China is all set to become the world's third largest trader behind the US and Germany. Modern industrialization and globalization, recovering world economy along with cheap labor costs are the factors that can fetch Chinese economy the status of the world leader. India, the world's second largest populated country is still far away from china in economic development. This article talks about the symptoms of an overheating economy in china and its implications for India.
China, today has come to be counted as one of the leading economies of the world. This is an outcome of a successful transition from an ordinary "center-planned economy" to a market driven-economy. Its growth is attributed to its reformation policy, which has transformed it into a trillion dollar economy, since its inception in 1979. Moreover, China has achieved the largest exporter and importer status in a short period of 10 years, and the success story continues.
It is expected that China's foreign trade will set a new record business worth $1.1 tn boosted by a 30% growth rate, which will move its ranking up in the global economy to the third position behind the US and Germany. The Ministry of Commerce has disclosed that exports for last year have grown by 35.4%, resulting in a business equivalent of $593.4 bn. Imports too have grown by 36% on yearly basis amounting to $561.34 bn. Last year it achieved a yearly surplus of $32 bn, which is more than 5% of that of the US. However, due to high imports during the first part of the year, China faced trade deficit for a short while, which started from January and prevailed till August. Economists point out that liberalization and the sudden spurt of economic growth are the reasons behind the rapid and solid growth of foreign trade. But, the question is whether China will be able to stabilize and retain this growth status. |
