Business

The Rise of Unemployment in Euro Zone and the United States

The Rise of Unemployment in Euro Zone and the United States

Introduction

The centre of economic gravity reflects the shift in the growth of China. The emerging growth of Chinese economy has been global issues across the world. China, Europe and the United States have always been the world leader. Employment opportunities and gross domestic products abbreviated as GDP are determining factors of this growth. Recently, the United States and euro zone countries have seen a notable increase in unemployment rates as compared to a much more generous increase in China. This paper will discuss the factors that lead China to the double digit growth. It will go on to discuss the future of its export oriented growth and what would be the outcome if China decides to continue to depend entirely on exports and manufacturing businesses as well as numerous other factors that might affect business as a whole.

Through this analysis, the writer will go on to build a link between the economic strength of China and other nations. An evaluative comparison is made between two factors that are influencing the increasing rate of unemployment in Europe and the United States. Recommendations are also provided for decreasing the high unemployment rates exhibited in these nations (David et. al, 2012).

Thesis Statement

“The rising economic strength of China will undoubtedly result in continued high levels of unemployment in the European Union and the United States.”

China: Emerging Economy

The growing economy of China has made it influence the U.S. economy. The current statistics of greater than 10% GDP growth since it began its economic reforms around 1978, is proof that the Chinese economy will gradually leave the rest of the world behind. Chinese economy has transformed into a mixed economy. It plays a pivotal role in resource allocation. However, the recent growth has been primarily due to heavy exports and increase in business related activities in China (Kuijs, 2012, pp. 1-2). Another factor that gave the Chinese economy a substantial boost is its entrance in the World Trade Organization in 2001- a hallmark for China, to fully project itself in to the world system.

China's trade volume from 1994 to 2008 illustrates in the figure (figure 1, Trade Surplus in China). During the first period, the export rates were rather respectable. In the second phase, export rates grew by a rate of 27%. The dependency of China has improved with the rapid raise the rates of trade. The overall export has contributed to at least six to twelve percent of GDP growth between the period of 2002 and 2008 in China.

The export led growth has created serious structural issues in China. Chinese government has been busy in their attempt to maintaining high economic growth of the country. Share of the consumption significantly declining in the last decade and the rate of consumption has dropping to less than 50% of the nation's GDP. These are two of the biggest structural issues. On the other hand, savings increased to 50% ...