Table of Contents
China is one of the biggest international trading associates of the United States of America. In the recent years, China’s worldwide influence has been on the rise, and it is anticipated to become a superpower in the years to come. In contrary to this, the economic superiority of United State of America is viewed to be diminishing. China and United States of America, being the largest economies in the world, have some similarities and differences, especially due to differences in economic and political systems (Kemp 54).
Statement of the Problem
American and China economies are the most dominant and the main drivers of globalization in the world today. China has leaped from poverty through market reforms that have obscured its economic growth to join American as one of the biggest economies of the world. This has made many countries, including United States of America, be convinced that China’s economy is surpassing the American one. The current trend in the economy of China has raised many prospects of its potential to dominate the world economy. Many economists are skeptical about the ability of China to maintain the current levels of economic growth (Kemp 145).
The economy of United State of America is twice the size of China’s economy. In term of capita, American economy is almost 12 times bigger than that of China. The long-term trend in economic development indicates that United States of America grew at a rate that is equivalent to the rate of entire Chinese economy in the last decade. In terms of gross domestic product per citizen, a Chinese citizen shares an average of $4300, which ranks position 94 globally. In contrary, the average share per citizen in United States of America is approximately $47,100. Since China is one of the greatest market bases for American manufacturing, services, and agricultural export product, economic growth from international exports will increase as Chinese economy continues to develop because more Chinese will shift to middle class lifestyle. Even though these gaps are enormous, they normally narrow every year during the last 30 years (Kemp 96).
The net worth of China’s economy is approximately $5trillion, which is much less as compared to American one that stands at $15trillion. Even though China has extremely large population, the unemployment figures are much less as compared to those in the United States of America. This is because China gives gobs to millions of employees in industrial sector due to lower salaries. United States of America normally spends approximately more than 50 percent of its annual incomes, which leads to high economic deficits. This is much more as compared to China. This makes America incur high public debt in terms of percentage of gross domestic product. Furthermore, the external debt owed by United States of America is approximately $14trillion as compared to $400billion owed by China.
Chinese auto market is developing more rapidly as compared to that of America. Nevertheless, the number of vehicles on the road in the United States of America is much more than that in China. Therefore, total consumption of oil is higher in the United States as compared to Chinese one. However, with recent auto market development, oil consumption is expected to rise (Starr 87).
The economic indicators show that American economy remained to be ahead of that of China. It is evident that technology cannot be separated from economic development. In America, there has been more technological advancement as compared to China; that is advancement that has flavored economic development. Personal computer normally represents the productivity of the citizens through the use of technology and provides a platform for innovations. Even though annual sale in China is higher than in America, on per capita basis United States of America is still far ahead. Therefore, China will increasingly become capable, while the individual in American will remain more productive (Starr 45).
Economic productivity is also usually reflected on the employment status of the country. Even though the employment rate is much higher in China, Chinese employment policy is often driven by the need to create jobs opportunities. Therefore, measuring unemployment in terms of those who want and those do not have these opportunities, unemployment rates in China would actually double that of United States. Therefore, this is a burden that is staggering the economic development in China (Starr 66).
China is currently the largest exporter, and this current economic trend is likely to make the state the world’s top trader in the year 2013. Its impact on the global demand for various products will exceed that of the United States. However, China is usually more dependent on foreign supplies and market. It makes raw export to be approximately 3 times less valuable to American GDP as compared to the Chinese GDP (Starr 68).
For more than two decades, there has been a steady market reforms in Chinese economy. China has deepened its state stimulus since the year 2002 and did the same in the year 2008. However, the communist party of China needs to tighten its economic determination; otherwise it will suffer the same fate suffered by Japan. Lack of political will in the Chinese economy will cause stagnation of the economic growth. This will fundamentally make China’s economic dominance an illusion, as it happened with Japan 20 years ago. America should not lose focus due to numerous advantages over the Chinese economy. Americans enjoys high per capita income, vast unexploited natural resources, and large and well trained labor force. Proper investment in these resources complimented with political decrees will make American economy extend its international dominance (Starr 54).