2/16/2005

China's "Great Leap Forward"

China has really blossomed economically in the past decade and are continuing to up the ante for every other competing economy in the world. This article from Slate, http://www.slate.com/id/2113345/, crunches some interesting numbers on how China is growing, such as receiving more foreign investment capital ($53 Billion) than any other country. Also, discussed is China's manufacturing strategy of being able to undercut competitors labor costs significantly, which has given many companies' no choice, but to send their manufacturing to China. It is expected that these costs will continue to stay low with so many unemployed farmers and state workers sitting on the backburner.

4 comments:

Dale said...

China definitely has a comparative advantage over many nations. The Chinese are so smart that they have a big impact on the world economy. Businessmen study their strengths and weaknesses and try to apply them to their own firms. There is a lot that can be learned from the examples of the Chinese.

salty said...

China plans for the long-term. China's cars used to not dominate the U.S market, but now they do. That is why they have a competitive advantage today, because they plan for the long run.

Emily said...

China has the comparative advantage over the competition because they are a strong capitalistic society in the since Chinas government has few regulations making it so their people can fulfill the demand for all around the world. People in China are free to do what is wanted without having to follow a lot of laws to make a living which goes to show that at times less regulation makes the economy better off as the book Fair Play points out.

Dr. Tufte said...

-1 on Jacques' post for a poorly formatted link.

It will be interesting to see if China can sustain this growth in the future. The theory says that they can't.

Keep in mind though that since China has more population than the U.S., they can overtake us as the largest economy in the world even if they can't sustain their growth rates.

However, if that is the case, then China isn't our worry, India is. When you are old, the U.S., India, and China will be the big players on the world stage (provided that those two can keep from fracturing along ethnic lines).