Economic Reform In China

Superior Essays
After initiating market-oriented reform in 1978, China experienced the most rapid economic growth and social development recorded by any nation. In the past three decades, China has seen an increase in industrialization, liberated foreign trade and investment, and encouraged privately owned businesses, all of which contribute to the country now boasting one of the largest GDPs in the world, falling second only to the United States [1] [2]. In December 2001, China joined the World Trade Organization and has since become one of the most open economies in the developing world. Their joining propelled the economic reform in many ways, one of which was a steep drops in tariffs [3]. As China has become an increasingly important player in the global …show more content…
Starting in the late 70’s, both countries were in need of change and were able to turn to one another for stability and growth. China provided cheap goods, on the basis of cheap labor, which helped Americans to afford everyday necessities. America, in exchange provided external demand, stabilizing and propelling China’s export driven growth strategy [6]. The codependency has only grown from there. Foreign trade between them, both imports and exports, accounted for just under 600 million dollars in 2014, making China the largest import trader of the US and the third largest for exports [7]. Beyond trade, commodities, specifically oil, are a clear sign of dependence among all countries, especially these two. In anticipation of China’s continued growth, and therefore, increase in consumption, the oil and gas industry has continued to produce more and more. With the recent slowing of China’s industries, the supply available is now much greater than world demand, thus a fall in prices [8]. China’s decelerating growth has certainly effected the US as we have witnessed the fall in oil prices by more than half in the past year [4]. A last measure of dependence is the relation of currencies between the two countries. China has continued to buy US treasuries as a way to anchor the yuan to the dollar, lowering its value [9]. As of April, China held $1.2 trillion of US debt [9]. These figures stand as arguments supporting the codependence of China and the United States. It is evident from these that a slowdown, or worse, the economic collapse of one could be detrimental to the economic state of the other, if not the global

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