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citizens does not consider such economic bads (negative external impacts), thus overstating the well-being of China citizens.
 

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citizens does not consider such economic bads (negative external impacts), thus overstating the well-being of China citizens.
 

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citizens does not consider such economic bads (negative external impacts), thus overstating the well-being of China citizens.
 

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Lim Yee Kheng Leon (S10186498D)
Samuel Shen Hong Chang (S10186546B)
Nur Farisha Bte Sueff (S10186536J)
Soo Yong Wei (S10184398E)
Siti Nur Amirah Bte Jasman (S10186582H)

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Ni hao team China!
Thank you for creating this great wall from the bottom of your hearts.

Specific feedback/suggestions for team to explore, especially in REPORT:

Prelim Analysis - Article 1 [GDP and Unemployment]
Expand those thoughts
1. Ageing population and productivity. Link this to what you learn in lecture 1.
2. Article mentioned economic structural reform. Why is the government doing this?
3. Article mentioned about non-friendly trading partner and one more key happening that will impact China's Real GDP. Read the article again and identify it. Try using the expenditure approach of real GDP to examine how certain components can create an impact.

Prelim Analysis - Article 2 [GDP and Inflation]
1. The point on economic growth, one reason accounting for this is mentioned in the article.
2. How does pollution impact accuracy of GDP and why is the China government clamping down on this?
3. Point on inflation, "regional governments cut back on big investment projects, curbing demand for building materials" - How does this impact inflation?

Article 3
Interesting article
Woo, nice analysis on cost push inflation but please tweak it to analyse such imported inflation from China's perspective. How will China firms be impact if China slap tariffs on imported raw materials from countries like the U.S.? Find out what China import from the US.

Point on unemployment, lower economic activity caused unemployment. what type of unemployment is this?

Point on recession, need supporting points to back this up.

Try also to use the expenditure approach formula to examine how the external market impacts China's GDP.

Besides this, go beyond U.S. and check out other global issues or trading partners' impact on China if time permits.

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Article 1: China's Economic Growth Story will be Cut Short Under Xi Jinping

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Article 1: China's Economic Growth Story will be Cut Short Under Xi Jinping

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http://www.scmp.com/news/china/economy/article/2145938/chinas-economic-growth-story-will-be-cut-short-under-xi-jinping

DESCRIPTION: China's economy growth will slow to 2% by the end of the next decade, unable to continue its speed to reach their maximum potential economically

CONCEPTS:

GDP:
- "China’s per capita GDP reached US$8,800 last year"
- "China cannot be expected to quickly catch up with the United States in terms of per capita gross domestic product"
- Even though the GDP of China is slowly increasing, it is still quite low, making it be in the middle-income range. It is difficult to continue improving and scope for more investments.
- There is slow economic growth in China. The increase in unemployment rate could mean that there is quite a significant percentage of people in China who are earning very low income and could only afford the very basic necessities, thus it shows little to no economic development in China as their quality of life barely improved.
Unemployment:
- "The population is also ageing, and “this demographic change will act as a drag” rather than a dividend"
- When the population is ageing, there will be an increase in percentage of elderly people. Hence there will be a boost in retirement rate and increase in unemployment rate.
- The high unemployment rate may show that there is scarcity of jobs in China. This may be due to the inability of the government to produce more jobs. This may also show the scarcity of skilled manpower in China which is due to the people in China not having the skills required for the jobs available.

Business Cycle:
-  "The country has reported almost uninterrupted strong growth in the last four decades" (expansion towards peak)
-  "It recorded the first acceleration in seven years with annual growth of 6.9 per cent in 2017, accounting for nearly one-third of global growth"
-  "China’s growth curve would be “L-shaped” – meaning it would hover long-term at a medium growth level."
-  "[E]conomic growth was expected to remain above 3 per cent through 2050"
-  China's economy has been growing steadily over the past 40 years. By the "L-shaped" growth curve, the economy first experiences a dip, and then takes on a very slow recovery. China's economy is predicted to continue growing even until 2050
- Why is the government doing an economic structural reform in China?
Since China is experiencing aging population and less friendly trading partners after recent events, the government is trying to find another way to ensure that there is an improvement in the economic growth of China and subsequently develop the economy. This is also to make sure that China does not face any major recessions that will significantly affect the China citizens. At the same time, China's economy can remain competitive globally.
For example, an economic reform can be put in place to increase expenditure in China. The increased expenditure is thus able to kick start the expansion of the economy.

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Article 2: China's Economy hit the ground

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Article 2: China's Economy hit the ground

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Description: escalating tensions with the United States, due to slap tariffs on a further $100 billion of Chinese exports, may put China's trade war arsenal to the test

Concepts:
1. Cost-Push Inflation
If tariffs were imposed on China, it would result in China firms increasing their prices on foreign consumer goods. Consumers in China may choose to not spend so much on these goods and services. Real GDP of the country will thus start to fall and result in a recession.

Using the expenditure approach, with exports rising in prices, world-wide consumers may not spend so much on China exports, this will reduce the net imports calculated and thus the real GDP will fall.

Looking at the bigger picture, companies that buy raw materials will be affected since China is the largest world supplier for broadcasting equipment, telephones, office machine parts, integrated circuits.

With the increase in cost of production, leading to China raising prices on goods and services, it would lead to an inflation in the whole world.

2. Unemployment
With the tariffs put in place, China companies will be affected as they would have to pay more for the raw materials needed for production of goods. In order to compensate for the increase in production cost, they would retrench workers working in the companies on top of increasing the prices of the products they sell. This is known as cyclical unemployment which only occurs when the economic growth is not at the highest level relative to the previous years. Fewer employees are required to meet the lower standard of production volume during a recession.

3. Recession
During the period of inflation, decreased expenditure will occur due to the fall in demand for certain goods and services, namely leisure and luxury goods and services, since people tend to reduce overall spending and begin to save more.
Unemployment may rise due to firms trying to stay profitable from the inflation.
Business profits will thus fall and production capacity is underutilized. This is due to producers producing a lower output. These combined factors will thus lead to a recession if no actions are taken.

Link: http://money.cnn.com/2018/04/06/news/economy/china-options-trade-war-us/index.html?iid=EL

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Article 3: Chinese industrial firms' profit growth hits six-month high

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Article 3: Chinese industrial firms' profit growth hits six-month high

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zhttps://www.straitstimes.com/business/economy/chinese-industrial-firms-profit-growth-hits-six-month-high

Description: Profits earned by Chinese industrial firms in April rose at their fastest pace in six months, data from the National Bureau of Statistics (NBS) showed, as factories benefited from higher prices and strong demand.

CONCEPTS:

Economic growth:
- China's industrial sector has been earning more profits over time.
- There is slow and steady economic growth in China's industrial sector
- Between January 2017 and April 2017, profits rose by 24.4 per cent, while gains for the first four months of this year came to 15 per cent.
- Although the economic growth in the first-quarter was higher than expected, economists expect a gradual slowdown to around 6.5 per cent this year from 6.9 per cent last year, as rising borrowing costs weigh on consumption and investment.
- There is very little economic growth in China because the companies are probably unwilling to invest and hire new staff. This means that it is possible that there are skilled unemployed people in China who could actually contribute significantly to the economic growth of the companies and bring about positive economic growth to China.

Inflation:
- China's producer price inflation picked up to 3.4 per cent last month from March, but was much lower than the 6.4 per cent in the year-ago period
- When the regional government cuts back on big investment projects, there will be less expenditure by the government. This results in a decline in GDP due to decreased government spending. Therefore, the inflation will rise in China's economy.

Unemployment Rate:
- Weaker profit growth might be causing companies to be reluctant to invest and hire new staff.
- This can result in a slight increase in unemployment rate.

GDP:
- Pollution overstates the well-being of the China citizens and their economy reflected by the high Real GDP of China. With pollution, the health of the China residents and the environment of China could be badly affected. However, the calculation of Real GDP and the well-being of the China citizens does not consider such economic bads (negative external impacts), thus overstating the well-being of China citizens.