The Role Of The Chinese Government In The Economy

The Chinese Government and The Chinese Economy

First Published Date : November 4, 2010 ADawnJournal.com

The Chinese economy has grown immensely in the past few years, and a big part of that is because of the government and the changes it has made in the economic structure of the country.

In 1949, the country became a socialist country, which means that the government has been responsible for planning and managing the national economy. In the 1950s, the government monopolized foreign trade and became the owner of all the domestic enterprises. The government set the price for all commodities and controlled distribution of investment funds, output targets and more. This caused the economy of China to be stagnant and slow and it was not until 1978 when economic reforms were put in place.

Since then, the government’s role in the economy has fallen greatly, while the role of private enterprise has grown. That being said, the government still maintains an active role in the urban economy and has policies in place with agriculture procurement. The government’s management of the economy is involved through a top-down chain of command with hundreds of ministries, commissions, administrations, bureaus, academies and corporations.

Economic policies established by the National People’s Congress and the State Council and moved on to the economic organizations that work under the State Council. The State Council then implements the plans into various sectors of the economy. Direct control of the economy by the government is done through designating physical output quotas and supply allocations, while indirect control is done through affecting market incentives.

Over the past 30 years, companies within China have begun to gain more and more independence from the government in a range of activities. Large-scale construction, as well as important industries and services are still managed heavily by the government through direct management, but the rest of the economy has gained a great deal of independence. That being said, one-third of the GDP of the country is still generated through government-controlled industries.

The government these days does not heavily control consumer spending and the market forces of income levels and the cost of goods and services determine spending. Before 1978, goods and services were rationed when they were in short supply, meaning the government had more control over what people bought.

The Ministry of Commerce, customs and the Bank of China and the Chinese banking system’s foreign exchange division, which controls access to foreign currency that is required to do imports, currently manage foreign trade. Although even the restrictions on foreign trade are beginning to fall greatly as government restrictions lessen.

China has the fastest growing economy on the planet and it is expected to be the strongest and largest economy in the world by the mid-part of the 21st century. It is a growing force and it all began in 1978 when the government made the decision to lessen the restrictions in place and bring in more free enterprise into a socialist country, a model many other countries are now looking at.

How To Lower Your Credit Card Interest Rate

Lower Credit Card Rates

First Published Date : November 6, 2010 ADawnJournal.com

If you are dealing with debt and you want to try and get your head above water, then one of the best things you can do is to look at lowering your interest rates. Since credit card debt is one of the most common forms of debt, you should look at lowering your interest rate with this. It is quite easy to do, and all you have to do is follow the instructions in this article to lower your credit card interest rate.

Many people do not realize that you can lower your credit card interest rate through something as easy as a phone call. Remember, if you default on your credit card, it costs the credit card company money. The credit card company does not want that, so they will work with you to help you pay off your credit card. Therefore, all you need to do is call the credit card company and call them, asking that they convert your credit card to one with a lower interest rate. One good thing to do is to show them that you have always paid your credit card, and been a credit card customer for a long period of time. This will help them lower the credit card interest rate in your favour.

If they do not, then you can search for a credit card company that provides a better interest rate on their cards. Look for cards through local banks and contact them to get a credit card. Once you have contacted them, you will get a credit card application. Then, fill it out, send it off and when you get your new credit card, you just need to transfer the balance of your current credit card to the new credit card.

It is important to point out that when you do get a credit card and do a transfer, you will be subjected to a transfer fee, but usually it is just a percentage of what you are sending over to the new credit card.

If you think that credit card interest rates are not that big of a deal, then look at it this way. If you have a credit card with $10,000 on it, and your interest rate is 19 per cent, then you will end up paying $1,900 in interest per year. However, if you are able to lower your interest rate down to nine percent, you save $1,000 per year in interest. That little bit of a decline will save you a lot of money and that will help you get out of debt much sooner. Sometimes it is as simple as just asking for a new interest rate, but if that doesn’t work, then you have to do a bit more work and yes, get a new credit card. Although when you get your new credit card and transfer the balance, you can then cancel the old credit card, thereby eliminating that bad interest rate forever.

What is Globalization?

A Brief History of Globalization

First Published Date : June 29, 2010 ADawnJournal.com

A concept that is becoming more and more important in the 21st century is globalization. Globalization is something that has been going on for thousands of years, but it is only now we are truly seeing the effects of a global society, rather than one based on separate countries competing for resources. Globalization is the process where economies, societies and various cultures are connected through various networks that include trade, communication and transportation across the planet. Economic globalization follows along these same lines, in which economies become connected through investment, migration, trade and flows of capital.

Globalization History

Globalization as we know it goes back to around the Hellenistic Age, when urban centers were the center of Greek culture and held sway from Spain to India with its culture. As time went on, various other empires helped push globalization closer and closer to a reality. The Roman Empire, Han Dynasty and Parthian Empire are all given as examples of empires that were globalized based on the world that that time. A good example of this is the fact that 300 Greek ships a year sailed between Rome and India, sending 300,000 tons of goods.

When Islam came into being, globalization took another step forward as Jewish and Muslim traders created sustained economies that spread across Europe, Africa and the Middle East. Ideas, technology and food all began to be traded and spread over vast distances. The Mongol Empire continued this when they had an empire that stretched from Korea to Europe, helping to spread technologies across Europe and Asia. Thanks to the Mongol Empire, trade along the Silk Road greatly increased, leading to Marco Polo to make his famous journey to China.

Once the Age of Discovery began, globalization moved into the New World as European powers like Portugal, Spain, France and England began to take advantage of the glut of resources North and South America provided. When the Industrial Revolution began in the 18th and 19th centuries, globalization took another step forward, leading to the world as we know it. Vast trade in resources helped connect countries and cultures across the planet.

Following the Second World War, politicians began to break down borders that hampered trade so that interdependence and prosperity could increase and therefore prevent a future global war. Organizations like The World Bank and the International Monetary Fund, along with free trade, helped to spread wealth and capital across the world. Some of the ways that economists have achieved this global trade concept through globalization include:

·   The creation of free trade areas and the elimination of tariffs.

·   The reduction of transportation costs.

·   The elimination of capital controls.

·   Creating subsidies for global corporations.

Globalization Effects

Globalization has had many different effects across the planet. These are both good and bad. A good example of the bad effects includes sweatshops and the loss of jobs as companies go to cheap countries where labour laws are relaxed. However, in terms of good effects, we have the following:

·   Foreign products have spread across the planet with the movement of goods through international trade. Since 1955, international trade of goods has increased 100 times from $95 billion to $12 trillion. A good example of this is the fact that China’s trade with Africa rose by seven-fold between 2000 and 2007.

·   Roughly $1.5 trillion is traded in national currencies on a daily basis thanks to globalization and the emergence of worldwide financial markets.

·   Thanks to globalization, the United States has enjoyed great power since the 20th century because of its massive amount of trade. China is now catching up on the United States and will soon become the leading world power.

·   Information is traded through globalization thanks the Internet, television and other mediums like telephone and radio.

·   Globalization has helped to harmonize languages. The most widely spoken language on Earth is Mandarin with 845 million speakers, while Spanish and English come in second and third with 329 million and 328 million speakers. Roughly 35 percent of all mail is in English, while 50 percent of the internet traffic is in English and 40 percent of radio programs are in English.

·   Globalization has led to greater travel and tourism, with as many as 500000 people on planes at any one time and 922 million international tourists moving about each year. Immigration has also increased and multiculturalism has become extremely common throughout the world.

Globalization is happening all around us and many do not even realize that they are experiencing it every day. A good example of this follows:

A man wakes up in the morning and dresses in clothes that were made in Southeast Asia and China. He gets coffee from his kitchen, with the coffee coming from Africa and the coffee cup coming from Europe. He has a breakfast made up of fruit from South America and milk from Canada. He gets in his car, which was made in Japan, and fills it up with gas that was originally oil extracted from the Middle East. As he gets to his office and uses furniture made in Sweden and electronics made in Asia, he surfs the net, hitting websites located in 15 different countries.

This is just a brief example of how one person, in the first few hours of a day, can be using items that come from all over the world. While globalization has received a lot of bad press, the good it has done is unmistakable. It has spread prosperity across the planet and helped get people out of poverty. Less than 12 percent of the world lives in extreme poverty now, down from over 40 percent 30 years ago. In addition, more people have food, more people are making money and more people can live the lives that they want. There are downsides, including the effect on the environment due to global trade, but overall globalization is leading to a better world and we should be happy we live in a world where the world is interconnected.

What is a Mortgage Default?

Defaulting on a Mortgage

First Published Date : June 25, 2010 ADawnJournal.com

There are few phrases or words more chilling for the holder of a mortgage than “default notice”. While the appearance of those words at the top of a letter are never what anyone wants to see, they hold a special dread and fear for the mortgage holder because of the genuine fear that the bank’s next step will be to take possession of their house. This fear comes about – with good reason – because the money lent in a mortgage is considered a “secured loan” – that is to say that it is given strictly on the basis that collateral is provided. “Collateral”, for the purposes of a loan, essentially means security. If you don’t pay the loan, then the bank have something of equal value that they can reclaim from you.

It is never desirable to default on a mortgage. The payments can be difficult to keep up, that much is undeniable. A mortgage is, in a lot of ways, the most challenging kind of borrowing that an account holder can take out. Although the longer term of the borrowing and the frequently lower interest rates (available because the loan is secured) lowers monthly payments, the fact that they are stretched out over a long term can mean that there is some doubt in the mind of the borrower over whether the conditions will always exist that make it possible to meet monthly payments. Therefore, especially in the early to middle period of the term of the loan, there will be some recurrent dread of one day defaulting on the mortgage. It is for this reason also that many people who are in a position to do so pay off their mortgage early.

If you default on your mortgage it does not mean that the house you have secured it on will be repossessed. In actual fact, banks tend to prefer not to go that far. It is up to you as a borrower to keep in contact with the bank and stay true to your intention of paying monthly payments at a sustainable rate. If you have already made a substantial dent in the principal of your mortgage, the bank may well be willing to restructure a loan for the remainder, over a longer term so as to allow smaller, affordable monthly payments. How long the term will be depends on factors such as your continuing earning potential and how much is left to pay off. Although you may not be able to stick to the original term, a difference of a few years may be all it takes to make that monthly payment manageable.

Aside from this method, you may have the opportunity to remortgage with a different lender – paying off your old mortgage with a loan that covers the remaining principal and interest, although the earlier you decide on this the better – missed payments and particularly expired default notices will put black marks on your credit file, making it harder to get a decent remortgaging deal, if you can get one at all.

Some Facts About China’s Economy

China Economy Facts

First Published Date: July 3, 2010 ADawnJournal.com

China is one of the most fascinating countries on Earth. It has existed in one form or another for 5,000 years, has influenced the world immensely and even today it is a dominating country on Earth. While in the 20thcentury China was a developing nation, these days it is not only developed, but it may be the superpower of the 21st century.

At this moment, China’s economy is the third largest in the world, just behind the United States and Japan. With a GDP of $4.91 trillion, it is fast becoming the biggest economy on the planet and it has the second highest net-worth behind the United States with $8.77 trillion. In addition, China has the fastest growing major economy on the planet, with a 10 percent growth rate over the past 30 years on average per year. China may be a huge economy, but it’s per capita income is only $3,677, which puts it 97th in the world. That will change as time goes on though because China is the second-largest trading nation in the world, and the largest exporter, while also being the second largest importer.

The growth of China’s economy has also helped its citizens come out of poverty. The level of poverty in China fell from 53 percent in 1981, to 2.5 percent in 2005. That being said, 10 percent of the population, or over 100 million people, still live in extreme poverty. The infant mortality rate has also fallen as China has grown in economic power, falling roughly 39 percent between 1990 and 2005. Maternal mortality also fell by 41 percent in that same period, while the access to telephones increased by 94-fold to 57.1 percent of the population having telephones.

China has a lot of trade going through its borders, and its currency is highly traded on the world’s markets. Currently, foreign exchange reserves have risen dramatically. In 1999, foreign exchange reserves in China stood at $155 billion, and by 2000 that had gone up to $10 billion. In 2005 it had risen to $800 billion. By the end of 2006, that had gone up to $1 trillion, and by 2008 it was nearly $2 trillion. In 2008 as well, China replaced Japan as the largest foreign holder of U.S. treasury securities with $585 billion. This was the first time that had ever happened.

The two biggest sectors of the Chinese economy are agriculture and industry, both of which employ roughly a total of 70 percent of the labour force and account for roughly 60 percent of the GDP production in the country.

For many, the sudden emergence of China took them by surprise. The country has risen fast and very strongly in the past few years, becoming a country that is going to be very powerful in the 21st century. As time goes on, more and more people will be looking at China, rather than the United States, as the main driver of the entire world’s economy.