Global Economic Slowdown

CORINNE TOH LIN NENG (0315237)

Reflective Journal 1

Global Economic Slowdown

An economic slowdown arises when the rate of economic growth slows in an economy. Countries normally measure the economic growth in terms of gross domestic product (GDP) which is the total value of goods and services produced in an economy during a specific period of time (Cooper and Barro, 1997).

According to The Economic Times (2016), China’s economy is slowing down more than the official statistics of the world’s second largest economy is the greatest threat to global economy. The slowdown of China’s economy could pose serious challenges to the growth of the global economy. China after showing signs of slowness, India has now replaced China as the fastest growing major economy of the world. One of the reason that China’s economy is slowing down because China’s economy has long been built on its manufacturing sector (World Finance, 2016). China has huge and growing population that allows the workers to work in factory easily but it is tough when the government imposed one-child policy that slows growth, ages the population and creates a generation unwilling to accept the low-paid jobs. Besides that, China government is attempting to move from a manufacturing and export-driven economy to a service and domestically-driven one that will decline on the exports.

Furthermore, China is now a big force in the global economy that would certainly affect the rest of the world. Since China is the second largest in terms of economy as well as importer of both goods and commercial services; when China’s economy slows down, the prices of many commodities have been affected especially crude oil (Walker, 2016). For instance, the price of Brent crude has declined by half when the first stage of the Chinese stock market began to slide. China is a large buyer of industrial commodities that the possibility of lower-than-expected sales to the country has also undermined the prices of copper and aluminum.  While in the currency markets, the dollar could be affected although the U.S currency is strong.

While for the citizen of China, the country’s economy has impact them greatly. A more disruptive slowdown will lead to any business failures and job losses. If China is able to manage a smooth transition to a slower and more sustainable growth rate, it will more likely to increase the living standards of the China citizen.  In addition, China’s economy slowdown will affect the UK and other global economies as there will be less Chinese students or tourism. For instance, Chinese students pay a high amount of money to study at college or universities in UK. However, a slowdown in Chinese economy will result in declining of number of students and also decline in service sector earnings.

Reflective Journal 2

Book Review

        The book ‘Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years’ is written by Paul B. Carroll and Chunka Mui. Apparently, this book has divided into three major parts such as ‘The Cold Hard Facts’, ‘Failure Patterns’ and ‘Avoiding the Same Mistakes’ (Mui and Carroll, 2014). This books covers the mistakes that happen from mergers, cultural changes, and perceived interactions in business practices.