A Brief History of An Emerging Giant: China

China: An Emerging Giant

First Published: February 24, 2010 ADawnJournal.com

Many people call China an emerging country that is becoming one of the most powerful on Earth, but it is very important to remember that China is not new, nor newly powerful. In fact, China is one of the oldest civilizations on Earth. For the past 6,000 years, China has been a constant power, and the only country to last this long. For more than 4,000 years, the country used a political system that was based on hereditary monarchies, but that changed in 1911 when the Republic of China was founded. This caused a great deal of problems and the country erupted into civil war. By the 1940s, the country was in shambles and taken over by the Japanese. However, in 1949 the country staged its “Glorious Revolution” and the Republic of China was pushed out of the country so that the communist party could take power. The country is now called The People’s Republic of China.

What is amazing about the country is that while it is communist, in 1978 it introduced a market-based economy and that allowed the country to become the fifth fastest growing economy on Earth and the fastest growing of the top 20 economies in the world. In addition, China exports more goods than any other country and it imports the third most goods.

For most of the 20th century, China was thought of as a place for the poor, with many poor conditions, but the country has worked very hard to reduce its poverty. While the country had a poverty rate of 53 percent in 1981, the industrialization of the country helped to build a large middle class, and the poverty level is now down to eight percent. That is a drop of over 40 percent in only 29 years.

China has also shown itself to be forward thinking in many ways. The country, widely known for its environmental problems, is now becoming a world leader in renewable energy. The country also implemented a one-child policy to stop a rapidly increasing birth rate, well before high populations around the world were even though of as a problem. While the country still has problems with freedom of the press and human rights, it is rapidly changing. It is currently the third largest economy on Earth and is a permanent member of the United Nations Security Council. The country is also a member of the G-20, the World Trade Organization, the Shanghai Cooperation Organization and one of the few countries that have nuclear weapons. While China does have the largest standing army on Earth and the second-largest defence budget after the United States, it has not shown itself as one looking for war.

Many have said that the 21st century is the century for China and they may be right. The 20th century was the American century, the 19th century was the British century, it is time for a new giant and that giant is most likely going to be the country that has existed for 6,000 years and may exist for many more to come.

India China Relations Have Come a Long Way

China and India Relations

First Published: November 26, 2009 ADawnJournal.com

As time has gone on there have also been many developments in the India China economy, some of which are worth writing home about. Even though there were always fears that China was going to overrun India, it can be reported that the best thing that happened is the growth of bilateral trade between these two neighbouring economic giants. For the last few years, it has emerged that a balance of sorts is actually developing and both trade partners are happy with the progress so far.

With all these positive developments, there are still some small quarters that have the feeling that it may be too early to completely open up the Indian Market for the giant China. It happens that inmost cases, there is a competition from the two manufacturing nations that cuts across an almost similar range of products. This quarters that are skeptical about the advantage that India will be getting when it clearly emerges that import tariffs become higher locally as compared to their competitor, which to them is a real disadvantage. There has been a growing feeling that due consideration was not taken when their government signed FTAs with China. To them more needed to have been done in order to remove the current confusion that seems to exist in the current market.

Actually, ever since the two countries established diplomatic ties in the year 1950, there has been a tremendous progressive growth that has resulted in warm relationships despite the differences in their national ideological thinking. The two neighbouring nation’s leaders must have long realized the importance of cordial relationships and for that reason their bilateral trade has continued to grow unhindered over time. Any challenges that are experienced any time are easily solved in an amicable way solutions are mutually beneficial, even when it comes to sensitive and potentially explosive issues like border disputes.

India and China have for a long time had bilateral agreements on important areas such as technology and aviation, two items which are a the bedrock of modern trade tendencies and for this reason it on known that they regularly hold consultations in order to update themselves on any progress or challenges that need to be attended to for their mutual benefit. And with the direct air links they have had for a long time now, travel and cultural exchanges are things that are a common agenda among the citizenry.

Studies seem to indicate that there may be a need to put more focus on future investments or trade in sectors that have been left behind in the past. These sectors include traditional manufacturing but most important are knowledge based sectors so that India especially can reap a big bargain in some of these areas. Even though there are many products India can export to China, currently the greatest of them is iron but a lot more can still be done with stuff like chemicals, plastic, rubber and much more. But when they are put together, China and India can build a formidable force and develop areas that have great potential such as biotechnology, education, health, and tourism and information technology.

The Sky Is the limit for India China Trade Relations

China and India Trade Relations

First Published: ADawnJournal.com December 3, 2009

In the recent past India and China have continued to show a willingness to continue enhancing their relationship, and especially when there are possibilities of signing a free trade agreement. It is not too long ago that these two Asian giants agreed amongst themselves to leave no stone unturned in resisting any powers bending their elbows to force them into a deal regarding green house gas emissions. It is an open secret that with the cooperation of India and China in many areas of common interest the whole area in general is going to reap huge benefits. However, analysts believe they need to do things faster than they are happening now for their mutual benefit.

The one issue that may need to be addressed soon by those who are involved is the large gap that exists in the China India trade. Whereas the Chinese were able to push exports to India worth $31 Billion, India on the other hand managed only a paltry $9 Billion, which is close to only one third of their counterparts’ trade volume. There many Indian business people and analysts who are a little concerned and they want the issue handled not only amicably but fast also. Because there also fears in some quarters that Chinese goods could have been dumped in India, there are measures being put in place to check just that.

It may appear as if more than half of the total Indian exports to China have basically constituted of unprocessed iron ore, may be due to the fact that China has a large manufacturing base that is hungry for iron. This ends up leaving a large gap for the Indian Business people to try and put in manufactured goods that should get a good market in China as well. Some of the areas that are being considered include IT, where India is known to have a real niche and the news is that some Indian IT companies are actually setting base in China. The Chinese continue to enjoy a wide market in India for their machinery which has enjoyed good patronage over time.

There already seems to be a good wave of cooperation between manufacturing companies in both countries who discover they can be of mutual benefit to each other. Several Indian IT and pharmaceutical companies are already enjoying the benefits of cross border trade and if truth was to be told, they are seeing a good return on their investment. Some of those that have stories to write home about include companies such as Infosys and Ranbaxy among others. However they still need to pull up their socks in order to gain all the potential benefits that await them.

On the other hand there success stories from China in India and the case of Huawei Technologies comes to mind very quickly. Their investment has brought such a boost to India communication industry, especially through their fiber optic cables investment. There are of course a few teething problems that need to be addressed sooner rather than later, if this encouraging trend is going to see the light of the day and experience some exponential growth. Both governments then need to clear the path for their thriving business communities and only time will tell how far they both will go.

Canada Seeks To Expand Trade and Economic Ties With China

Canada Is China’s New Approved Tourist Destination

First Published: ADawnJournal.com December 22, 2009

On December 3rd, Prime Minister Harper of Canada made his first trip to China since taking office. This is the first time that the two countries leaders have met in five years, making this visit significant to both countries. Prime Minister Harper is known for limiting his foreign travel for political purposes, but has recently become more active, visiting both China and India in order to increase diplomatic ties.

China and Canada have had some opposition in the past, stemming  from the Canadian act of giving the Dalai Lama citizenship in 2007, but those disputes have been put away as China has recently granted Canada an official travel destination. China has a very limited list of countries that are officially approved as travel destinations, with most of those being approved lying outside the North American continent. Canada’s unique status is the result of several decades of Chinese-Canadian cooperation. With a celebration of 40 years of diplomatic ties, both countries are happy to heal the rift. China and Canada both benefit from the ties, with economic and cultural exchanges between the two countries growing tremendously.

China has become a major partner in trade with Canada, and officials say that trade is likely to increase due to the strengthening of ties between the two leaders. Chinese tourists visit Canada regularly, and spend more in the country than in any other travel destination in the world. Chinese tourists also stay for longer periods of time in Canada than any other travel destination, making the diplomatic ties important to Canadian tourism. Canada expects to see greater economic returns from tourism, especially since China has now allowed tourism advertisements to be run in the country, persuading more Chinese tourists to visit Canada.

Cultural exchanges are also on the agenda for Chinese and Canadian leaders. China has expressed interest in a youth student exchange program that would allow young students to visit Canada to increase cultural awareness and build friendships between the countries. Currently, there are over 42,000 students who reside in Canada, attending university or studying. There are also well over 1 million Chinese-Canadian citizens in Canada, as well. The cultural exchanges between the two countries are just as important for building strong ties as the economic benefits, but there are also other common ties that have allowed China and Canada to work together.

China and Canada worked together to sign several different agreements, ranging from climate change to educational issues that will affect both countries. Canada has plan for opening up to six trade offices in China, a move that will further strengthen ties between the two. In addition to these agreements, China has purchased a majority stake in the Canadian oil fields, a project that has cost China over one billion US dollars. China’s increasing economic power has been seen worldwide, and Canada is among the top recipients of their buying power. China is Canada’s second largest trade partner economically, and with plans to increase cooperation and cultural exchange, Canada is sure to benefit in the future.

India And China Economies Continue To Grow

The Robust Economies of China and India

First Published: ADawnjournal.com January 3, 2010

With the global recession in full swing, though showing some signs of recovery, the economies of India and China continue to grow.  Some argue that, in fact, India and China, with their more robust economies, are floating the worldwide economy, boosting the global recovery almost single-handedly.  Other economists predict that China will surpass the United States as an economic superpower within the decade, and still others predict that same achievement for India.  Both China and India are, to be certain, becoming global economic ‘big players,’ albeit in very different ways, and under differing governmental structures.

Right now, most economists agree that in global economic standing, the United States is above Japan and China, respectively.  India is placing in the top twenty, at position twelve.  China, despite its growth, still has a long way to go before it may surpass the United States; 2008 GDP (gross domestic product – a figure that measures all the economic outlays of a particular organization, government, and so forth) for the United States stood at the top of the heap at 14 trillion.  How do other countries stack up, particularly China and India?

World Top Economies by GDP 2008

1.   United States $14 trillion

2.   Japan  $5 trillion

3.   China  $4.4 trillion

4.   Germany $3.6 trillion

5.   France $2.8 trillion

6.   United Kingdom $2.6 trillion

7.   Italy  $2.3 trillion

8.   Russia $1.7 trillion

9.   Spain $1.7 trillion

10.   Brazil  $1.6 trillion

11.   Canada $1.5 trillion

12.   India  $1.2 trillion

NB – Figures are rounded. Source: CIA World factbook.

The point in the prediction of the growing might of the economies of China and India is not their current standing as much as that the global GDP has slowed in recent years (thus the term, worldwide recession) whereas the economies of China and India have grown, despite the realities of the worldwide economy. 

One indicator that most of us can understand is automobile sales.  Long a “canary in the coalmine” type of economic barometer; when consumers perceive the economy as ‘strong,’ they purchase big ticket items, such as cars (which, outside of a home, are usually the largest single expense that an individual undergoes).  As one of the richest nations on earth, the United States has long led this economic indicator, but next year it is predicted that China will surpass the United States by being the car-buying powerhouse of the world.  With its growth rate at an average of between 7 and 8% (depending on the report that you read), compared to the United States’ predicted growth rate of just over 1%, it should come as no surprise that China may exceed the United States within our lifetimes.

India, as well, shows a high growth rate for the upcoming years.  Currently far below China, and even further below the United States, but with one of the highest populations in the world, India’s GDP is still impressive considering the abject poverty and low (in comparison) wages.  Primarily a service based economy (almost 60% of India’s economy is service-based), India’s economy shows great potential for growth with its massive population, and extremely high knowledge base.  Most economists predict that by 2020, India will be among the top economies of the world. 

China and India are certainly worth watching as the economic world continues to diversify and becomes more complex.