Superiority Of China

1170 Words 5 Pages
Analysts claim that China will eventually surpass the United States in economic superiority. Due to economic, technological power and rapid growth, China is creeping towards the United States of America (U.S.) at an alarming rate (Garver). China has experienced high growth rates and is viewed as the largest exporter of goods and services. The U.S. has continued to support the rise of China’s power with friendly relations and perceives China as a peaceful country (Garver). The economic dominance of the United States has fell off from what it was, but this does not correlate with China surpassing the U.S. It is time for the U.S. to recognize that China is not going to sit back and let the U.S. continue to have economic superiority over the world. …show more content…
China’s strategy consists of exporting goods at extremely low prices due to a devalued currency. However, China’s strategy of keeping low prices will not hold up over the years for a couple of reasons. China’s renminbi being approved by the I.M.F as a main world currency will make China’s exports less competitive. As overseas central banks make large purchases of the renminbi, it will make the renminbi appreciate (Bradsher). Therefore, China will have a difficult time preventing the currency from appreciating, which in turn will make exports from China less beneficial (Bradsher). Due to the ironclad law, China’s goods will not be as desirable (Trefler 42). Even though the U.S. owes China a large sum of money for the exports brought into the country, eventually the yuan will rise to a level that is no longer competitive (Trefler 42). When the U.S. buys goods from China, the U.S. needs to buy the Chinese yuan to complete the transaction. As the U.S. continues to demand goods from China, it will increase the value of China’s currency. Chinese workers can be paid almost nothing, but none of that will matter (Trefler 43). The value of the currency will strengthened to a point that the wages that companies pay Chinese workers will cancel out by the currency conversion (Trefler 43). In the past, countries would run huge trade surpluses to threaten the U.S., but it never mattered (Trefler 43). In this …show more content…
will sustain its economic superiority over China. The Chinese per capita is significantly lower compared to the U.S. and the quality of the U.S. GDP surpasses the Chinese GDP. As the Chinese per capita is still too low, the country is facing a demographic consequence that will lead to an increase in the elderly. As a result, it will lead to economic decline. The U.S. and other countries will continue to import Chinese goods for now, but the currency will eventually appreciate and make the Chinese currency less desirable. This will destroy one of China’s main drivers for economic growth. Lastly, it is time for the U.S. to realize that China does want to be a world power. As a result, the U.S. needs to widen the technology gap and show the world why no country will ever surpass the U.S.

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