Question

Chinese economic growth is the outstanding feature of the world economic scene over the past two decades.

a. In 2014, U.S. output was $17.4 trillion, and Chinese output was $10.4 trillion. Suppose that from now on, the output of China grows at an annual rate of 6.5% per year, whereas the output of the United States grows at an annual rate of 2.2% per year. These are the values in each country for the period 2010–2014 as stated in the text. Using these assumptions and a spreadsheet, calculate and plot U.S. and Chinese output from 2014 over the next 100 years. How many years will it take for China to have a total level of output equal to that of the United States?

b. When China catches up with the United States in total output, will residents of China have the same standard of living as U.S. residents? Explain.

c. Another term for standard of living is output per person. How has China raised its output per person in the last two decades? Are these methods applicable to the United States?

d. Do you think China’s experience in raising its standard of living (output per person) provides a model for developing countries to follow?

Answer 1

a. China's economy is growing at much faster rate than US. If it continues with current rate it will cross US output in 2030.So if the rate is constant for next 100 year China will be so much ahead of US, but according to economist Chinese economy would not go at the same rate because due to different policies like one child policy because of that at some time there will be more and more old person in China that will create the problem for economy.

b. As we know China has four times larger interms of population , so it is impossible to meet the standard of American people because their per capita income is way more higher then the Chinese people.  At current if we talk about per capita income of United States is 6.38 and 3.32 times greater than of China in nominal and PPP terms, respectively. US is the 8th richest country of the world whereas China comes at 72th rank. On PPP basis, United states is at 12th position and China is at 75th.

C. Due to will power of the government and reforms China has raised output per person . These are the places where reforms had been done.

• Labour supply. ...
• Wages and unemployment. ...
• Female participation in the workforce. ...
• Political system. ...
• Strong leadership. ...
• Free market economics. ...
• Export-led growth. ...
• Special Economic Zones and FDFD

D. Yes ofcourse we should learn from Chinese economic model and they have done work in improving the standard of living and worked toward increasing output level but there are dark side too but we have grab and learn only positive things.