China, an Engine of Growth, Faces a Global Slump Essay

Yardley, J. , & Bradsher, K. (2008). China, an Engine of Growth, Faces a Global Slump. New York Times, October 23, p. A6. In the article Yardley and Bradsher discuss China’s’ economic and financial slump caused by the global financial crisis. For three decades China has been one of the most powerful and promising countries in the world. The country has managed to booster its economic development due to flood of low-priced exports. However, global crisis negatively affects the country that faces the possibility of global recession. The question is whether the ruling Communist Party is able to prevent global financial crisis and to support China’s economic miracle. Economists and analysts say that China’s economic development plays crucial role for economies of the United States and European countries as they face serious downturns. Nonetheless, Chinese economic model is to be recalibrated, domestic investments are be stricken with government spending, and policies aimed at increasing consumer demand are to be promoted. China is in need of better health care network, improvements in social safety network, and lower fees for education establishments. Chinese government claims that global crisis insulates country’s financial system and, thus, leaders argue country’s banks would remain domestically concentrated. The overall economic growth has decreased, unemployment rates have increased and many factories have closed export region. China is recommended to use its foreign reserves for purchasing stocks in European as it gives China an excellent opportunity to gain more experience in global business. Some researcher say that America’s decline is inevitable and if China is prepared to manage it, it will be ready to stand as a superpower. In its turns, China isn’t willing to be considered as a replacement of the USA as it is still a developing country with more foreign reserves and more problems than other countries.