The
prospect of an economic crisis in the US has drawn attention to their impact on
the rest of the world. As the world's largest national economy, the United
States are often called "locomotive of the world economy", but no one
doubts that this engine to maintain his pace in recent years has been more and
more dependence to China (Boccuti & Moon, 2003). For years, the
globalization protagon
...[Show More]
The
prospect of an economic crisis in the US has drawn attention to their impact on
the rest of the world. As the world's largest national economy, the United
States are often called "locomotive of the world economy", but no one
doubts that this engine to maintain his pace in recent years has been more and
more dependence to China (Boccuti & Moon, 2003). For years, the
globalization protagonists have made to the increasing dependence of the
Chinese and US economies from each other - as evidence of mutual gains, for
performance and dynamics of capitalism. This was taken as proof that global
capitalism could spread social and economic favors in the south and east. Quick
and cheap labor within China provided the United States with cheap consumer
goods. Together with Chinese purchases of US government bonds was the case a
powerful deflationary pressure which kept interest rates low in the United
States. Cheap loans stimulated spending, which kept the US economy growing.
Internationally, the production of China's industrial boom led to a thriving
demand for energy, raw materials, and food. Thus, China transformed into an
icon of the energy of capitalism and its expansion capabilities.
Even
if we allow for the moment the bourgeois ideological aspects of this plan left
out, yet the entire economic analysis is inherently problematic. As description
of the resilience of the industrial cycle, which began in China turn of the
century and in the US in 2001, it is true (Keyuan, 2000). However, a mistake was its belief
that such development could spiral infinitely stability and momentum preserve -
or at least, as long as China's villages are a reservoir of cheap labor.
Now
the credit crunch has brought the US growth rates for holding. Attention is on
whether China is an economy that is large enough to entrain the rest of the
world even without permanently increasing exports to the United States (Keyuan, 2000).
The concept thought possible, argues that China has "decoupled" from
the US and could move above storm based on its internal development.
[Show Less]