China’s role in the international economy is one of the more unique cases in present day. One of the essential factors to note is Chinas system of governance which is mainly socialist in nature. China adopted the communist way of life which embraced the observation of collectivism. Collectivism involves the combination of all the economies resources so as to distribute them equally amongst the nationals. Chinas entrance into the open market was thus unexpected owing to the government’s control of a vast majority of the countries resources (Clesse, 2004).
One of the tactics that China used to venture into the international market was the use of the adaptation of the FDI policies. The use of foreign direct investments set the country apart from its competitors owing to the adaptation of the policies by hosting countries. Chinas government managed to appeal to the international market through their injection of a colossal amount of capital to the host countries. The receiving countries in turn, allowed China to enter into their market. This promoted the countries relations with their neighbors improving their strategic position in the global market (Fung & Zhang, 2006).
The implementation of the FDI policies would not be effective without the countries hard working population. The country has as a result dominated the manufacturing industry across the globe. China exports more than half of the world’s commodities making its economy record the fastest growing rate to date. This is credited to readily available human capital that is skilled in various aspects of the job market. The investment in both human and monetary capital ensures that country is able to fund projects while maintaining the highest forms of management (Fung & Zhang, 2006).
A look at the countries trading dynamics shows the economy’s ability to maintain its position in the market. China produces its goods and services at cheaper prices as opposed to their competitors. This makes them the preferred investors owing to their thriving trading environment. It is difficult to refer to China as a communist regime seeing as they dominate a large percentage of the global business transactions.
The countries entrance into the open market reduced the control from the western countries such as the United States and the United Kingdom. One of the major global partners associated with China is the United States, India and Germany and a large percentage of the developing countries. The United States economy is dependent on China for most of its products both industrial and domestic. The purchase of multiple investments in alternative countries improves the strategic position of Chinas nationals who are now key players in the global market (Clesse, 2004).
China’s fast growing rate and massive FDI investments continues to face a lot of scrutiny by financial experts. Chinas competitors accuse the country of creating an unsteady economy that will face possible recession in the future. The question on whether Chinas economy will be viable in the future continues to take centre stage. With Chinas supporters dismissing the claims as propaganda, a large number of people agree with this notion. Some of the economic statistics show that the country may not maintain their high growth rate. The living standards of the citizens do not reflect on the recorded statistics. The rate of poverty continues to rise which seeks to discredit the impressive statistics presented to observers (Fung & Zhang, 2006).
Clesse, A. (2004). The vitality of China and the Chinese. Amsterdam: Dutch Univ. Press.
Fung, H.-G., Pei, C., & Zhang, K. H. (2006). China and the challenge of economic globalization: The impact of WTO membership. Armonk, NY [u.a.: Sharpe.