CURRENT MACROECONOMIC SITUATION OF CHINA

Current Macroeconomic Situation of China



Current Macroeconomic Situation of China

Introduction

This study intends to expound the current macroeconomic situations of China in the light of numerous macroeconomic variables such as gross domestic product, inflation, prices, interest rates, exchange rates, and level of employment within the country since the last two to three years. China comes under the fastest growing economies throughout the world. The gross domestic product of China has maintained a steady annual growth at an average rate near to ten percent since now. It has also been speculated that in the near future China can even become the world's largest economy due to its rapid growth in every of its sector which consequently causes to prosper the entire economy (Morrison, 2008). The global emergence of China has opened up a lot of opportunities to strengthen its economy through the power of trade in the entire world. This has made it a significant trading partner for many nations which causes to continually playing a vital role in the boom of Chinese economy. Moreover, since the opening of foreign trade as well as the increasing investment opportunities have significantly elevated the real annual gross domestic product (GDP) to approximately ten percent through 2012.

China is currently the second largest economy of the world. However, according to the recent statistics, the China is the largest merchandise exporter around the world as well as the second largest importer of merchandise. It is also considered as the largest manufacturer, largest foreign exchange reserve holder and the largest creditor nation. Furthermore, it comes under the second largest destination for the foreign direct investment (Morrison, 2013). In short, the meteoric growth of China has been observed since the 1980s and has always been heralded as the economic miracle as even besides the numerous shortcomings came across the economy of the China but still it managed to get the impetus and increasing growth.

Discussion

China has established its economy with the rapid speed even according to some economic forecasters that China will soon overtake the United States and will likely to become the world's largest economy within just a few years to come. The Chinese government has been putting a great deal of efforts in maintaining a rapid growth of its economy in the long run and for this purpose, government has been establishing comprehensive economic reforms with the intention to quickly hasten the transition of China into the free market economy. The prime considerations of the government are to rebalance the economy through the consumer demand rather than depending up on the exports and investments. They are also looking forward to bring in more innovations and boosting up the productivity. However, China is still encountering with numerous other severe challenges which can even come in between its future economic boom and which include the increasing income disparities, widespread issue of the pollution, and the undeveloped social safety net. As a matter of fact, the government has also outlined the goals to meet with ...