Introduction
Economics is a broad field which has its active importance and recognition in almost every walk of life. There are two different types of economics, which particularly are microeconomics and macroeconomics. There are numerous concepts that come under the umbrella of economics and economic management, while every concept of the same has its own significance. The main perception of this paper is to apply the relevant concepts of economics and management on the Chinese economy. There is a document with the name of “Slower China Growth Signals Days of Miracles are waning” written by James T. Arendy.
Analytical Framework
The first concept which has been identified in this particular analysis is all about Gross Domestic Product (GDP) of China. The concept of GDP is one of the most important and effective concepts from the standpoint of the economics literature, which are used to analyze the total national products in particular. A country with high GDP growth would be more effective and economically sound as compared to a country which has a lower GDP (AREDDY and ORLIK, 1-3). The article identifies that China’s GDP growth will be slower in the upcoming years as compared to its growth of the fiscal year (FY) 2007. In the year 2007, the economy of China grows by a level of 14.2%, but this much growth in terms GDP is not at all achievable in coming years. A cleanup is under the sway of the economy, and the growth rate might touch hardly a level of 7% in 2014 and onwards. Decreasing worth of Chinese products in the international market and escalating corruption in the country are some of the major reasons behind this menace and it would not be effective and perfect for the economy in particular. The strength of the economy would become weaker and weaker day by day merely because of the slow growth of GDP.
The second important concept that comes under the ambit of Economics is Foreign Direct Investment, and it is one of the most important concepts from the standpoint of the economy in particular. Foreign Direct Investment (FDI) always is effective for the countries in particular as far as increasing the foreign reserves is concerned. A country with high amount of foreign reserves would be more economically sound as compared to a country which is not. Big economies like the United States (US), the United Kingdom (UK), Singapore and others have a high amount of FDI recognition from different parts of the world. However, China has been experiencing the same till 2010, as a foreign investment gets triple in amount during the fiscal years 2007. Thomas Zhang, one of the retail consultants revealed that it is now become tougher to attract foreign direct investment (FDI) in the country which is not a good and wealthy sign from the viewpoint of the country. According to the article, it is found that the economy of China is now experiencing a tough time in attracting foreign investors merely because of low consumption, high corruption and the lesser amount of investment awareness in different companies. Both domestic and international investors are showing their reluctance to invest in the country. Analysis revealed that China is one of those countries of the world which experienced astounding growth in some years and then went weak again as South Korea, Japan and Taiwan.
Another concept of economics is Deflation, which is the opposite of inflation, in which the price of a commodity would decrease heavily in a given country. Most of the people think that decreasing the price of commodities is a good sign for the economy and consumers, but it is not like that. Deflation is the one due to which the economy of the country experienced a tough time in particular. The economy of the world experienced many deflations in different interval of time that are not at all effective for the sake of the economies. According to the article, it is found that the economy of China is also experiencing a situation where in the prices of commodities and daily consumption things are become cheaper and cheaper, which is not affecting the economy positively. For instance, a Knife Fish, which cost $ 220 before, is now trading on $ 13. International Monetary Fund (IMF) found that the growth rate of GDP would be around 8% to 8.5% (AREDDY and ORLIK, 3-5). It means that the economy of the country is publishing new notes every month that is not a good sign for the country. More credit slower the growth suggests that the new money is generating less economic benefits.
Conclusion
Branch of economics, associated with economics of individuals is known as Microeconomics, while the branch of economics associated with the economics of the economy as a whole is known as macroeconomics. The main perspective of this assignment is to apply the relevant concepts of economics and management on the Chinese economy. There are different concepts of economics designed in this analysis that has been associated with the growth of China.
Work Cited:
AREDDY, JAMES T. and TOM ORLIK. "Slower China Growth Signals Days of Miracles Are Waning." The Wall Street Journal, (2013): 1-3. Print.
