The situation that we have been facing lately with China is an especially interesting scenario. It seems that most mass media aims to use scare tactics that devote too much attention to China’s rapid growth rate and why we should be concerned about it. I know I’m even a little guilty of calling our readers’ attentions to this fact. Now I’d like to elaborate on the flip side: why China’s growth could spur one of the biggest economic expansions ever, both in America and around the world.
One of the big gripes that currently exists with China revolves around the belief that our jobs are going over there, and all we’re getting in exchange is lead-laden toys, some cool electronic gizmos, and a whopper of a trade deficit. While these things are true to an extent, the common feelings regarding this situation seem to overlook how such a fast pace of economic development in the east will ultimately help American businesses.
As the Chinese economy grows, its people will begin to demand more of our goods. This is not just a theory-based assumption but rather something that is already being seen today, by companies such as IBM and industries like timber and personal care goods. As the trade balances of the United States and China begin to drift closer to some sort of equilibrium (though exact equilibrium is by no means certain to happen), Chinese demand for American goods will put Americans back to work. This burst of employment won’t be focused in just labor-intensive things (though manufacturing could see a boost because of increased demand for things like automobiles), and there’s no reason to believe that a growing China won’t demand American services in some capacity. Businesses in the United States will start to grow as they never have before. Of course, this is a sort of never-ending circle in that, as the economy here grows as a result of similar circumstances in China, American demand of Chinese goods will continue to rise.
It will be very interesting to see how the economic situation with China will play out over the coming decade and beyond. The issue that demands our concern should not be that their economy is getting bigger but how that will impact America and the rest of the world. It’s also necessary to consider this not solely from an economic perspective but also in regards to issues like human rights. Conceivably, these things will get better as the nation continues to develop into something that has the potential to be great. It will be the lack of a resolution to such ethical concerns that may ultimately halt and even reverse the explosion in China.
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