Also I came to know on that day, there is a foreign trade zone in Providence, RI.
Sunday, November 4, 2012
Moran Shipping Agencies Inc.
Also I came to know on that day, there is a foreign trade zone in Providence, RI.
The Impact of trade in China
China has become the world’s fastest growing major economy. It has
become the world’s second largest economy after USA by both nominal GDP and
purchasing power parity. China is also the world’s largest exporter and second
largest importer of goods.
Trading with other
country around the globe plays a vital role and the following are the effects
of trade.
Currency Valuation:
China Yuan has undervalued by anywhere from 15 to 38.5%. China has
been slowly increasing its value and they have been doing carefully because it
benefits by keeping lower. It is costing the U.S. economy from a half-million
to 2.25 million jobs. Although the Obama administration has been urging China
to let its currency rise faster, China has been slow to respond, and the
administration has avoided a full-fledged confrontation spiked with retaliatory
tariffs.
Foreign Direct Investment (FDI):
FDI is defines as a company from one country making a physical
investment into building a factory in another country. Here is China Foreign investment fell for the 10th time in 11 months, as companies reined
in spending amid a slowdown in the world’s second-biggest economy. Investment
declined 8.7 percent from a year earlier to $7.58 billion, the eighth drop in
nine months and the smallest inflow since July 2010. The decline underscores
foreign investors’ concerns that moderating expansion in China, the world’s
most populous nation, will weigh on sales and profitability.
In comparison with
last year’s data, foreign direct investment of $9.05 billion in September 2011
was the most for that month on record. The highest for a single month was $14
billion in December 2010, and investment of $116 billion in 2011 was the
biggest annual figure.Therefore, government needs to reduce the tax
burden for companies and cut the reserve ratio and interest rates to support
growth.
Migration of
labor:
China have a large number of the world’s migrants,
a new trend of immigration is emerging due to economic and demographic changes
within the country. Recently China is taking an action for its economic
development by undertaking slow population growth and low fertility. In 2010
census, the population growth has been lowed by allowing one child in per family.
In between 2005 to 2010, the growth of the working-age population (age 15 to
64) is projected to decline from 0.95 percent per annum. This decline shows
that the surplus labor in China is coming to an end. Two million job vacancies
were reported in the southeast region of China in 2004, and labor shortages
spread north in 2005. Therefore, the pressure to import cheap labor from
neighboring counties is rising and 10,000 irregular workers are smuggled each
year from Vietnam and other Southeast Asian countries.
Multinational
Companies (MNC):
The multinational companies in China plays a big
role in the creation of wealth of the country by creating employment, by
sharing technology, and also taking advantage of abundance labor. MNCs have
made significant contributions to China’s development. In 2004, 28% of China’s
industrial output and 19% of its tax revenue was accounted for by MNCs.
China plays an increasing role in calling for
free trade areas and security pacts amongst its Asia- Pacific neighbors. It has
strong political and economic links with numerous nations in the developing
world.
References:
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