China Races by Japan to become No. 2 global economy

China has roughly the same land as the United States, but it is burdened with a fifth of the world’s population and insufficient resources.

Its per capita income is more on a par with those of impoverished countries like Algeria, El Salvador and Albania – which, along with China, are close to $3,600 – than that of the United States, where it is about $46,000.

Yet there is little disputing that under the direction of the Communist Party, China has begun to reshape the way the global economy functions by virtue of its growing dominance of trade, its huge hoard of foreign exchange reserves and U.S. government debt, and its voracious appetite for oil, coal, iron ore and other natural resources.

China is already a major driver of global growth. The country’s leaders have grown more confident on the international stage and have begun to assert greater influence in Asia, Africa and Latin America, with things like special trade agreements and multibillion-dollar resource deals.

“They’re exerting a lot of influence on the global economy and becoming dominant in Asia,” said Edwar S. Prasad, a professor of trade policy at Cornell University in New York. “A lot of other economies in the region are essentially riding on China’s coattails, and this is remarkable for an economy with a low per capita income.”

In Japan, the mood was one of resignation. Though increasingly eclipsed by Beijing on the world stage, Japan has benefited from a booming China, initially from businesses moving production there to take advantage of lower wages and, as local incomes have risen, from tapping a large and increasingly lucrative market for Japan goods.

Beijing is also beginning to shape global dialogues on a range of issues, analysts said. Last year, for instance, it asserted that the dollar should be phased out as the world’s primary reserve currency.

And while the United States and the European Union are struggling to grow after the worst economic crisis in decades, China has continued to gain by investing heavily in infrastructure and backing a stimulus plan worth 4 trillion renminbi, or $588 billion.

“This is just the beginning,” said Wang Tao, an economist at UBS in Beijing. “China is still a developing country. So it has a lot of room to grow. And China has the biggest impact on commodity prices in Russia, India, Australia and Latin America.”

There are huge challenges ahead, though. Economists say that China’s economy depends too heavily on exports and investment and that it needs to encourage greater domestic consumption, something China has struggled to do.

State-run banks in the country have recently been criticized for lending too aggressively in the last year while shifting some loans off their balance sheets to disguise lending and evade rules meant to curtail the supply of credit.

The country also faces huge environmental challenges that could undermine its expansion.

China is also locked in a fierce debate over its currency policy, with the United States, European Union and others accusing Beijing of keeping the renminbi artificially low to bolster exports, leading to huge trade surpluses for China but major bilateral trade deficits for the United States and the European Union.

Regardless, China’s rapid growth suggests that it will continue to compete fiercely with the United States and Europe for natural resources, while also offering great opportunities for companies eager to tap its market.

 

 

Tasks:

I. Insert the prepositions where it is necessary:

 

1) China is burdened …. a fifth …. the world’s population and insufficient resources.

2) …. the direction of the Communist Party China has begun to reshape the way the global economy functions …virtue ….its growing dominance … trade.

3) China is exerting a lot …influence … the global economy.

4) Japan has benefited ….a booming China, initially ….businesses moving production there to take advantage ….lower wages and ….tapping a large and increasingly lucrative market …Japan goods.

5) China has asserted that the dollar should be phased …as the world’s primary reserve currency.

6) The United States, European Union and others accuse Beijing ….keeping the renminbi artificially low to bolster exports, leading ….huge trade surpluses …China but major bilateral trade deficits ….the United States and the European Union.

 

II. Match the words in column a) with their synonyms in column b):

a) roughly; dispute; voracious; to assert; to eclipse; to boom; impact; challenge; to evade; to curtail; to undermine

 

b) to destroy; difficult problem; influence; debate; to maintain; to avoid; to outshine; to grow; greedy; approximately; to reduce

 

III. Match the word combinations with their English equivalents from the text:

Быть обремененным чем-то; бедные страны; растущее господство; волчий аппетит; движущая сила мирового масштаба; оказывать влияние на; миллиардные сделки; вытеснена с мировой арены; воспользоваться более низкой зарплатой; прибыльный рынок; внутреннее потребление; валютная политика; активный торговый баланс; наравне с; на душу населения; пойти в гору благодаря связям

 

IV. Translate the sentences from Russian into English:

1) Япония, хотя и чувствует себя вытесненной с мировой арены, выиграла от растущей экономики Китая тем, что многие японцы завели в Китае свой бизнес, пользуясь тем, что заработные платы там ниже.

2) Следует согласиться, что Китай утвердился себя в роли мирового лидера не только в экономике, но и в политике.

3) Китай оказывает огромное влияние на развитие мировой экономики благодаря своему господству в торговле, огромным запасам иностранной валюты и долгу правительства США.

4) В то время как США и многие европейские страны пытаются выйти из экономического кризиса, экономика Китая продолжает набирать темп роста, превращаясь в движущую силу мирового масштаба.

5) Китай уже оказывает огромное влияние на цены на товары во многих странах Азии.

 

 

Var. II