China’s Growing Role in the World Economy Reimo Meier Valter Kolberg
Economic achievements Since the 1970s China’s economy has grown at an annual average of 9.4% The average household saw its income increase twenty-fold over the past 25 years. Since 1980s, new legislation has created new possibilities. The industrial structure has changed: products have become high-tech. Joining the WTO has been a further spur to economic growth.
Economic problems The increasing gap between rich and poor,as well as between urban and rural households. Since 1978, China has unnecessarilybeen repeating basic construction work, while serviceindustries have made up only a small percentage of the national economy. China’s fast economic growth takes on theenvironmentthrough pollution and the waste of resources. Worldwide manufacturing moving to China has increased energy and resource consumption. All these problems are connected: solving onemay create new problems elsewhere.
China in the world The Chinese economy, making up 12.6% of gross globalproduct, ranks third in the world. Number one, America, accounts for 21.1%, and the EU, 19.9% China is now the EU’s second-largesttrading partner after the US, and the US’s third. China has become a power in the world, particularlyin Asia. Chinese economic development has given newdrive to the world economy. China’s trade with the rest of the world keeps growing.
China and theEU Since 1978, trade has increased 40-fold. The EU is China’s largest trading partner. Both China and the EU benefitfrom bilateral trade and investment. China provides a new market that fuels economic development in an EU. Europe has maintained its superiority in highly-skilled labour. Meanwhile, China’s competitiveness inevitably threatens some EU industries.
China and the US US trade deficit and unemploymentcaused by the flood of cheap Chinese products? Morgan Stanley: in the past eight years cheap Chinese commodities have helpedAmerican customers save more than 600 billion USD.
Conclusion By entering the WTO, China made two promises: Firstly, it will abide by international regulations. Secondly, the Chinese government will gradually open its market. PRC is ready and willing to play a greater role in the international community.