the world. The future economic growth of the country will only increase its influence and possibilities.
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