Critically discuss the threats and opportunities for an economy of your choice arising from the growth in China

p Threats and opportunities to the U .S . Economy from China

The major conflict of the 21st century is about economic advantage and the weapons are not nuclear bombs but bilateral trade agreements . The emotions surrounding US-China relations reflect the challenges of balancing economic and military interests . Let us analyze the growth of China to decrease the negative impact , if any , and to maximise from trading terms

China 's real gross domestic product (GDP ) is at an average annual rate of 9 .7 , from 5 .3 , its real per capita GDP increased

to 3rd from 27th

Chinese exports increased from 18 billion in 1980 to 969 billion in 2006 , while imports over this period grew from 20 billion to 791 billion

World Development Report informs that China 's GDP as a percentage of worlds GDP is 16 .3 in 2006

According to Corden (1984 ) foreign direct investment (FDI ) in China rose from 109 million in 1979 to over 72 billion 2005 , the third largest overall FDI destination after the U .S . and the UK

Increase in assets of the millionaires and the middle class

According to the World Bank , from 1981 to 2001 , economic reforms helped raise more than 400 million people out of extreme poverty .1

Increase in foreign exchange reserves from 2 .5 billion in 1980 to 1 trillion

The gradual and incremental approach has been due to

large accumulation of capital , gain in productivity leading to high domestic savings (51 .1 in 2006 ) and fund for new investment

surge in FDI due to trade reforms and incentives

increased productivity by more than 3 annually from 1985 to 1994

At the point of diminishing returns , China 's growth will slow to a rate of the U .S . or Japan but as it has a lesser per capita income to the U .S , it has plenty of room for further growth . U .S . will still be a leading world player

In 2004 , the world trade grew 21 .2 per cent - the highest since 1979 Major contributors were the increased trade between China and the U .S and the recovery of international trade in Association of South-East Asian Nations (ASEAN ) and Asian newly industrialising economies (NIE .Therefore , it is interesting to analyze China- Economic power of a developing country and the U .S .-current major economic power

American well being will depend on how American goods are exchanged for Chinese goods , or known as terms of trade . America will be affected by China 's future growth which will also increase the demands on the world 's natural resources and commodities

Bilateral trade among the two increased once they signed the MFN (most favoured nation ) agreement in 1980 .Accoding to World Development Report to 20 billion in 1990 , to an estimated 343 billion in 2006 . China is now the 2nd largest U .S . trading partner . But trade deficit of U .S . rose from 30 billion in 1994 to an estimated 232 billion in 2006 some analysts contend that the large U .S...