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Discuss the extent to which the fast economic growth of China and growth of its manufacturing exports is to Britains benefit.

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Introduction

Discuss the extent to which the fast economic growth of China and growth of its manufacturing exports is to Britain's benefit. China is emerging as a major force in the world economy with an average growth rate of approximately 10.4% a year in real GDP and is forecast to be one of the world's biggest economies in 2030. However, until then China has a lot of expanding to carry out, at the moment China has a GDP (PPP) of $10.08 trillion while the USA has a GDP of $14.8 trillion. For many years now China has occupied a unique niche in the world's political economy, its vast populace with approximately 1.3 Billion people and a Labour force of 820 million alone mark it as a powerful global presence. However to what benefits do the questionable sustained growth in china benefit Britain and her interests? The matter as a whole is indeed a double edged sword so we should ask whether the actual and potential benefits outweigh the possible and ongoing disadvantages. A rise in a new growing economic power could potentially be beneficial for western countries such as the UK, Europe and the US by lifting the whole global economy and global trade. ...read more.

Middle

Discretionary expenditure is expected to increase by US$120 Billion in 2015. In contrast, there are many sceptics who believe that the growth of china is nothing bad but news for the developed world, including the UK. Since the de-industrialisation of manufacturing in the UK and the rise of China as an economic powerhouse, there has been widespread loss of economic capability. Hundreds of thousands of people have lost their jobs in the past as a result of manufacturing industries relocating their production to the east in search of lower production costs and a figurative pool of cheap labour, and indeed the aforementioned pegged exchange rate making importing cost-effective. Instead of the threat of UK firms loosing global market share, they would rather close down and relocate. This is because China has a comparative advantage in the manufacturing industry as they have high allocative effiency with manufacturing infrastructure. Although suffice to say, the UK has healthy supply-side policies in place (especially in education) so the majority of the work force has subsided into the tertiary sector where workers have a high standard of living compared to Chinese workers. As a result, Western nations are almost entirely dependent on China for their goods. ...read more.

Conclusion

If there were any in place, such as "Quotas" as there have been in the past then china will not sell as much to our markets, instead other countries that carry out a free trade policy will reap the benefits of cheaper prices and more consumer choice. And we can also ask whether the 10% growth rate is sustainable? Rising commodity price force up costs of production so will Chinese produce be as equally cost effective in the future as they are today? In addition the sustainability can be questioned as the Chinese government do not have suitable supply-side policies in place, at the moment about 20% of the Chinese work force is aged between 20 - 30 as the Chinese government had issued a one-child-per-family policy to try and combat the population crises. It is no doubt that China is at the top of the world league table of an aging population. With the addition of growing powers of trade unions in china, all these issues can have a large impact on China's productivity in the future, impacts which may cause less demand for Chinese goods, therefore, less of a positive impact for the UK. Skip to next paragraph ?? ?? ?? ?? Nabil Hjiej-Andaloussi 20101994 Option Group - F ...read more.

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Here's what a teacher thought of this essay

5 star(s)

Many good arguments are made in this essay and it achieves a good balance of advantages and disadvantages. The conclusion is weak and not related to the question however. As for my opinion, it is too early to say but has been mainly beneficial to the UK so far

Marked by teacher David Salter 12/02/2012

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