Effect of FDI on Chinas Technological Status Essay

Effect of FDI on Chinas Technological Status - Essay Example The researcher states that China is an emerging economy and has continued to experience great economic success starting about thirty years ago when the country achieved economic liberalization. China has successfully participated in trade and investments at the global level, thus is well integrated into the economy at the global level. Most importantly, the FDI inflows in China today are considerably high and the many foreign firms in the country continue to enhance its growth economically. Technology being a critical component of any country’s economy remains highly crucial for the development of any country, including China. In China, the policymakers have in the recent years paid great attention to technological development in the country and the major aim is to make China a technologically sophisticated country. Being an important component of the economy, it is no doubt that FDI in China influences the country’s technology. China has experienced a remarkable increa se in its FDI, and this has continued to grow to start from the mid-1980s. The paper shows data on the yearly FDI inflows of China between the year 1985 and 2014 and this exhibits an increase in FDI inflows in China, even as this stood at $2 billion in the year 1985 and grew to reach $128 billion in the year 2014. In all the developing countries of the world, China ranks among the four largest receivers of FDI and in the year 2014 estimates by the United Nations indicated that China was the worlds largest destination for FDI inflows and Hong Kong and the United States followed behind. It is predicted that there will be persistent FDI inflows in China even in the future because currently, they are still modest. Foreign companies contribute immensely to the growth of the economy in China, even as these are the source of FDI in the country. These foreign-invested enterprises remain core to Chinas foreign trade even as they continue to contribute to the growth of foreign trade in China. In the year 2014, foreign companies accounted for 46.3 percent and 45.9 percent of Chinas imports and exports respectively, even though the peak was experienced in the year 2006 when the percentage of imports and exports accounted for by the foreign companies were 59.7 and 58.2 respectively.

Economics 2 Essay Example | Topics and Well Written Essays - 750 words

Economics 2 - Essay Example Recognizing that economies are fast becoming more integrated and consolidated through the number of transactions conducted within borders, our company has started to look at the events in the global market which could affect our operations. It has began to recognize that the competition is global and that competitiveness should be enhanced in order to be at par with larger global players. This called for the installment of world best practices. How does a government budget surplus affect the economy? How does a government budget deficit affect the economy? During what periods in recent history have the U.S. run budget deficits and budget surpluses? A budget surplus indicates that a company is spending less than what it earns while a budget deficit represents the opposite. In the condition of a budget surplus, the economy is affected as consumption is seen to be lower than expected and the government often needs to stimulate spending by allowing consumers to have lesser taxes. On the other hand, a budget deficit implies that the government will need to borrow money in order to fund its expenditures. The government also often levies tax increase in order to finance its projects. In the United States, budget deficit have been observed from 1993 to 1996 while budget surplus occurs in 1998. Argue in favor of deficit spending on the part of the federal government. Then argue in favor of running government budget surpluses. List the positive and negative aspects of each. Then indicate which policy would be best at this time. A budget deficit is a very potent way in allowing consumers to save. It should be noted that during a budget deficit, customers anticipate that debt will be paid off through additional taxes in the future. Thus, in order to be able to pay these off, they will be motivated to save. On the other hand, budget surplus is recommended because the government will not need additional fund which is often acquired through borrowing from the