During these days of increasing economic distress, China has its share from the recession as well. Many companies are affected from this economic situation, while most of them lay off workers. In order to increase the spending, Chinese government chose to implement some preventive measures which will also lead to an increase in the government spending. These measures are started to be injected into the Chinese economy starting from the past months. In this way, to bring economic comfort to China’s population of billion is aimed. Needless to say that, as these development goals are targeted for the upcoming years, but not for the short-term success, we should not expect to take immediate results. Therefore, Chinese economy is estimated around 7% or one point more for this year. China also starts implementing new measures following the ones which are declared to support the 10 basic sectors. Chinese government mobilized all the resources in order to protect and preserve its fresh economy. Otherwise, an economic hardship that China would face will affect the whole wide world and the world economy cannot endure such a large-scale crisis scenario. The common view of economist is that China’s development will continue by slowing down.
The aid package which will be used by China’s 10 sectors within a period of two years costs approximately 600 billion USD. We will see how a figure so large like this can preserve Chinese economy’s dynamicity. Chinese economist are not expecting a negative development from China, although everybody agrees on whatever is done, the recession’s effects cannot be avoided. The main industries China will support during the crisis which is expected to continue until the end of 2011, or even longer, are: [1]: Machinery and Textile Industry, Ship Industry, Automobile and Steel Industries, Electronic and Information Industry, Petro Chemicals and Light Industry, Logistics Industry. Besides from these sectors, Chinese government also supports the projects supporting the citizens who are in need of help. Furthermore, other measures include; tax deductions, facilitation of credit opportunities, etc. Chinese government identified the consumption of this package as two years. While these developments take place in Asia, on the other end of the world, USA also started implementing measures in order to support the economy. The USA’s disadvantage is that the US Central Bank’s reserves are not much as the Chinese reserves. However, the USA will use the political trump cards and its influence over the world throughout this crisis. The USA applies a right policy while giving signals to soften its relationships in the problematic regions. Otherwise both the problems with other countries and the economic crisis will damage the USA. The USA gives its most significant battle against economic crisis. Besides, the sustainability of good relations with China is crucial for the USA. It can be said that by holding treasury papers in her hand, China support the USA economically. On the other hand, this also means that China has a trump card for the possible political issues. In other words these two countries are trying to survive from the crisis, without touching each other’s sensitive spots.
The last two days of USA Secretary of State Hillary Clinton’s visit to Asia, covered China. Good dialogues were established among the two countries. Both of the countries made decisions about supporting each other. This also prevented the possible political problems between the USA and China. Leaders decided to continue positive relations and cooperate on the transfer of technology, economic cooperation etc. Bearing in mind the economic crisis, out two-year-predictions are as follows:
1) We are not expecting a major political crisis between the USA and China within the next 2 years.
2) Bilateral relations between Taiwan and China will continue increasingly. It is unlikely for a mutual regional tension to take place within the next 2 years.
3) Chinese and Japanese relations will continue in a positive attitude.
4) China’s relations with its neighbors’ will continue in a good mood.
5) Although China is affected from the economic crisis, in the upcoming two years she will have more mobility inside the region and around the world.
We created a positive context with our short predictions. The most significant reason behind this is that as most of the countries China will also stay away from political crisis. Addition of new problems to China’s internal and economic problems will contradict with the “Peaceful Society” motto. It seems that China will go on its path slowly but surely within the next 2 years as fast and uncontrolled growth will damage China. In the upcoming terms, China will continue to be mentioned frequently.
[1] For further information: http://news.xinhuanet.com/english/2009-02/26/content_10899531.htm