Home > Free Essays > Economics > Economic Systems & Principles > China as an Economic Threat

China as an Economic Threat Report (Assessment)

Exclusively available on IvyPanda Available only on IvyPanda
Updated: Dec 12th, 2019


Tremendous economic growth in China coupled by the “open door” policy adopted by the regime has presented Asian and Western nations with major trading and investment opportunities. Nevertheless, the size and political complexion of China together with its current rate of economic growth make it a potential threat for many countries (Häuslein, 2010).

As economic expansion continues in China, there is an increase in potential benefits and perceived threats of this phenomenal development by various countries. This essay will highlight China as an economic threat.


According to Steinfeld (2010), China provides a dynamic economy in a world that is coming into terms with the effects of recession. Multinationals, western exporters, and investors are wary of the remarkable transformation the country has achieved since 1978. Before this year the role of China in the global economy was insignificant.

The Americans are the most concerned over the increased economic strength of China. According to new surveys, most of the Americans want the U.S. leaders sturdy with the Asian giant on economic and trade issues. Moreover, a firm populace alludes to outsourcing of work and trade arrears as perturbing issues. Americans are more concerned of the trade and industry power of China and its incredible expansion than its martial prowess.

The economy of the United States is bigger than China’s. China overtook Japan in the latest years and is currently the second economy. Nevertheless, China’s economy is growing at a more rapid rate than the economy of the United States.

Even in the event of an economic slowdown, the economy of China registers an annual growth of more 7%. In contrast, the economy of the United States has an annual growth of 2% or 3% during a slowdown.

According to Peerenboom (2007), the trade opening between the United States and China widen to $280 in the last year and experts predict that it will continue to widen in the coming years. Although the Americans consider the economic ascend of the Asian Nation as a risk, they consider several positive attributes to the population of China.

The majority of the Americans depict Chinese people as aggressive, creative, and assiduous. The Americans also consider that economic expansion will culminate in a democratic China. However, only a fraction of the American population designates that China can be relied on a fair amount or a great deal.

A depiction of China’s economic condition

A depiction of China’s economic condition (Source: Yee & Storey, 2013)

Another country equally bothered by the economic rise is Japan. Japan has been overtaken by China in the recent years as the second economic power after the United States. The Ministry of Trade, Economy, and Industry in Japan highlighted the need for cooperation with China rather than competing in global trade.

The ministry advised that Japan was supposed to seek the creation of an innovative system, which would split the fiscal roles of the country and East Asia countries. This would progress effectiveness amid increased competition.

According to a draft by the ministry, while the competition intensified between the rising economic giant and other countries in East Asia like Japan, the establishment of a system that would efficiently distribute labor within the Asian region would develop the region as a whole (Menges, 2005).

The ministry of trade and economy in Japan sees China as a country that has improved competition in various industries, which vary from information technology, and textiles among other labor-intensive activities. The ministry sees China as the main production center in the world and the largest manufacturer in the world.

Costs of labor in the Asian nation, which are very low compared to Japan, have promoted investment by European, the United States, and various foreign companies in the manufacturing field. This has raised the economy of China in the recent years (Summers, 2012).

A report by concerned authorities in Japan deemed the Chinese economy a mighty rival. This report added that the period in which Japan led other Asian countries in economic matters had ended and that the period of intense competition amid various nations had commenced. While the economy of Japan has remained stagnant for many years, the economy of its rival has roared ahead and is on the course of overtaking the economy of the United States.

If China will become the next big producer, American companies will strive for inclusion. Failure to be included in the country’s manufacturing operations will lead to loss of competitiveness to EU firms and Japan (Ravenhill, 2006).

The competition between top economies to get involved in China’s operations is similar to the scramble for influential spheres that occurred a century ago. However, there are numerous critical disparities from the scramble that happened a century ago. First, the reference outline for firms in America has changed.

Industrial competition was between Industrial centers in Europe and the United States into the Chinese market to maintain local operations. During this period, exports were important. Yee & Storey (2013) indicate that during economic competition, the basis for low cost manufacturing is to operate at full production. However, the output was deemed greater that consumption by the American market.

Foreign markets were the only feasible locations for the disposal of surplus goods. This outlook was credited by the two decades of economic troubles that overwhelmed the United States at the later quarter of the last century. Various administrations in the North American economic giant have seen that exports only can save the United States economy with a limited potential for growth.

This is the reason that the country has emphasized on China. However, the current China is not concerned about trade but investment. It is not only a market but also the largest production center in the world.

This is whereby the local needs are served by home factories. Meanwhile, the rivalry between international firms is not the same as with local industries. The companies base the rivalry on establishment of industries in times of low costs (Yee & Storey, 2013).

The interaction of changes in the status of China and change in commercial orientation leads to the current scenario. At the start of the 20th century, the country had a fragile government. At the start of the 21st century, the country has the sturdiest administration in the region with regard to its power.

Beijing will manipulate the foreigners in corporate matters and use the wealth in the expansion of influence and strength to dominate political matters in Asia and beyond. China will embark on the strategy because the major element is that the country has not changed in a century. The location of industrial centers determines material balance between national bodies.

The stance of China is formidable. The country has the largest population of hardworking people, large capital inflows, considerable resources, and a fascist regime that guides its operations. This regime guides the manner in which trade is conducted (Menges, 2005).

Menges (2005) reveals that the associations between the United States and China, particularly on trade and industry issues, have been of foremost spotlight recently. The current United States’ government complained to the WTO that the Asian economic giant had made unlawful promotion of motor vehicle exports. This move undercut suppliers from the United States.

Several of the key players typified the occasioning of this complaint as being politically engineered. In the light of this, most Americans thought that the 2012 elections would bring genuine changes to the relationship between the two economic giants. Obama’s competitor, Mitt Romney, who was the Republican candidate, had offered to take an aggressive position toward China.

He has also promised to label the Asian nation a monetary manipulator and strike China’s exports to the country with numerous tariffs. Onlookers deemed his plans a formula for a trade confrontation between the two trade and industry giants.


In summary, the meteoric rise of China as an economic giant because of its economic growth coupled by an open door policy adopted by the regime has presented various countries with trading and investment opportunities. However, the political complexion and size of the country alongside its rate of economic growth have made it a potential threat for numerous countries.

As the expansion of economy continues in China there is an increase in potential benefits and threats of China’s phenomenal development by a number of countries. Japan and the United States are the most threatened by the rise of China as an economic giant.


Häuslein, K. (2010 ). Is China an economic threat or boon to European trade? Munich: GRIN Verlag.

Menges, C. (2005). China: The Gathering Threat: The Gathering Threat. Nashville: Thomas Nelson Inc.

Peerenboom, R. P. (2007). China Modernizes: Threat to the West Or Model for the Rest? Oxford: Oxford University Press.

Ravenhill, J. (2006). Is China an Economic Threat to Southeast Asia? Asian Survey, 46 (5), 653-674.

Steinfeld, E. S. (2010). Playing Our Game: Why China’s Rise Doesn’t Threaten the West. Oxford: Oxford University Press.

Summers, L. (2012). China: Imposing economic threat or unprecedented growth opportunity? Journal of Policy Modeling, 34 (4), 529–532.

Yee, H., & Storey, I. (2013). China Threat: Perceptions Myths. London: Routledge.

This assessment on China as an Economic Threat was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Assessment sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

certified writers online

Cite This paper

Select a website referencing style:


IvyPanda. (2019, December 12). China as an Economic Threat. Retrieved from https://ivypanda.com/essays/china-as-an-economic-threat-assessment/

Work Cited

"China as an Economic Threat." IvyPanda, 12 Dec. 2019, ivypanda.com/essays/china-as-an-economic-threat-assessment/.

1. IvyPanda. "China as an Economic Threat." December 12, 2019. https://ivypanda.com/essays/china-as-an-economic-threat-assessment/.


IvyPanda. "China as an Economic Threat." December 12, 2019. https://ivypanda.com/essays/china-as-an-economic-threat-assessment/.


IvyPanda. 2019. "China as an Economic Threat." December 12, 2019. https://ivypanda.com/essays/china-as-an-economic-threat-assessment/.


IvyPanda. (2019) 'China as an Economic Threat'. 12 December.

More related papers
Psst... Stuck with your
assignment? 😱
Psst... Stuck with your assignment? 😱
Do you need an essay to be done?
What type of assignment 📝 do you need?
How many pages (words) do you need? Let's see if we can help you!