From Mao to the Mall

The article is about the Chinese economy, it presents the evolution of its development. The opinions are divided when comes about the fact that economic growth is due to the export or the domestic demand. Also the articles speaks about the impact of American recession on Chinese economy. Another theme debated is the global tendency towards increased consumption and less investments.

In our project we will speak about the facts that made the Chinese economy expand and these are: the increase of export and domestic demand. We made a comparison between China and Romania on inflation, consumption and investment. We also gave a short explanation of the title

Amid all the global gloom, the good news is that China is turning into a nation of spenders, as well as sellers.

During almost three decades the value of external trade has raised over 85 times (in 2006) including the exports ( 100 times) and the imports (73 times). The level of export in GDP has raised from 22 percent in 1978 to 36 percent in 2006. The rate development of this sector was brought forward those of general economic increasing, and the exports have overcome the imports( 1.23 times), in this last year of management. As a absolute size of external trade from 2004 China(without Hong Kong) has overcome Japan, being overcome at this indicator only by SUA and Germany. The accelerate growth of exports has permitted reaching an active commercial balance: in 2006 the sold has collected almost 178 billions dollars.

The rhythm of increasing reflects not only the capacity of the Chinese exporters to find alternative market but and the high role of domestic demand which fuels the Chinese expansion. In my opinion the main beneficiary of domestic demand are the producers of the products with the highest demand, especially the ones in agriculture industry.

Even if the economical problems of the SUA don't affect directly the economy of the EU , their influence could pass through China. The American recession influences a lot more the states are developing. Countries with medium incomes, like Brazil, would suffer a lot by decreasing external trade and by reduction of foreign investments.

The economists have different opinions when comes to the influence of the American recession on the European economy. Even if in the last years it is said that the European economy was successful in disconnecting from the American economy long enough that it would suffer , but more and more economics have doubts about that.

The main support of China are increased exports. If the foreigners wouldn't buy the excesses of production, there would be a loss of resources and the current account would be in deficit.

The commercial balance of Romania is negative, although it is estimated a growth of exports with 15 percent. According to Mediafax the commercial balance maintains negative and as a result of increasing domestic consumption, which is not covered by the internal production and because of the import of petroleum products and gas. The value of commercial changes is estimated at about 70 billion euro. The Romanian companies are going to be supported to participate at several international fairs and exhibitions, specialized on domains, for encouraging the exports.

The biggest part of Chinese export are for SUA which is in recession. The exports decreased considerable due to domestic demand from the SUA and of the impact of a stronger yuan.

Chinese imports advanced faster than exports thanks to the increasing demand and to the development of industry. The

1. http://www.exportromania.com/

2. http://www.cugetliber.ro/ /articol/

3.http://www.wall-street.ro/articol/Economie/8409/

4. http://en.wikipedia.org/wiki/Mao_Zedong