What is actually Macroeconomics? The branch of economics concerned with large-scale or general economic factors, such as interest rates and national productivity. So the word can be interpreted as the driving forces, factors and decisions ultimately implemented as policies that corresponds to the growth of economy of the nation are included in Macroeconomics.
Let’s focus on the prospects how China managed to enter into the race turning its macroeconomics strategies and outshine as one of the major economic success taker with respect to United States.
UNITED STATES(18558.13 Billions of $ GDP)-
The U.S. ...view middle of the document...
The country has access to abundant natural resources and a sophisticated physical infrastructure. It also has a large, well-educated and productive workforce. Moreover, the physical and human capital is fully leveraged in a free-market and business-oriented environment. The government and the people of the United States both contribute to this unique economic environment.
CHINA(11383.03 Billions of $ GDP)
The rapid rise of China as a major economic power is one of the greatest economic success stories. It is now the world’s largest economy (on a purchasing power parity basis) manufacturer, merchandise exporter and importer, and holder of foreign exchange reserves.
Distortive economic policies that have resulted in over-reliance on fixed investment and exports for economic growth (rather than on consumer demand), government support for state-owned firms, a weak banking system, widening income gaps, growing pollution, and the relative lack of the rule of law in China.
The transformation from the centrally controlled country barring Private enterprises and foreign-invested firms to the supporting central government initiating price and ownership incentives for farmers, which enabled them to sell a portion of their crops on the free market has helped in removing the distortions. In addition, the government established four special economic zones along the coast for the purpose of attracting foreign investment, boosting exports, and importing high technology products into China. Economic control of various enterprises was given to provincial and local governments, which were generally allowed to operate and compete on free market principles, rather than under the direction and guidance of state planning.Economists generally attribute much of China’s rapid economic growth to two main factors: large-scale capital investment (financed by large domestic savings and foreign investment) and rapid productivity growth(i.e., increases in efficiency).China must have to focus on the technological advancement to maintain its growth.