https://padlet.com/s10187497/lyzuoire0zww group members : michelle, amber, linhtet, xingyu, cristabel en-us 2018-11-13 09:47:38 UTC 2019-01-31 07:15:33 UTC hello@padlet.com s10187207 https://padlet.com/s10187497/lyzuoire0zww/wish/303655637 https://edition.cnn.com/2018/10/18/economy/china-economy-growth-q3/index.html

Analysis:
- Due to trade war, the cost of goods (such as agricultural products, machinery and services) being imported into China from USA increases. This then results in a cost-push inflation , as prices of imports are skyrocketed.
This will then negatively impact the economy and slows down economic growth, as not all organisations or firms can keep up with the increasing costs. They will then attempt to reduce expenditure, such as cutting down on manpower. With many companies retrenching their staff, it leads to many people left jobless and may even be unable to find another job. This may also increase the percentage of economically inactive people in China and also have increased brain waste where people not being able to use their skills. The slowing of economic growth may eventually lead to a recession.

-China's chances of recession are 
also increased due to the financial crisis the region is facing. 
Furthermore, during inflation, the Chinese Yuan weakens due to the fall in the value of money, where the value of a dollar is lower than what is was previously. This hence reduces the Chinese people's purchasing power as they can buy less of a good with the same amount of money as compared to previously when a dollar was worth more than what it is now.
This causes the people to buy lesser goods, reducing expenditure. This directly affects the economy as expenditure by the people (C), decreases, resulting in a drop in GDP, hence causing the economy to face a downturn.]]> 2018-11-13 11:06:33 UTC https://padlet.com/s10187497/lyzuoire0zww/wish/303655637 amburwang https://padlet.com/s10187497/lyzuoire0zww/wish/303796406 Analysis:
- When China's economy goes into a recession, other markets around the world would also be affected because China is a big supplier of goods and services to many of the country, resulting in a decrease in supply. This subsequently affects the economy in other countries as the demand for the goods and services will not be met resulting in a demand-pull inflation and subsequently, even slower economic growth or a recession.

- Also, If China goes into a recession, it may take a long time before they recover due to the high amount of debt they have. Reasons includes high interest rates as Investors are also concerned about the rising interest rates as it increases the financial cost of investment. If interest rates to are too high, firms will not be as willing to invest or consume even if there is high expectation of profits. Which adds on to lower investment/consumption = slower economic growth.

- Rising interest rates also reduces the market value of companies particualy tech firms where their valuation relies on profit growth far in the future.

- The low interest rates in US and Europe countries in the past 2 decades are due to the high saving capability in Asian countries where consumers prefer to save a larger portion of their income rather than spend/invest. This then results in a lower interest rate as the demand to save is higher than the demand for consumers, firms and government to spend thus eventually leading to slower economic growth. (Keynesian theory) 
In the event of a recession, the Chinese that tend to save rather than spend will end up being "losers " in the Winner vs Losers concept as during a recession there will be an economic slowdown of economy. This means that savings will not yield the same returns as the returns before recession. The purchasing power of individuals is also reduced as the value of a dollar of has dropped as compared to pre recession. By the means of the Keynesian model, to combat a decrease in the purchasing power of the chinese, the government has to increase spending while reducing taxes.

This low overall level of real interest rates in US & Europe then contradicts the Keynesian theory that when an economy bad, world aggregate demand is lowered as well as reduced interest rates as the economy in US is not bad and is in fact improving.


]]> 2018-11-13 15:26:49 UTC https://padlet.com/s10187497/lyzuoire0zww/wish/303796406 amburwang https://padlet.com/s10187497/lyzuoire0zww/wish/307177709 Analysis :
- Trade war will not only affect trade between china and US but will also affect global trades and investments. This is because the US is not the only trading partner of China. China is the world's largest exporter as well as the largest trading nation in the world. Thus, decisions made by China have the power to affect the economies of other countries all over the world. For example, if China chooses restrict American investment into China, as retaliation, these trade barriers will not only damage both countries but would also disrupt global supply chains as these investment decisions may cause a rise in unemployment and taxes. This will in turn cause rises in prices for imports and living standards, raising prices for consumers worldwide.

- The fundamental reason why USA is able to purchase more goods from China despite the tariffs imposed by US President Donald Trump is because there is a strong demand for imported products in the US - which is the result of low unemployment, robust growth and good consumer confidence.

- Both China's export to the USA and imports from us is increasing 
- Since exports are increasing, there is more money flowing into both countries. However due to the tariffs, there will also be an increase in outflow of cash of both countries. Hence (partially) explaining the circular flow of income. This also contributes to the China's GDP, under net exports of GDP expenditure approach

-By the cutting down of personal taxes, consumers will have stronger purchasing power and will therefore be able to buy more,  which will lead to higher spending in the economy result in an increase in GDP. This will also reduce unemployment rate as the purchasing power of consumers will get stronger, leading to an increase in demand for goods and services and hence open up more job opportunities as the economy will need more resources such as labour resource to be productive and maximise output. ]]> 2018-11-23 07:09:36 UTC https://padlet.com/s10187497/lyzuoire0zww/wish/307177709 amburwang https://padlet.com/s10187497/lyzuoire0zww/wish/307215341 Done by : 
Lim Xing Yu - S10187207
Michelle Shayna Low Shu'En - S10186920
Cristabel Chong Manling - S10187497
Wang Shi Ru Amber - S10184254
Lin Htet Win Naing Aung - S10186600

]]> 2018-11-23 09:49:48 UTC https://padlet.com/s10187497/lyzuoire0zww/wish/307215341