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Examine The Negative Effects Of Rapid Growth Of China

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Additionally, there are several other negative effects that are created by rapid increases in GDP. For example, China's GDP grew at annualised rate of 7.0% in the first quarter of 2015 which is the slowest pace of growth since 1990. However, the Chinese economy is still one of the fastest growing economies in the world despite being the second largest. However, China’s growth has been so large and so fast that it has led to resource depletion and many other environmental issues such as the contamination of soil and water, which may take years to stabilise. Moreover, surrounding many Chinese cities there are areas of “smog” which is similar to that in the industrial revolution in Britain in the late 18th and early 19th centuries. Therefore, it can be argued that for many people in China there standard of living has actually worsened despite very large increases in the GDP per capita. One of the reasons for this may also be the fact that there is high-income inequality in China. For example, a survey in Peking University found that the top 5% of households earned 23% of the total household income. Consequently, if a nation does …show more content…

This inflationary pressure becomes even worse when the economy is operating near its maximum capacity. As well as this being very harmful for savers and the economy as whole, it also highlights a particular problem of GDP. This is due to the fact that if there is high inflation then GDP will increase at a much higher rate. This is due to the fact that the GDP is a measurement of the total value of goods and services produced within a country. If there is significant rises in inflation then the price of the product will increase significantly. This reduces the purchasing power of households and it will also lead to a deterioration of the current account on the balance of

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