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Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Tuesday, 6 April 2010

United States fear from Chinas economy

United States fear from Chinas economy

Our first objective is to prevent a new competitor to us, and this is the thinking prevalent because of the new regional defense strategy, which require us to try to prevent any hostile power from dominating an area resources be sufficient to generate global power .. These include areas of Western Europe, East Asia, the former Soviet Union, and Southwest Asia ".
These specific ideas, summarized Paul Wolfowitz (Deputy Defense Secretary, former World Bank President cur) United States policy strategy, to ensure the continued influence and control of America to the world.
When he entered the George W. Bush and his top aides to the White House early in 2001, they have the strategic goals and clearly defined, demarcated by their previous years of the Republicans and Democrats. The objectives were to (revival of the doctrine of permanent U.S. control of the world, and strengthen the U.S. economy.

Which was advocated by the end of American leadership during the Soviet era, the end of the Cold War with the Second World Pole earlier, according to American newspapers quoted what it called "the draft official secret", was leaked in early 1992. Which said: "The main strategic goal of America will close the door to any future challenger may challenge American superiority.

Although this authoritarian political doctrine condemned by America's allies, but that the U.S. administration could not only put on the list of priorities. This became the goal is the fundamental principle of U.S. military policy since George Bush took the presidency in February 2001.
States in the grip of America:
The economy is strong and solid one of the main elements of the emergence of regional or global power in the world, since ancient times, the form-based physical infrastructure in the control of civilizations and peoples of other nations and peoples.
The economy is the most important factor in the emergence of a strong military force and wide, and it can bind other States economy, the wealthiest (the linking of the dollar economy of most countries in the world), is a critical factor in the undermining of any State (as occurred after the collapse of the Asian tigers less than two decades because of the collapse currencies), and also is considered a threat in any way used any state securities of foreign currency notes against any other country, as well as its strength in the establishment of treaties with other countries, and support governments to ensure their allegiance to the richest nations, and others.

Globally, there are a limited number of countries that managed to build an economic powerhouse in the world, for example, Germany has to support its economy very well after World War II, leading to the formation of a most important economic blocs in Europe, but their integration into the European Union, and not to allow to form a military force since the last world war, to take any role in the perspective of the formation of a regional power or global.
India is one of the countries that have strengthened its economy effectively in recent years, but its cold war with nuclear-armed rival Pakistan, are absorbed too much of its economy, as well as to penetrate the United States to India's economy and military strength, through numerous treaties, and selling weapons, and others.
Japan, which was the enemy of the United States during World War II, has become a mainstay of the American presence in the Asian region, through association with many of the treaties, military, economic, intellectual and strategy. In the absence of a significant military force, and the spread of U.S. troops on its territory on an ongoing basis, it is unlikely it becoming a superpower in the foreseeable future.

Only China seems to be a giant coming silently and determination, through the economy is enormous, and dreams and wide, and the strategy aims to link its many international countries, and alliances have become a real threat to American hegemony.
China's economic growth during the past years:

The world seemed surprised by the economic advances made by China during the past few years, as they were since 1978, began production of the economic growth rate of 9.4, reaching in the first quarter of this year at a rate of 10.2%.
Since 1982 and until 2002, increase the total output per capita by 5-fold. It also has 61 billion dollars of FDI in 2004, according to statistics, foreign trade has reached nearly 851 billion dollars to become the third largest country in the world in terms of foreign trade.
And to the strength in foreign trade, the U.S. trade deficit with China in 2005, more than 200 billion dollars.

As China has 750 billion dollars of foreign currency reserves, and is the second largest importer of oil in the world.
Comparing the other with the United States, China, and for the first time, surpassed the United States in the export of most goods technology around the world in 2004.
They also enjoyed a trade surplus with the United States worth 34 billion dollars of high-tech sector in 2004, the surplus rose in 2005 to 36 billion dollars. According to the magazine of the economic world in December 17, 2005.
And the recovery and economic growth do not find a way to stop now, as China has set up about 20 thousand industrial facility once again last year, and now has 442.000 engineer again in 2005, in addition to 48 thousand engineers holds a Master's degree, and 8 thousand doctor. Compared to 60 thousand engineers new only last year in America.
China has 252 billion dollars in U.S. Treasury bonds (in addition to 48 billion dollars in Hong Kong).

In the technology sector, China now consumes television sets, refrigerators and mobile phones more than the United States, for example, in 1996, China had 7 million mobile phones, compared with 44 million in the United States. Today, China has surpassed America in the use of mobile phones.
As China has 1 trillion dollars in personal savings, while the United States has 158 billion dollars only in it. It also includes the city of Shanghai, China 4 thousand skyscraper, which is twice the number of skyscrapers in New York City (according to The Wall Street Journal, the number of November 19, 2005).
According to the global economic forecasts, China will overtake the U.S. economy completely in all Mahaneh in 2041 at the latest.
China large ambitions:
Does not seem to dream of the Chinese economic standing at a certain extent, as China pursues a multiple approach to the development of their industrial and economic development of the near future.

For example, the site says (Asia Times) a specialist on Asia: "The source of the economic miracle in China is that Chinese cities, it includes 135 million people in 1995 only, but will grow to more than 800 million people in 2050, according to forecasts to the expectations of the population in the United Nations. "
He continues by saying: who have spent their lives in rural poverty, began to join the world economy, where economic growth has more than 10%, and gross domestic product of China doubles every seven years, and this rate can stay at the rate of increase was as long as possible to move people from agriculture, which gives low productivity, to large industrial production .. Today, the proportion of the rural population to the city in China doubled, but the middle of this century, will be the proportion of people in the countryside to the city; half. "
Regionally, China maintains good relations with the countries of the region through economic agreements extensive, and by allowing their products to pass through to the countries that benefit from effective, such as Australia, South Korea and India, countries that the U.S. is trying to link them with U.S. anti-China.

Countries in the region trying to take advantage of economic recovery in China effectively, by providing China with oil and gas, iron and wood, and other materials.
Globally, China is trying to stretch some parts of the world's oil, through the establishment of oil agreements with many countries. They accounted for the visit of President Hu Jintao's recent visit to Saudi Arabia, Nigeria and Kenya, another victory for the Chinese economy. As agreed by China and Saudi Arabia to build oil storage reserve in China, as well as a huge petrochemical project company between the two countries.
Chinese President also held an agreement with Nigeria to extract oil from the four regions.
According to Xinhua news agency: "The Nigerian side made for a Chinese oil permits extraction in 4 regions of oil fields, located two of them in the delta of the River Niger to the oil-rich, while located the other two in the territory of Lake Chad, which are conditions of the natural poor has been invested yet."

As China continues to signing oil contracts with Sudan.
And on oil cooperation between China and Sudan, the agency says: "The Chinese companies started to participate in the development of Sudan's energy hugely since the last century."
Adding that the Chinese oil company has invested until the end of 2003, equivalent to 2.7 billion U.S. dollars, and built pipeline to transport oil length of the total 150.6 km, completed the construction of a plant of annual production capacity 2.50 million tons of crude oil, as well as the construction of plants for the supply of oil, which on Sudan from an oil importer into an exporter of oil. "
During the Chinese president's trip to Kenya, China has signed trade agreements and economic and technical with Kenya, has been strengthened relations between the two countries to very high levels.
Business, increased trade between China and African countries from 10 million U.S. dollars in the fifties to about 39.7 billion dollars in 2005. Increased African exports to China 10 times, to reach 21 billion U.S. dollars.

As China direct investment to 1.25 billion dollars, and held more than 800 companies funded by China in Africa. According to the Chinese News Agency.
So far, China has lowered its debt of 10.5 billion yuan (about 1.3 billion U.S. dollars) for 31 African countries. Also eliminated tariffs on 190 categories of African exports to China, Africa's economy in order to link Beijing and its wheel.
American economic policy against China:
Does not appear that the United States currently able to do step that would cause the collapse of the Chinese economy growing strongly, but may consider other policies if called to do so.
One of the scenarios presented by the Krupp Victor (Professor in Public Administration from the Kennedy School at Harvard) that the American forces conducted a military operation against China, under any circumstances, China has to strike Taiwan declared formal independence ..
According to the theory of Victor, the U.S. forces may be used Hamladtha Barjatha and deployed in the Pacific for military strikes to China, assisted by Japan, and hopes to involve South Korea and Australia to do so. Remembering many details of the capacity of both America and China military confrontation .. But interesting to consider here what he says about China's use of Victor of the economy in striking the U.S., where he says: "The China has some trump cards, including ownership of a large bond in the U.S. Treasury." He pointed out that the exploitation of China, it will affect the U.S. economy directly.
Despite this possibility, but many political observers see the military strike as a "option of last resort" to prevent the establishment of China's great power in the world.
In response, the United States is trying to impose the laws of an international global trade on China, in order to break its economic weight, and forced to open their markets duty-free goods competition from America and the West.
Also trying to undermine the support of economic centers are trying to escape the grip of China, Ktioan, Hong Kong, as well as turn them to the Western countries against China's policy efforts to obtain a larger share of African oil. It has many of the American media and European, to describe China as a "new colonial" attempts to colonize the African countries. Because of recent decades, which was signed by Chinese President during his visit to African countries.
With Beijing rejects the charges, appears to be continuing to pursue its long-term objectives cheered by many countries in the world like a dream for the salvation of American hegemony, or as economic support to the economy of some poor countries, or developing as an economic power could be used in long-term contracts.
But the United States into consideration again to this new force, and to their credit several accounts amid expectations of almost certain that Washington must take steps against this giant of the new yellow, sooner or later.

Thursday, 30 April 2009

TEN PRINCIPLES OF ECONOMICS {part 1} (1-4)

Part 1 (PRINCIPLES 1 - 4)

PRINCIPLE #1: PEOPLE FACE TRADEOFFS

The first lesson about making decisions is summarized in the adage: “There is no
such thing as a free lunch.” To get one thing that we like, we usually have to give
up another thing that we like. Making decisions requires trading off one goal
against another.
Consider a student who must decide how to allocate her most valuable resource—
her time. She can spend all of her time studying economics; she can spend
all of her time studying psychology; or she can divide her time between the two
fields. For every hour she studies one subject, she gives up an hour she could have
used studying the other. And for every hour she spends studying, she gives up an
hour that she could have spent napping, bike riding, watching TV, or working at
her part-time job for some extra spending money.

Or consider parents deciding how to spend their family income. They can buy
food, clothing, or a family vacation. Or they can save some of the family income
for retirement or the children’s college education. When they choose to spend an
extra dollar on one of these goods, they have one less dollar to spend on some
other good.
When people are grouped into societies, they face different kinds of tradeoffs.
The classic tradeoff is between “guns and butter.” The more we spend on national
defense to protect our shores from foreign aggressors (guns), the less we can spend
on consumer goods to raise our standard of living at home (butter). Also important
in modern society is the tradeoff between a clean environment and a high level of
income. Laws that require firms to reduce pollution raise the cost of producing
goods and services. Because of the higher costs, these firms end up earning smaller
profits, paying lower wages, charging higher prices, or some combination of these
three. Thus, while pollution regulations give us the benefit of a cleaner environment
and the improved health that comes with it, they have the cost of reducing
the incomes of the firms’ owners, workers, and customers.
Another tradeoff society faces is between efficiency and equity. Efficiency
means that society is getting the most it can from its scarce resources. Equity
means that the benefits of those resources are distributed fairly among society’s
members. In other words, efficiency refers to the size of the economic pie, and
equity refers to how the pie is divided. Often, when government policies are being
designed, these two goals conflict.
Consider, for instance, policies aimed at achieving a more equal distribution of
economic well-being. Some of these policies, such as the welfare system or unemployment
insurance, try to help those members of society who are most in need.
Others, such as the individual income tax, ask the financially successful to contribute
more than others to support the government. Although these policies have
the benefit of achieving greater equity, they have a cost in terms of reduced efficiency.
When the government redistributes income from the rich to the poor, it reduces
the reward for working hard; as a result, people work less and produce
fewer goods and services. In other words, when the government tries to cut the
economic pie into more equal slices, the pie gets smaller.
Recognizing that people face tradeoffs does not by itself tell us what decisions
they will or should make. A student should not abandon the study of psychology
just because doing so would increase the time available for the study of economics.
Society should not stop protecting the environment just because environmental
regulations reduce our material standard of living. The poor should not be
ignored just because helping them distorts work incentives. Nonetheless, acknowledging
life’s tradeoffs is important because people are likely to make good
decisions only if they understand the options that they have available.


PRINCIPLE #2: THE COST OF SOMETHING IS

WHAT YOU GIVE UP TO GET IT
Because people face tradeoffs, making decisions requires comparing the costs and
benefits of alternative courses of action. In many cases, however, the cost of some
action is not as obvious as it might first appear.
Consider, for example, the decision whether to go to college. The benefit is intellectual
enrichment and a lifetime of better job opportunities. But what is the
cost? To answer this question, you might be tempted to add up the money you
spend on tuition, books, room, and board. Yet this total does not truly represent
what you give up to spend a year in college.
The first problem with this answer is that it includes some things that are not
really costs of going to college. Even if you quit school, you would need a place to
sleep and food to eat. Room and board are costs of going to college only to the extent
that they are more expensive at college than elsewhere. Indeed, the cost of
room and board at your school might be less than the rent and food expenses that
you would pay living on your own. In this case, the savings on room and board
are a benefit of going to college.
The second problem with this calculation of costs is that it ignores the largest
cost of going to college—your time. When you spend a year listening to lectures,
reading textbooks, and writing papers, you cannot spend that time working at a
job. For most students, the wages given up to attend school are the largest single
cost of their education.
The opportunity cost of an item is what you give up to get that item. When
making any decision, such as whether to attend college, decisionmakers should be
aware of the opportunity costs that accompany each possible action. In fact, they
usually are. College-age athletes who can earn millions if they drop out of school
and play professional sports are well aware that their opportunity cost of college
is very high. It is not surprising that they often decide that the benefit is not worth
the cost.

PRINCIPLE #3: RATIONAL PEOPLE THINK AT THE MARGIN

Decisions in life are rarely black and white but usually involve shades of gray.
When it’s time for dinner, the decision you face is not between fasting or eating
like a pig, but whether to take that extra spoonful of mashed potatoes. When exams
roll around, your decision is not between blowing them off or studying 24
hours a day, but whether to spend an extra hour reviewing your notes instead of
watching TV. Economists use the term marginal changes to describe small incremental
adjustments to an existing plan of action. Keep in mind that “margin”
means “edge,” so marginal changes are adjustments around the edges of what you
are doing.
In many situations, people make the best decisions by thinking at the margin.
Suppose, for instance, that you asked a friend for advice about how many years to
stay in school. If he were to compare for you the lifestyle of a person with a Ph.D.
to that of a grade school dropout, you might complain that this comparison is not
helpful for your decision. You have some education already and most likely are
deciding whether to spend an extra year or two in school. To make this decision,
you need to know the additional benefits that an extra year in school would offer
(higher wages throughout life and the sheer joy of learning) and the additional
costs that you would incur (tuition and the forgone wages while you’re in school).
By comparing these marginal benefits and marginal costs, you can evaluate whether
the extra year is worthwhile.
As another example, consider an airline deciding how much to charge passengers
who fly standby. Suppose that flying a 200-seat plane across the country costs
the airline $100,000. In this case, the average cost of each seat is $100,000/200,
which is $500. One might be tempted to conclude that the airline should never
sell a ticket for less than $500. In fact, however, the airline can raise its profits by
thinking at the margin. Imagine that a plane is about to take off with ten empty
seats, and a standby passenger is waiting at the gate willing to pay $300 for a seat.
Should the airline sell it to him? Of course it should. If the plane has empty seats,
the cost of adding one more passenger is minuscule. Although the average cost of
flying a passenger is $500, the marginal cost is merely the cost of the bag of peanuts
and can of soda that the extra passenger will consume. As long as the standby passenger
pays more than the marginal cost, selling him a ticket is profitable.
As these examples show, individuals and firms can make better decisions by
thinking at the margin. A rational decisionmaker takes an action if and only if the
marginal benefit of the action exceeds the marginal cost.


PRINCIPLE #4: PEOPLE RESPOND TO INCENTIVES


Because people make decisions by comparing costs and benefits, their behavior
may change when the costs or benefits change. That is, people respond to incentives.
When the price of an apple rises, for instance, people decide to eat more
pears and fewer apples, because the cost of buying an apple is higher. At the same
time, apple orchards decide to hire more workers and harvest more apples, because
the benefit of selling an apple is also higher. As we will see, the effect of price
on the behavior of buyers and sellers in a market—in this case, the market for
apples—is crucial for understanding how the economy works.
Public policymakers should never forget about incentives, for many policies
change the costs or benefits that people face and, therefore, alter behavior. Atax on
gasoline, for instance, encourages people to drive smaller, more fuel-efficient cars.
It also encourages people to take public transportation rather than drive and to
live closer to where they work. If the tax were large enough, people would start
driving electric cars.
When policymakers fail to consider how their policies affect incentives, they
can end up with results that they did not intend. For example, consider public policy
regarding auto safety. Today all cars have seat belts, but that was not true 40
years ago. In the late 1960s, Ralph Nader’s book Unsafe at Any Speed generated
much public concern over auto safety. Congress responded with laws requiring car
companies to make various safety features, including seat belts, standard equipment
on all new cars.
How does a seat belt law affect auto safety? The direct effect is obvious. With
seat belts in all cars, more people wear seat belts, and the probability of surviving
a major auto accident rises. In this sense, seat belts save lives.
But that’s not the end of the story. To fully understand the effects of this law,
we must recognize that people change their behavior in response to the incentives
they face. The relevant behavior here is the speed and care with which drivers operate
their cars. Driving slowly and carefully is costly because it uses the driver’s
time and energy. When deciding how safely to drive, rational people compare the
marginal benefit from safer driving to the marginal cost. They drive more slowly
and carefully when the benefit of increased safety is high. This explains why people
drive more slowly and carefully when roads are icy than when roads are clear.
Now consider how a seat belt law alters the cost–benefit calculation of a rational
driver. Seat belts make accidents less costly for a driver because they reduce
the probability of injury or death. Thus, a seat belt law reduces the benefits to slow
and careful driving. People respond to seat belts as they would to an improvement
in road conditions—by faster and less careful driving. The end result of a seat belt
law, therefore, is a larger number of accidents.
How does the law affect the number of deaths from driving? Drivers who
wear their seat belts are more likely to survive any given accident, but they are also
more likely to find themselves in an accident. The net effect is ambiguous. Moreover,
the reduction in safe driving has an adverse impact on pedestrians (and on
drivers who do not wear their seat belts). They are put in jeopardy by the law because
they are more likely to find themselves in an accident but are not protected
by a seat belt. Thus, a seat belt law tends to increase the number of pedestrian
deaths.
At first, this discussion of incentives and seat belts might seem like idle speculation.
Yet, in a 1975 study, economist Sam Peltzman showed that the auto-safety
laws have, in fact, had many of these effects. According to Peltzman’s evidence,
these laws produce both fewer deaths per accident and more accidents. The net result
is little change in the number of driver deaths and an increase in the number

of pedestrian deaths.

Peltzman’s analysis of auto safety is an example of the general principle that
people respond to incentives. Many incentives that economists study are more
straightforward than those of the auto-safety laws. No one is surprised that people
drive smaller cars in Europe, where gasoline taxes are high, than in the United
States, where gasoline taxes are low. Yet, as the seat belt example shows, policies
can have effects that are not obvious in advance. When analyzing any policy, we
must consider not only the direct effects but also the indirect effects that work
through incentives. If the policy changes incentives, it will cause people to alter



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