China, as the name is so familiar to nearly six billion people on the planet (exclusive of China itself), is a reigning super power of the world. It currently stands at no. 2 in its nominal gross domestic product with a not-so-far-ahead lead taken by the United States. China has always been a communist super economy within itself but in recent decades, it has opened its doors for the world to see and share its glory. Realizing and accepting trade to be one of its primary pillars in GDP has made China a leader in world trade and has risen to the ranks of super power in a matter of decades. It is no doubt that the 1.37 billion citizens of this supreme economy are its building blocks to supremacy.
The figures that we have today for you regarding Chinese economy and it trade with the Middle East will shock you, surprise you and will make you wonder what it actually means to be a citizen of the Middle East or to not be a citizen of the same (due to its trade with the ME).
Chinese Economy: A brief Overview
Since People’s Republic of China is over a billion in population, it also has the largest labor force on the planet and the labor isn’t cheap. An estimated 2013’s nominal GDP per capita stands at $7,589. This still isn’t as a bold number as it is expected because this still puts China behind 80+ more countries which are leading in per capita nominal GDP (this is between 183 countries on the International Monetary Fund list). Being a prominent member of the World Trade Organization and also the leader in world trade, its total trade values are closing in on $4 trillion. But with the fact that China is a quite behind the per capita curve and its workers, spending blood and sweat every single day in keeping the super power what it is today, are very discontented. China’s communist leaders have, the exact words are; “suggested steady and cautious control” over the minimum wages. Even when the worker wages have sharply increased over the past few years, growing faster the economy’s gross domestic product, this has made China lose the power to create more jobs as well as its competitive edge in the market.
China and the Sustainable Policy Making
This basically surfaced last year in December. But now when there isn’t an edge to the growth increase as it was back in the day, the worker wage laws are being enforced throughout the country. Even when it is a super economic and trade power, it still declares itself a developing country. This all seems like China is moving towards a more pro-capital approach towards its economy. China is to lay-off about 1.8 million coal and steel workers in an attempt to gain additional capital to invest into multiple new business and of course lucrative ones at that to bring back the competitive edge and creation of new jobs.
Let’s look at China-Dubai trade numbers a bit as well. So their bilateral trade just crossed half a trillion AED i.e. Arab Emirates Dirham. That is huge amount of money and the news surfaced in this past December. The trade growth has also been in billions in the past few years and has increased in double digits to about 174 billion AED. The total of four years of trade i.e. from 2011 – 2014 has been recorded to be 500+ billion AED (which is half a trillion mentioned above)
China’s minimum wage increase will also mean a price increase in production and retailing of each item produced. This in short means that the “made-in-China” term used around the world to define how affordable and short-lived Chinese products are, will have an entirely new meaning now. This time around, made in China will have plenty of honor and respect to get from its bad-mouthers.
Another big story in this economic cycle is the rate at which the minimum wage will be set. Even when Chinese laws and legislation defines the minimum to be 40-60% of the average income, the current raise is of about 30%. This is the reason why per capita nominal GDP of China has eighty more competitors to go. Many, like Mr. Lou, the financial minister, are of the view that this ultimately isn’t a healthy thing at all for the economy and expect the labor wage laws to not be suitable for a sustainable future. When already the wage increase is bigger than the productivity turnover, people still desire for job security and welfare benefits.
Labor laws, as straightforwardly put by Fu Jun; chairman of Marcolink Group, should be enforced in 10 years, not now. And whether or not these laws will actually make difference in the Chinese economy or will they result in a brighter outcome for all, stay tuned to find out more at Istathmir.com
