China's Trade Surplus Climbs tor record in August
Exports increased 9.4% from a year ago in China and imports unexpectedly dropped from 2.4%, creating a trade surplus of $49.8 billion. This pertains to our discussions in class about net imports/exports. China is the world's second largest economy, and their great manufacturing capability is one of the main reasons for this. China has been able to grow at very high rates over the past years due to the advantages of manufacturing in China for businesses. This has allowed for accelerated growth in GDP and as this article indicates, they are still shipping a large amount of goods over seas, and growing in this area.
There is no need for stimulus as the demand from overseas continues to rise which allows China in theory to have a stronger economy without the need for intervention. GDP in China is expected to grow at about 7.5% this year. The demand for products made in China is continuing to increase despite what the media has said about businesses wanting to manufacturing in America once again. This is evidence of that.
http://www.bloomberg.com/news/2014-09-07/china-s-trade-surplus-climbs-to-record-in-august.html
This is an interesting article, especially when compared with the previous post that discussed the idea that many companies are looking for alternate countries (to China) for manufacturing. It seems that China is still 'top dog' for companies looking for inexpensive manufacturing today.
ReplyDeleteChina's GDP is still increasing every year but has been slowed down a lot due to "reduced momentum in investment and consumption" according to Mark Magnier from wsj.com.
ReplyDeleteAn interesting note that plays a role in this is that in business to business transactions there is much less of a concern on where the product is made and they are only concerned with cost. In business to consumer transactions there is concern on where a product is made and cost so there is more of a trade off in that situation.
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