The 21st century has been a century dominated with economic growth and the rise of super powers such as the United States, china and Britain. Such powers play dominant roles in shaping the trend and nature of the global economy. This significantly affects the other nations still struggling with development matters through exchange rates and borrowing interest rates. The United States leads in the global economy though it is currently facing steep competition for the post by the other rising economic nations. Being the earliest developed nation, the United States was, and is still at a better position to lead the global economy than china and the other economic nations. However, this position is under immense challenge as with time, other nation’s advancements, especially China, focus on the same position. The dynamic development of the economy of China is particularly impressive, and with time, it will come to dominate other top economies. However, it still has a long way to go, and it needs to double its efforts to achieve this position.
Getting to know how China operates its economic and business environments is tremendously helpful. It has been able to retain its year on year GDP growth thus riding out the current global economic crisis (Saee 11). One can see this through an analysis of contextual basis that cause exceptionally rapid raising economic power and the conceptual consequences to economies of nations and countries dealing with China on the economic level. Such situations make China seem like a capitalists nation and, as such, not favourable for economic dealings with other countries. The raising of such a country to lead the global economic market would raise global concern especially among the less developed and developing nations. It will, therefore, need to employ the use of new policies and rules that are friendly and substitutive in the international market. This will make it acceptable as an economic power among nations that strive for the best economic states of all (Saee 12).
Late in the last century and early this century, China has been emerging as the second largest economy in the world and constantly nagging the United States of America for the first position (Saee 81). This expected rapid shift of economies raises questions regarding how China will affect the global economy. China is of notable sheer size and dynamism in industrial and economic markets and, as such, a force to reckon when it comes to contention for the top position in running the global economy. It has the power, the will, the skill, and both manpower and technology to handle such a position.
In the international system, China seems to be a responsible stake holder rather than a regime spoiler. It has observed and been part of the international system and thus playing a pivotal part in creating a positive reactive role in the Asian region towards the economic market.
The U.S., after the Second World War, took, modified and implemented the IMF, GATT and World Bank based international systems and assumed the responsibility of forming the norms and rules of running the global economy (Rodriguez 68). It has been performing well so far, and the removal of such a power to replace with China that is only yet in the rising is not advisable. According to Rodriguez (76), China still needs to grow economically and be able to adapt the systems and policies of governance that go hand in hand with leading the global economic market system.
Economically, China still has lower financial capability than the US. The United States holds slightly more than a quarter of the domestic product of the global economy. This is according to the present exchange rates of the global market. This has fallen over the years from 60% in account of the various rising economic nations such as China (Lawrence 110). No other nation or country is yet to match the economic capability of the US. This has a truly significant effect on the shaping of the global economic rules and economic behaviour. As such, replacing the United States as leader of the global economy with China, would mean having a member country that is stronger than the leader and can, therefore, substantially control the decisions of the leader. The United States would still remain the influential power in the back ground with the ability to change certain key decisions that China, the economic leader may make. This would be undermining to the leading power of the global economy and the whole established system. Such conditions make China in an unfit position to lead the global economy despite its apparent economic raise over the century.
According to Kettles (56), policy initiatives and change are highly crucial steps for a leader of the global economy as shown by the United States. The same statement cannot be said about China. This fact is more significant in the performance of the global economy and the international exchange rates regime. In this line, China has been dragging itself in modernizing its exchange rates regime which has been a damaging factor to the international economic order. China itself agrees to this fact and bequests for more time to adapt to such mechanisms. This is mainly in line with political systems growth and emphasizing on output and employment. The change of a country’s exchange rates systems regime is a complex transition that will even impact its powerful interests as it requires extensive domestic restructuring (Kettles 70). This alone is a considerable stumbling block in leading the global economic market thus making China ineffective for the position.
In conclusion, China is a powerful nation when it comes to the global economy, and it has various influences on the system and its development. It is of a big size, and its market is globally vast and developed. It is currently the second global economic power according to the policies and rules governing this system (Lawrence 102). Despite these numerous achievements, there are key developmental changes especially in internal governance and economic policies still required. As discussed above, these inadequacies are of eminent importance on how China will lead the global economy and implement the system policies and rules that come with it. As such, China’s internal governance and policies relating to their economic relations both internally and externally need more development (Rodriguez 80). Such developments take a long time to be established and as such, China still needs more time. In spite of this fact, we can be sure that, with such a trend in China’s development as an economic power, it will, without a doubt, get to the top.
Kettles, Charles. China’s Role in the Global Economy of the 21st Century – Key Policy Issues, London: Sage publishers, 2007. Print.
Lawrence, Hugh. China’s Role in the 21st Century Global Economy, London: Taylor and Francis, 2011. Print.
Rodriguez, Paul. China, India, and the United States: The Future of Economic Supremacy, Virginia, Charlottesville: University of Virginia Press, 2008. Print.
Saee, John. China and the Global Economy in the 21st Century, New York: Routlege Publishers, 2011. Print