| In recent years there is one theme that persistently | | | | model is mainly driven by transnational corporations, |
| has occupied economics reports all over the world, | | | | which use the country as a giant export-processing |
| that theme is China. The major emerging industrial | | | | zone. This is bound up with another economic |
| power in today's world, with an economy that has | | | | phenomenon of our time; the rise of gigantic discount |
| been growing in giant steps over the last decade and | | | | retailers in Western markets, particularly in the US. |
| the first half of this. | | | | These retailers, with their extensive logistic networks |
| Just as an example, last December (2005), China's | | | | and outlets, provide an ideal channel for mass |
| National Bureau of Statistics officially added almost a | | | | producers of cheap goods based in China. And |
| fifth to the estimated size of the Chinese economy. | | | | consequently fuel the economic growth of the |
| With this latest revision, China's gross domestic | | | | country. |
| product (GDP) was over $US2.1 trillion in 2005, making | | | | The major example of these discount retailers is in |
| China the world's sixth largest economy. If we | | | | the U.S; where not many years ago the symbol of |
| consider an annual economic growth of more than 9 | | | | American capitalism was General Motors, but now it is |
| percent, which is a really big number in economics | | | | Wal-Mart; the world's largest retail company. |
| terms, it is likely that China will overtake France and | | | | Wal-Mart's sourcing from China accounted for more |
| Britain in 2006 to become the world's fourth largest | | | | than 10 percent of all US imports from China in 2002. |
| economy after the US, Japan and Germany. | | | | I should mention that Chinese exports have been a |
| Until the early 80s, China had remained a largely | | | | major factor in the growing US trade deficit, which |
| agrarian and self-sufficient economy. But today with | | | | was likely to exceed $200 billion with China last year. |
| the increasing industrialization, the country has taken | | | | The economic trend is similar with Europe. The |
| over a title given earlier to Britain's in the nineteenth | | | | Europe(EU)-China trade has increased more than |
| century, this title was, "the workshop of the world". | | | | 40-fold since 1978, making of China Europe's second |
| No wonder most of the world's toys and shoes | | | | largest trade partner after the US. The EU has gone |
| together with large portions of its textiles and home | | | | from a trade surplus with China in early 1980s to a |
| electrical appliances are now manufactured in China. | | | | deficit of EUR78 billion in 2004. According to the |
| The country is also becoming a major consumer of | | | | Chinese Ministry of Commerce, bilateral trade in the |
| raw materials and energy. In 2004, China consumed | | | | first 11 months in 2005 reached $US196.78 billion--an |
| 7.4 percent of the world's crude oil, 31 percent of its | | | | increase of 23.6 percent from the previous year. |
| coal, 30 percent of its iron ore, 27 percent of its | | | | With this short overview it is clear that Chinese |
| rolled steel, 25 percent of its alumina and 40 percent | | | | economy is gaining a primordial position in today |
| of its cement. Now you know why commodities are | | | | world's economy but it is also clear that sooner or |
| increasing their prices every year. | | | | later the big deficits incurred by its trading partners |
| Though China's industrialization model is different to | | | | will have an adverse effect in China's currency value |
| that followed by today's major industrial countries. Its | | | | and hence in it's still growing economy. |