Should Other Countries Fear China's Growing Economy?

Introduction

According to Economist (2011), the People’s Republic of China is the second largest economy of the world after the United States in terms of nominal GDP. Gross Domestic Product growth rate is responsible for the measurement of the total value of goods and services produced by an economy. China’s GDP rose to 1.80 percent in the second quarter of 2012, according to statistics and the total value was approximately 10,799.5 billion yuan. China is the fastest growing economy of the world. They are the largest exporters of the world and also the second largest importers. It is mostly due to the fact that the China has the largest population of the world, an estimated figure of over 1 billion people. However, due to the increasing pressure of government policies to control birth rates, the number is gradually decreasing. The consequences of the reforms are that they are one of the rapidly growing ageing economies of the world, which will ultimately reduce their workforce in the upcoming future (Times Business, 2011).

Key facts

According to statistics, China has contributed twenty percent to the world economic growth for the last two years. The domestic demand of China is responsible for the increase in retail sales by 18.5 percent, contributing for 90 percent of the country’s economic growth. Researchers estimated that the Chinese economy will surpass the United States by 2027. The Chinese GDP is predicted to be three times more than the US after 2030 and the per capital income will be overcome the US by the second half of this century. China already consists of one fifth of the world population, therefore, the following predictions are reliable and justified (Times Business, 2011).

China’s effect on the world economy

According to a poll undertaken by the (BBC World Service, 2012), the public concern for China’s economic power is rising. The research was conducted among more than 28,000 people in27 countries. The data’s shows that respondents feel that the growing economic power of China is a bad thing for their country. These numbers mostly represents wealthier nations such as US, France, Canada, Germany and Italy. In addition, they are also the key trading partner’s of China. However, the overall survey also shows a positive view of China’s growing economy. Almost 50 percent of the respondents felt that China’s growth has a positive outcome for their country and the world economy. The two nations supporting this view the most are Nigeria (82%) and Kenya (77%). In fact, most of the African nations and developing countries, except Mexico, showed their support for the Chinese economic growth (Economist, 2011).

According to Trading Economics (2011), the skepticism of China’s economic growth rose when the global economy was hit hard by recession. The developed