China’s economy
China’s economy
While it represented less than a 1 % of the world GDP before 1978, China became a powerful exporter. It took the head of the world exporters of textile industries, shoes, toys, electronic products… Its products have invaded the world, especially after its membership to the WTO in 2001. For two decades this increase of the exports provoked a strong growth which exceedsevery year the 9 %. According to Lemoine (2008), the growth rate of the Chinese economy is doubtless lower than the official figure: closer of 7 % that 9 %. This development leaded for millions of Chinese homes, an increase of the purchasing power and the standard of living. At the same time it became an important outlet and a serious competitor. It develops a policy of foreign investments (inAfrica, Asia and Latin America) to secure its supplies in raw materials and, to diversify its markets. All this explain its biggest participation in the international trade. In 2008, the world economy is hard struck by a financial crisis which finds its origins in the United States. This crisis leaded a fall of the Chinese exports: world stops shopping and China is getting nervous (see to video3). TheWorld Bank revised again in the decline its growth forecasts in China: 6,5 % for 2009 instead of 7,5 % (OECD banks on a Chinese growth close to 6 %). According to her, this slowing down should lead to a decrease of the investments (-15,8 % in February), in an increase of the unemployment and in a transfer of the exports on the internal market.
According to the OECD, the growth of theworld economy should be “negative” in 2009, the Chinese growth cannot “compensate for the negative growth” of industrial countries. Indeed, it became more dependent on the world situation by the interdependences of the business and financial connections. It is thus more affected by the deterioration of the world situation. The effect of training of the Chinese growth about the USA and the EU is stillweak because China remains another marginal market: in 2007, the USA sent 5 % of the exports towards China (less than towards Canada), the EU 4 % of its exports (less than towards Switzerland). But, the Chinese dynamism exercises a strong effect of training on the rest of Asia: 2/3 the Chinese imports result from Asian countries.
And its impacts in the world
The USA maintained a moredynamic economy (4,7 % of unemployment and 3,5 % of annual growth) than the EU (more than 10 % of unemployment and 2,5 % of growth on average). But, this American advantage is fragile: a part of its national debt is held by China and creates an element of vulnerability and political tension between both countries. According to Angelier (2004), China seems to create more protectionist reactionscoming from the USA than from Europe. Indeed, the part of the Chinese goods in the total of the imports of the USA increased in a spectacular way for some years: from 8,6 % in 2000 to 13,8 % in 2004 (for the EU from 2,8 % to 4,2 %). In EU, there were punctual measures as the quotas on the imports of certain products (textile industries), shoes…). It explains by the fact that the underestimate of theyuan affects more the American economy than European because of the decline of the dollar with regard to the euro. It would be possible while the increase of the Chinese local demand (if there was a revaluation of the yuan) is translated by an increase of the production in China and not by one increase of the exports of the USA, by taking into account existing overcapacity and low costs of theChinese economy.
China is an enormous reservoir of low-cost workers which constitutes a competitive advantage on savings with higher salaries. The differences of worker-hand costs are stunning: the hourly average costs with the national insurance contributions amounted to 60 hundred in China in 2002 against $22 in the USA and $17 in France. It is not doubtful that industrial countries suffer…