China’s Economic Prosperity - Economics Essay (200 Level Course)


China’s Economic Prosperity - Economics Essay (200 Level Course)

The article talks about china’s economic prosperity in terms of attracting manufacturing jobs and cheap labor. The claim that china is keeping its currency undervalued to attract foreign investment and to make investment costs down might be true. Since the 1990’s began, china has been able to attract more and more manufacturing jobs from the us especially consumer goods manufacturing (textiles, toys etc).

With its undervalued currency, china is able to attract major manufacturing companies from the USA to trade in Textiles, Consumer Goods and other light goods.

The undervaluation of china’s currency makes it easier for foreign investors to buy and setup manufacturing activities at a much lower cost compared to any western country. This has resulted in major job losses in the manufacturing sector especially in the us. Another issue is the trade deficit that the USA and china have. China is currently exporting more goods and services to the USA ($125 Billion) compared to $25 Billion being exported to china from the USA.

The WTO should definitely step in order to make china trade practices more in line with the rest of the WTO member counties.

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