China's exports and imports dip raising growth concerns
Identify and analyze FOUR (4) factors that are causing a slowdown in the economy of China.
Eurozone debt crisis is caused by major European countries borrowing and spending more than they could afford, as a result other European countries will need to bail them out of the tune of billions of euro to prevent the crisis from worsening or spreading. Eurozone debt crisis has slowed down china’s economy by; as countries in Europe were experiencing economic slowdown due to the crisis, so were the people inside the country in terms of their citizen’s spending or purchasing power which has reduced their import on Chinese goods and services. In addition, as china goods and services are consumed mainly by the people outside their own country (they are relying on the China’s export) , when the spending power of Europeans decreases, so was the demand for Chinese goods which has shifted the Aggregate Demand curve to the left. This has shown an adverse impacts China’s economy as workers are mostly laid off due to the excess capacity that many manufacturing plant have experienced, causing loss of job opportunities which in turn has affected China GDP in a negative way which in turn resulting in the slowdown of China’s economy.
On the other hand, situations that caused the import of china fell are Euro zone debt crisis, other countries’ political issues and US unemployment rate. These situation led china have not enough raw materials from abroad to produce goods and services efficiently. Hence, shortage arises. The firms in China are forced to increase the price of goods and services in order to push down the aggregate demand.
Besides, China maintains low currency in order to attract foreign consumer, and this induces a large demand of good. This action has worsened the shortage of the raw material. Therefore, the firms reduce the quantity of output to decrease GDP and it slowdown the economy of China. Furthermore, pessimism which expects future economy goes down will
Eurozone debt crisis is caused by major European countries borrowing and spending more than they could afford, as a result other European countries will need to bail them out of the tune of billions of euro to prevent the crisis from worsening or spreading. Eurozone debt crisis has slowed down china’s economy by; as countries in Europe were experiencing economic slowdown due to the crisis, so were the people inside the country in terms of their citizen’s spending or purchasing power which has reduced their import on Chinese goods and services. In addition, as china goods and services are consumed mainly by the people outside their own country (they are relying on the China’s export) , when the spending power of Europeans decreases, so was the demand for Chinese goods which has shifted the Aggregate Demand curve to the left. This has shown an adverse impacts China’s economy as workers are mostly laid off due to the excess capacity that many manufacturing plant have experienced, causing loss of job opportunities which in turn has affected China GDP in a negative way which in turn resulting in the slowdown of China’s economy.
On the other hand, situations that caused the import of china fell are Euro zone debt crisis, other countries’ political issues and US unemployment rate. These situation led china have not enough raw materials from abroad to produce goods and services efficiently. Hence, shortage arises. The firms in China are forced to increase the price of goods and services in order to push down the aggregate demand.
Besides, China maintains low currency in order to attract foreign consumer, and this induces a large demand of good. This action has worsened the shortage of the raw material. Therefore, the firms reduce the quantity of output to decrease GDP and it slowdown the economy of China. Furthermore, pessimism which expects future economy goes down will