The paper "Impacts of the Rise of the Importance of China on the World Economy" is a great example of a macro and microeconomics case study. Before the Chinese government launched the economic reforms and trade policies more than three decades ago, China maintained a host of economic policies that had failed to develop its economy (Lin 2010). After the introduction of the free-market policy in 1979, China’ s economy gradually transformed to become the fastest growing in the world, with a GDP averaging almost 10 per cent each year through 2013 (Morrison 2014).
Indeed, over the last decade, China has become a leading global trade and economic power (Lin 2010). Currently, China is positioned as the world's largest merchandise trading economy, manufacturer, holder of foreign exchange reserves, and destination of foreign direct investment (Morrison 2014). Still, China has maintained several economic policies that are greatly distortive. Examples include undervalued currency and protectionist industrial policies. Within this background, this essay argues that China's economic rise has had more positive than negative implications on the world economy. The fluctuation of world prices Regarding what has been China’ s global impact on global engagement and economic rise, some analysts have argued that the country’ s huge consumption has affected the price of all kinds of metals, fuels and grains to a high level over the last three decades (Teunissen 2003).
Some economists such as Zweig (2008) have argued that around a fifth of the world’ s population, the country consumes more than 50 percent of the cement produced. Additionally, its importation of the various natural resources has grown more rapidly compared to its springing economy (Cox 2012). For instance, a shipment of the iron ore has increased by averagely 27 percent annually over the past half a decade.
In return, Australian mining companies, such as Boart Longyear in Australia have benefitted from the high boom. Despite this, the decline of demand for iron in 2014 led to the decline of iron ore prices by more than 50 percent and subsequent collapse of more than 70 mining companies in Australia (Lannin2014). China's rising demand for basic commodities from the developing nations has also led to increased prices for staple foods and industrial raw materials, including steel, aluminium, copper and rubber from Zambia’ s Chambishi mines.
Millions of farmers from across the globe who rely on revenue from these commodities have had to battle with the rise of global prices. The rise of prices has reversed years of slumping prices (Zweig 2008). Political impacts According to Zweig (2008), a political concern is a need for the resources to sustain its fast growth has led China to implement the “ Beijing Consensus” , which has been inconsistent with the “ Washington Consensus” that until China’ s rise had prevailed in the global commerce since the World War I.
Some critics have argued that the country’ s government has shown little regard for the policies of its resource suppliers. Indeed, it has been argued that China’ s economic support has enhanced the rise of dictators around the globe. Zweig (2008) believes that China has tried to influence its dictatorial allies when its policies trigger instability that threatens the economic interest of China. Indeed, some critics perceived a substantial shift in 2007-2008 when China started to pile pressure on its resource suppliers, including Iran and Sudan (Morrison 2014).
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