China’s Role in the

Global economy

MBA 602 – Global Economic Environment

Presented by: William AllenJuly 2013 University of Fredericton

China’s Role in the

Global Economy

Overview Background

GDP

Trade

Bad Publicity

Wages & Financial

Economic Growth

Economic Timeline

Share of Global Exports

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

2

4

6

8

10

12

% of Global exports

Since joining WTO

China’s Trade

Total Trade $ billions

Since joining WTO

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

500

1000

1500

2000

2500ExportsImports

Major Trading ($ billions)

EU USA Asean Hong Kong

Japan South Korea

Taiwan0

100

200

300

400

500

600

Imports Exports

2012

Exports >$2,000

Imports >$1,800

Total trade with major partners >$3,800

Tiananmen Square Affect on US-China relations

Political and economic Sanctions

Some sanctions still in effect 10 years later

19801982

19841986

19881990

19921994

19961998

0

2

4

6

8

10

12

14

16

% GDP growth 1980 to 1998

Tainted foodMelamine

• Dog Food• Baby formula

Formaldehyde• Blood Pudding

Monthly Wages 2012 20% increase in

minimum wage

Mexico $1,300

Beijing Shanghai Gansu Tibet Hubei Argentina  Vietnam 0

50

100

150

200

250

300

350

400

450

Monthly Wages in US $

Annual Wages

270% increase

Impact on cost of goods?

Energy Second largest oil

importer 2012:• 5.7 million BPD• US: 9.8 million BPD

By 2035: • 13 million BPD

Financial Foreign exchange reserves

• $3.44 Trillion (2013)• 65% US• 26% euros• 5% pounds• 3% in yen.

US Debt • $1.3 trillion US

China’s Economic Growth

Capital

Worlds largest manufacturing

Increased wages

Increased productivity

Recap Continued economic growth

Second largest economy

Largest exporter

Largest importer

Largest manufacturer

Largest foreign exchange reserves

ReferencesAmericancentury, (2012, July), Chart of the Week: Wage Inflation in China: Implications for

Inflation and Global Investing. Retrieved from http://americancenturyblog.com /2012/07/chart-of-the-week-wage-inflation-in-china-implications-for-inflation-and-global-investing//

Carbaugh, R., (2013), International economics 14th edition, Wages increases and Chinese trade, pg 70

Chan, J., (2009, June), Origins and consequences of the 1989 Tiananmen Square massacre – part 3, retrieved from http://www.wsws.org/en/articles/2009/06/tien-j06.html

DeNavas-Walt, C., Proctor, B., Smith, J., (2012, September), Income, Poverty, and Health Insurance Coverage in the United States: 2011, retrieved from

http://www.census.gov/prod/2012pubs/p60-243.pdf

References Harding, H., (n.d), The Impact of Tiananmen on China's Foreign Policy, The National Bureau of

Asian research, http://www.nbr.org/publications/element.aspx?id=73

Labour department, (n.d), The government of Hong Kong Special Administrative region, Retrieved from http://www.labour.gov.hk/eng/news/mwo.htm

Morrison, w., (2013, July), China’s Economic Rise: History, Trends, Challenges, and Implications for the United States, Retrieved from http://www.fas .org/sgp/crs /row/RL33534.pdf

RT.com, (2013, July), China's US Treasury Holdings hit record $1.3 trillion, retrieved from http://rt.com/business/china-federal-debt-record-207/

ReferencesThe Conference Board, (2013, May), Global Economic Outlook 2013, retrieved from http://www.conference-board.org/data/globaloutlook.cfm

The Economist, (2012, March 10), The end of cheap China. Retrieved from http://www.economist.com/node/21549956

US v. China, (n.d), 1989: Tiananmen Square Massacre, Human Rights, Case Studies in Sanctions and Terrorism, The Peterson Institute for International Economics, retrieved from http://www.piie.com/research/topics/sanctions/china.cfm

Wageindicator.org (n.d), China Minimum Wages w.e.f July 1, 2013, retrieved from http://www .wageindicator.org/main/salary/minimum-wage/china-custom

Yueh, L., ( 2013, May), bbc.co.uk, China's ambitious plans for its huge reserves, retrieved from http://www.bbc.co.uk/news/business-22567974

QUESTIONS?