GL OBAL CENTRE STA GE
China is experiencing
an economic growth
slowdown; it may have a
serious effect on the U.S.
and the global economy.
of traditional industries. As mass
entrepreneurship and innovation came
into the limelight, new market entities
have been nurtured
Obviously, China is progressing
a new model of global economic
cooperation. It has a broad vision
for international economic cooperation and interaction.
It is actively working with the UN, G20, BRICS and
other multilateral cooperative mechanisms by playing a
constructive role in addressing the common challenges facing
the world. China is expected to account for more than 70
percent of the total growth of the so-called BRICS grouping
of large developing economies. What China is looking for is to
coordinate eff orts to make the emerging international system
more balanced, equitable and sustainable. It is no surprise that
China champions globalization. For China, export markets
have spurred a growth rate suffi cient to move millions of
people out of poverty into the middle class and affl uence.
Impact on the US economy
The United States has been the world’s biggest economy
since long, but that top ranking has been under threat
from China. The diff erent phases of economic cycles toss
economies around the world. However, these top economies
don’t budge easily from the positions they hold. China, with
its giant economy, has a huge infl uence on world economies,
particularly those related to China. A decrease in domestic
demand in China will most likely adversely impact the
world economy and slow down global economic growth.
The United States is one of the countries that is likely to be
aff ected by a slowdown in the Chinese economy because of
the expected decrease in the export of goods and services to
China. Since recently the Asian giant. China is experiencing
an economic growth slowdown; it may have a serious eff ect
on the U.S. and the global economy. Concerns are being
raised that there is a wide possibility that the slowdown in
the economy of China will have negative impacts on the
markets that are closely related to its economy, one of them
being the United States.
There is a ‘Trade War’ between the US and China. The
US has raised tariff s on certain imports. China has retaliated.
a) The US imposed tariff s on Chinese imports to reduce this
massive defi cit with China. b) The US also wanted to protect
its domestic producers from competition from cheap Chinese
products. c) It also wanted to protect jobs in the US. The
point is to target China by making Chinese products more
expensive for American consumers and businesses to buy.
If Chinese products suddenly become
more expensive, Americans will buy
those same products from somewhere
else, and Chinese businesses will
ultimately suff er.
China immediately accused the US
of starting “the largest trade war in
economic history to date” and retaliated by imposing tariff s on
the US goods. This is only the beginning as more tariff s may
come. Free trade indeed is benefi cial to all. China’s ambition
to sustain an open-trade system is out of self-interest. Since
China incrementally integrated itself with the world economy
in the post-1978 era, it has reaped huge economic benefi ts.
Prolonged trade war will certainly lead to slower global
growth. The expansion of China’s economy brings it to about
two-thirds the size of the US as of today, and at the current
rate could overtake it within the next decade. However, it is
the trade war with China, currently in a state of confused and
uneasy truce, that represents the clearest and most immediate
danger to what’s left of global prosperity. Time will tell what
will be the impact of the trade war between the US and China.
Conclusion
China today is a global player both as the largest
manufacturing economy and the largest export economy in the
world. The simple fact that many of the products people use
in their daily lives the world over are made in China, shows
the importance of the Chinese economy. Any developments
in China, be they negative or positive, infl uence the world’s
largest economy and the world economy overall. China
off ers a Chinese approach to problems facing humankind
and is playing an even greater role in global governance
by putting forward such concepts as a community with a
shared future for humankind, promoting democratization
of the global governance system, and endeavours to give
more say to developing countries. China has shown a great
development potential from its remarkable economic growth
rate these years.
There is a long way to go, but China aspires to play a crucial
role in global recovery and sustained prosperity. What are
China’s global economic intentions? Will China be the world’s
globalization champion? The answer is “perhaps”, the world
needs China a global player today. No one can be blamed for
wanting to believe that China is leading the world economy
into the future when it seems that no one else can or will.
* Author is a former professor, University of Delhi, India
and Royal University of Bhutan
Extraordinary and Plenipotentiary Diplomatist • Vol 7 • Issue 4 • April-May 2019, Noida • 43