Over the years, China’s economy has grown leaps and bounds, and the East Asian country now has the world’s second-best economy.
The United States still leads the pack in this regard, but it is no secret that the Chinese have their eyes on the throne.
As everyone knows, the government of the land has a crucial role to play where boosting economic growth is concerned, a responsibility that the Chinese government embraced.
They promised to double the country’s GDP in ten years, and believe it or not, the country is just about to reach its target.
The ’70s
However, China’s journey towards global economic dominance started back in the 1970s.
The government decided to be aggressive in open markets, achieving this via central planning, exploiting cheap labor, devaluing currency, and establishing a full-bodied factory system that would spread Chinese products around the globe.
Within no time, the world had no choice but to acknowledge China for its fruitful economic policies. Who hasn’t seen the “Made in China” tag in lots of household items? Such is their dominance.
Currently, the country in East Asia has a Gross Domestic Product of $13.1 trillion, a figure that keeps getting closer to the United States’ value with each fiscal year.
With the upward trajectory, the country is on, economic analysts predict a GDP growth of 6% by the end of 2020, and with that, doubling its GDP from the 2011 figure. Impressive much?
But in as much as predictions seem to favor economic growth, China is still facing a myriad of challenges brought forth by the trade war with the United States.
Both countries are definitely hurting due to the war, but the Chinese seem to be more hard-hit compared to the US.
It is for this reason that Michael Yoshikami says that economic experts should manage their expectations where the Chinese economy is concerned. Yoshikami is one such expert himself having founded the firm Destination Wealth Management and while he doesn’t want to jump the gun, he is positive that China will always remain a global economic player.
Thinking about it, Yoshikami definitely has a point. Yes, the economy in the East Asian nation is growing, but compared to its own high standards, China is experiencing a slowdown.
According to the World Bank, 2007 was the country’s best year in terms of economic growth. They registered an increase of 14.2% but since then, growth has always been below 7%.
Locals Not Optimistic
Yoshikami, though based in San Francisco, has lots of business interests in China. He’s a frequent traveler there, and he says that the average citizen isn’t as optimistic about the country’s economy as we would like to believe.
Locals blame the trade war, and it is easy to see why they would. Tariffs set by the United States against Chinese imports are hurting them businesswise, and the fact that labor is gradually becoming expensive doesn’t help matters either.
To make the situation even worse, it seems as though the country is experiencing a manufacturing slowdown. As such, they don’t produce as many finished goods as they did say six, seven years ago.
Resolving this war, Yoshikami opines, would be just the stepping stone the country needs to get its economic affairs in order.