Essay about The Unsustainability Of Export Led Economy

1061 Words Nov 13th, 2015 null Page
The Unsustainability of Export-Led Economy In the past decades, China’s exports have increased twice as fast as the world trade, making China the largest exporter worldwide. After examining the contribution of exports to growth since the early 2000’s, Akyüz (2011) points out that approximately one-third of Chinese growth before the global financial crisis of 2007 was a result of exports. With a sharp drop in its exports after the financial crisis, Akyüz doubts whether or not China can return to its former rapid and sustained export-led economic growth after a serious recession. With the sharp slowdown of China’s economic growth rate in the year of 2008, Guo and N’Diaye (2009) also agree that it was due to China’s heavy dependence on exports. Specifically, some advanced western countries, which are the main importers of Chinese goods, were affected significantly during the financial crisis and their purchasing power dropped. Thus, the demand of China’s exports decreased as consequence. In order to maintain its rapid export-led economic growth rate within a sluggish recovery facing global demand, China needed to increase its penetration of markets abroad and enhance its share of the world market in order to maintain its high economic growth. In addition, Guo and N’Diaye analyze how China’s current export-oriented growth affects its key export industries, such as steel, shipbuilding, and machine tools. They argue that China has to accept a substantial reduction in prices…

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