China has surged past the U.S. to becoming the largest automobile market in the world both in units and also in dollar figures. China has also defeated Germany and is now the biggest and largest exporter of manufactured goods. The World Bank estimated that China which was the fifth largest economy in the world almost four years ago will now overtake many others including Japan and will position itself in the second position. When the other developed economies suffered the worst drop in economic output and trade, the growth in China remained robust. This was brought about by the decisive intervention from the China's government in the economy and also the defiant optimism of the consumers and companies in China and this propelled the economy of China. However, there are rising concerns in China and these include whether this growth in China is sustainable. There are also strained economic relations with China and the outside world. The Western and Chinese economist's advice that sustaining a global-size economy is not simple in the current state of globalization in modern times, As China continues to navigate towards the larger responsibility in the financial system of the world, they are also running into political and diplomatic headwinds (Michael 2010 p, 34).
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Locally, the economists and the ordinary citizens are concerned that the decision by the government to flood the Chinese economy with so much cash has already created various speculative bubbles especially in hosing and in lending which would burst with very disastrous effects on the economy. Internationally, the pressure on the Chinese government to revalue its currency, and also the renminbi is also strengthening and it is confident to continue increasing. This is because statistics show that the renminbi is fixed at a very low rate against the dollar and this boosts the exports by China and also its economy. This continually angers the trade partners of China (Tiger 2005 p, 12).
The pressure on China to alter some of its policies such as the exchange-rate policy is highly increasing as the economy of China continues to skyrocket. The United States is undergoing gradual and slow global recovery and 10% unemployment and this may cause the increase of the pressure on the Chinese government. China after a drop in exports poured out $585 billion in incentive money into the domestic economy. The Chinese officials also ordered the state-run banks to increase their lending by almost double that amount. This triggered a spree of easy money that helped to create jobs for the migrant factory workers and also it fueled the increase in the prices of assets such as real estate and stocks (Emily 2010 p, 29).
Most of the experts in China feared that much of the stimulus money would be put into unprofitable projects and also bad loans that would be exposed after a few years. In the 2009 China's boom, the automakers sold almost 14 million trucks and cars. The housing prices also doubled. This is a sign that the economy is overheated and at the risk of very serious recession down the road. Beijing is also interested and concerned about this boom.
There is a high rise in jobs in China because there is money in the economy and therefore the economy can afford to pay wages to the employees. These makes the employment levels to be high and therefore this reduces crimes in China because most of the people are busy and also there is the reduction of the dependency ratio in the country as a whole and the economy is bound to grow positively (Tiger 2005 p, 89).
As a conclusion, the private sectors are feeling left out in China and also the employees are making much money of which they need because also every asset has become so expensive and also the housing. The employees have to be very keen as they continue working in China because anything would happen which would lead to massive deployment.
This would affect the Chinese people and the whole world because they stay in a state of unexpectation and this is not good for investment and the economy at large.
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