Chinese economic recovery

9 Apr

Chinese exports and manufacturing have so far this year increased more than the forecast had predicted, indicating continued economic recovery after what has been their worst downturn in 13 years.  Where analysts had expected a 15% rise in exports from the previous year, the real rate from February was 21.8%, due mainly to higher levels of US and South East Asian demands.

But whilst the economy is growing again, it is still far from doing so at its previous double-digit pace. Inflation is also becoming a worry again. Prior to the recession, China could sustain its incredible growth rate because of the large workforce that was available to move from the country side to the cities, as well as by ever expanding factories. However, an issue China now has to face, that it did not before, is that of emerging labour shortage. A combination of the country’s one child policy and more years spent in school means that fewer young people are available for work in the factories, a number that will only continue to increase in the years to come. The Chinese economy is still dominated by manufacturing, so it remains to be seen if the government will be able to manage increasing labour shortage and a growing population of elderly whilst also continue down the road of economic recovery. It should be noted that these are socioeconomic problems that most developed economies will have to find ways to tackle in the near future, but considering China’s massive population and manufacturing power, could it be that theirs will be the most extensive?

http://www.nytimes.com/2013/01/14/business/global/as-chinas-economy-revives-so-do-fears-of-inflation.html?_r=0

http://www.bbc.co.uk/news/business-21710581

http://www.bbc.co.uk/news/business-21992163

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One Response to “Chinese economic recovery”

  1. zk1e11 April 9, 2013 at 10:25 pm #

    One of the major difference Chinese and American export is that China has lots of cheap labors, and these labors actually have only little high-technical stills, they just been told how to do their own part and repeat it several times. I disagree the point above. This is because there are still lots of labors from rural area who came into the city and find the job, they no longer stay in their homeland just do the farm, and there are an increasing number of people are doing so. Indeed, due to one child policy, the young workforce are decreasing now, but this issue only happens in urban area, according to Xinhua, 86% rural labor came into the city and each year there are more people following. More importantly, China nowadays has 1339724852 people (xinhua, 2013), and in fact that the real population amounts are far more higher than the figure above. The old people are also not willing to retire because the pressure and competition from the society. In Chinese culture, there are 4 old people and 1 young person need to be supported by a couple, so they have to work and earn more money as they can.
    This is just few simple evidences that China will not lose their dominating market no in respect of other issues.

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