Thursday, December 10, 2009
China’s Economic Power Unsettles the Neighbors
How will the world be different with the changing of the economy of China?
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Welcome. This is a blog dedicated to the students enrolled in the CSHS AP Economics classes. Click on the title of the article, read, and click comment.
If China becomes the central economy of the world, it is possible that the central currency will switch to China's. Also, since China mainly exports products, everything will be even worse because they are not fair trade partners.
ReplyDeleteAt the rate China is going they will probably become the central economy of the world. If they do there will be many drastic changes. One will be where we get all of our resources and products. Most of everything in the United States is already imported from China, but if they become the central economy we will buy everything from them. The currency will also change. This will also change how much we will pay for everything. If we were to buy everything from China we would probably go into a larger debt than we are now. China would like to over-charge everything because they would know that we would buy it from them.
ReplyDeleteChina does have somewhere around 70% of the U.S. debt, and they are feasibly the perfect central economy because they are also some of the biggest producers/exporters in the world. Now while I still think The Vatican will remain one of the rickest countries for all of time, China certainly has the opportunity to overtake the U.S. Our currency could change to the Chinese currency, like Allison said, but if this does not happen than the exchange rates will go through the roof. The outlook for the U.S. really does not look good.
ReplyDeleteChina is in charge - we owe so much debt to them and they are a huge producer of exports to not only the U.S. but most of the world.
ReplyDeleteI dont think that our currency will change to the Chinese currency though - I think America is not only much smarter to let us do that, but much to power hungry to let another country be in charge and "own" us.
China scares me to be honest. They have such a huge population that if they wanted to spread their ideals of government (as America often takes license in doing), they could probably easily do it if all other countries sink deeper into debt. It's a bit of a scary prospect.
ReplyDeleteI think it's complete crap that they can change the inflation of their money. Are they the only country that can do that?
The thing that is being misunderstood is the Chinese currency issue. The reason it is so cheap for countries to import goods from China is because the Chinese currency is fixed to the U.S. currency, which is in free fall. This causes the renminbi to be devalued (for example: a product that may have cost 50 million pounds for the U.K. to buy from China now only costs 30 million pounds because the same amount of renminbi is equal to less pounds). It's not about China becoming the economic center of the world, and the standard currency, and the standard governing power. This article has nothing to do with that. The point made is that China's fixed rate currency allows them to out-compete similarly-exporting countries. China's economic growth mirrors that of early 20th century America: polluting, spending, building, booming, unbridled growth. China has yet to learn the economic lessons we've learned in the last century, and are we forgetting that most of their people live in rural, rustic towns with no technology or sense of money? Taking the world by storm won't go the same way as it did 100 years ago. The world is more mature than it once was, and action will be taken against China's growth soon enough (like that massive 145% protective tariff Indonesia slapped on Chinese nail imports).
ReplyDeleteThe biggest changes come when times are worst, and we're getting close.
ReplyDeleteWith the US dollar is losing its value, and the Chinese currency being held stable by the Chinese government, the US can't compete; the dollar isn't going to be the worldwide currency anymore, and that will be a huuuuuuuuuuuuuuuge blow to our economy.
Even other Asian countries can't compete with Chinese exports, their products being so cheap. China is putting everyone else out of work and out of business, and then what? China is rich, everyone else is poor, and then no one can buy even their goods.
Every economy would fall through the floor, and I don't see either the US or China saving anyone then.
China needs to change. If only Obama could translate his hypnotic charisma into Chinese..
Moshe is right on, i could not have said it better myself. it is going to be real interesting to see what happens in the next 5 to 10 years
ReplyDelete