lundi 4 février 2013

China: The appetite of the dragon


Over the last few years China has raised itself between the most powerful and influent countries in the world, that’s thank to their political decisions to open up this communist country to the world. China has known one of the biggest economic growths over the last years (10% of growth)
China has become a very attractive country for worldwide companies.Its development is based on exportation.
Indeed it has built its economic development thanks to its large and cheap labor. China is a country that attracts a lot of companies that delocalized there in order to increase their benefits and to win the huge Chinese market. The Chinese population is up to 1 350 000 000 habitants which means 1 350 000 000 potential buyers.
Besides, the Chinese Market is a relatively new market, in 1970 the Chinese government decided to start a socialist market economy after the death of Mao Zedong in 1976,the government led by Deng Xiaoping decided to open the Chinese market to foreign investments because that would decrease the unemployment ratefrom…….% to 6.5% and that would modernize the Chinese economy while keeping its political regime.
Since 1987,with the industrial boom, China, nicknamed the workshop of the world,hastaken a major role in the industry of textile, iron, electronic andlow quality objects keeping a very low price.


China is really integrated in the international scene, it is member in all the international financial organisms, IMF in 1980, World Bank in 1981, and APEC in 1993 and finally it is part of the World Trade organization in 2001.
The communist ideology doesn’t exist anymore in China; there is a growing idea of the liberal economy in an authoritarian regime with a unique political party.
The Olympic Games in 2008 whichtook place in Beijing comforts China’s position in the international scene
The economists agree to say that China is going to becomethe first economic power in 4 years.
But how long will China stay the first economic power in the world?
Well not that long .First of all because of the political decision made by the Chinese government of the unique born. The strength of China is its young, active and hard working population. This decision will decrease the number of labor and China needs its labor in order to maintain the growth of the economy.
Besides,this decision made by the government to reduce the number of newborns will lead to an aging of the population and that could lead to a problem of financing the retirements.
Moreover, china has a problem in the repartition of its wealth( 15.5% of the Chinese population live  under the threshold of poverty ), the Chinese littoralconcentrating the majority of the population and the majority of the activities whereas the inside stays underdeveloped.
China has also to ameliorate its relations with Japan and South Korea if this country wants to have a major role in the international scene. South Korea is the country that trades most with China(17.1% of Chinese exportations go to South Korea and 9.3% of Chinese importations come for South Korea) but by supporting the North Korean regime the Chinese government is threatening to deteriorate its relations with South Korea.
Besides, China is in conflict with Japan about the Senkaku Islands that both claim as part of their territory. This conflict has already cost to the Chinese government more than b$ 500, and the Japanese companies fled China because very recently a big wave of violent strikes was led against the Japanese companies in China.
Japan is the biggest supplier of China, 11.2% of Chinese importations come from Japan and 7.8% of Chinese exportations go to Japan.
China may have already lost a huge economical partner and it may have even lost its influence in the south eastern Asian countries
Moreover in the future, China will also have to face the competition against India that will become second economic power behind the USA in four years.


China has a lot of advantages that comforts this country as one of the most powerful countries around the world. China is a country that developed itself very quickly and raised itself as a major figure in the international scene. But it has also a lot of improvements especially in the foreign relations field to do in order to maintain its position in the podium of the most powerful and influential countries around the world.

                                                                                Mourad Khaled

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