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- As the Chinese save money in their bank deposits, the government of China siphons off the money to lend to the U.S., which then lowers the cost of money in the country. By doing this, the people of China are ultimately giving financial support to the voracious spending habits of the Americans.
- First, when the local Chinese officials contend for development funds, they tend to fail to give their actual growth rates to the country’s central planners. Secondly, the government only accounts for the country’s legal economy while ignoring its underground economy.
“How China Will Change Your Business” is an article written by Ted C. Fishman that illustrates the rise of China’s economy and its influence on the world. China manufactures many products that are found almost everywhere in the world. Some of the products it makes are digital products, clothes, shoes, toys, electronic goods, cars, biotech, and computer parts. The U.S. is buying an increased number of Chinese goods, which has resulted in a large inequality of trade between the two nations.
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The article gives fourteen truths that every person engaged in running a business ought to know about the country’s capitalist economic explosion.
- China’s economy is much larger than the official numbers show because the local Chinese authorities usually underreport their growth rate, the government measures only China’s legal economy and it artificially depresses the value of its currency against the dollar.
- The rapid growth of the Chinese economy lacks an equivalent in modern history. China has witnessed an annual GDP growth rate of 9.5%, which has made it to increase its economic strength.
- The country is winning the international battle for investment capital to its favor. Foreigners are increasingly investing their capital and expertise in the country that has facilitated its economic growth.
- China can intimidate its competitors. China can spend, control wages, and even throw competitors from the market.
- The Chinese are entrepreneurs. The Chinese take every opportunity on their way to use in making money.
- China is not only engaged in making cheap consumer goods but also it is engaged in commercial technology products.
- The country is quickly closing the research and development gap by improving its resource allocation in carrying out innovation.
- The country currently sets the international standard for prices. The low-cost products from China have forced the price of competitor products from other countries to drop.
- The global increase in the cost of raw materials can be attributed to China’s quick economic growth. The country’s industries consume a significant portion of the world’s raw materials.
- Wal-Mart is the only company that has clinched on the country’s potential since it has capitalized on the low production cost in China to make goods for the international market.
- Foreign investors have always complained of hidden costs related to running a business in China. They are pressurized to relocate their technology and generate their local competition.
- Piracy is a problem in the country due to its loose intellectual property rules.
- The United States debt is purchased by China. This has decreased the cost of money in America since as an alternative to selling its dollars, the Chinese are loaning them back to the Americans.
- The U.S. and China have become dependent on the majority of their contentious routines. The two countries have learned to relate mutually in the economic world.