The demand for oil in China has grown to unprecedented levels. It is one of the leading countries in oil demand growth. China’s dependency on oil has surpassed the USA in terms of imported oil in from the Middle East. The increase in oil demand in China is the result of many economic variables, including a booming economy. The implication of such a booming economy has resulted in political shifts on a global scale for China.
China also manufactures for business from other countries. Raw materials are shipped to China and then assembled in factories before shipping it back to the countries. Globalization has helped China’s economy a lot because without globalization, China wouldn’t have made money from all the manufacturing. (www.useconomy.about.com) Socially Globalization has greatly impacted China’s social connection to other countries around the world. This happens because globalization allowed exports and imports to run more freely.
FDI inflows continued to increase but there was a small decline following the Asian financial crisis it was back on the increasing radar in 2000 due to China’s WTO accession in part. During the reform period, GDP rose by a whopping 5% and by the 1990s, China had positioned itself as the second largest FDI recipient after the USA. Moreover, among the developing countries, China ranks first as a major FDI recipient and it was responsible for between 25% and 30% of FDI flows to the developing
After the Open door policy, China start attracting foreign investment and global company into the country and cheaper labour force become national advantage for developed countries that willing to put manufacture outsourcing process in China. The demand of markets boosting in the stage of economic development, and there are large amount of potential opportunities occur in the market place. With increasing of FDI, China also learn knowledge and skill in innovative technologies and helping local business development. In the result, the GDP is rapidly growing since 1995 (World Bank Data 2017), which also means consumer purchase power is also sharply increase in internal market. Also in 2001, China was formed into BRIC with other three countries as one of powerful emerging market country in the
Another factor which gives rise to inflation is the steady increase in global commodity prices such as oil and wheat. Since these two commodities are raw materials used for producing other goods and services such as flour, biscuits and cooking oil, this will definitely mean an increase in the cost of producing these goods for firms who are engaged in its production. Since firm’s objective is to maximize profits and minimize costs, they will achieve this by reflecting the increase in the price of those imported raw materials in the selling price of its final goods and services such as biscuits and
Duty exemptions liberalized imports for the production of goods, quotas on the export of textiles and clothing was removed and the expansion of labour-intensive industries provided increased wages for locals. (Ianchovichina and Martin 2001) "Foreign trade plays a more prominent role in the Chinese economy than in most other large economies: its exports-to-GDP ratio is about 37 percent" (Wu 2009 p40). As the demand for goods increases among trading regions a lot of focus revolves around China as a low-cost assembler, this involves the receipt of components from the US or Europe. In order to facilitate this growth China has expanded and improved their railway lines to operate at maximum speeds, roads and
This would allow china to use their resources produce products or service. Comparative advantage means a country should produce of manufacture what it can do most efficient. Comparative advantage that has helped China to become the world’s largest trader. China are able to produce goods for less than 50% to 70% cheaper than other countries. According to the International business times in 2011, China had produced 90.6% of all computers in 2011 and 70.6% of all cell phones.
It has proved extremely beneficial for the Chinese market and helped the growth of the market. The whole world is shocked with the rapid growth of china globally as it has played a vital role in this arena. According to Dauderstadt M， (2005), had confirmed that China had become a power house. Prior to this, China was against globalisation and in the past refused to communicate or cooperate with global companies due to government orders. Globalisation has certainly had a positive impact on the Chinese economy and today the Chinese live a very different life to the past.
China, the world’s largest importer of mostly iron ore and coal can solely change the global economy, depending on their demand. The reason for such a high demand for those commodities is the country’s interest in investing in infrastructure () as well as the production of steel for shipyard use. This shows an important aspect in the co dependence of the dry bulk trade and the international trade and the supply/demand motif of the
The domestic goods prices remain the same as the country can attain increasing foreign exchange reserves without affecting the domestic value of their currency. 3. There is growth in the economy due to increased money supply in the economy which will lead to an increase in the aggregate consumption, demand, and savings. With the onset of increase in all of the above the economy is bound to grow. 4.