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Economic Crisis in the USA Essay


With regards to the topic considered in this study, the research focuses on the economic crisis facing USA amidst the foreign forces caused by the major economic competitors. Essentially, USA has been the biggest world economy for a substantial amount of time. However, the country is incurring crucial economic crisis which may deconstruct its stability in the near future. Whereas this situation is prevailing, most of the citizens are not aware because it cannot be observed openly or easily (Dimitriou & Simos, 2013).

Additionally, it has become very difficult for the citizens to understand the current situation and adopt ways of lives that may help the country out of this situation. Importantly, when the country maintains its position as the superpower, it has been established that the country has transformed negatively into a second-class country with regards to a number of aspects. A close analysis of the economic position indicates that the country is importing more goods and services than the total national exports made to other countries.

Additionally, it has been noted that USA is selling its assets and increasing the debts in order to maintain the status quo in terms of the living standards and other sectors of development. As such, it is clear that the country cannot sustain the standards that have been prevalent for the last few decades. As such, it is evident that the selling of assets, increasing debts, and adding the importations were not the core aspects that made the country a superpower. However, it is the surest way of lobbing off the status from USA to become a dependent nation (Dodek, 2011).

When focusing on the international arena and the competition it poses to USA, they plan to make the country dependent of their products, innovational capabilities, and financial assistance among other aspects centered in the respective countries. Importantly, the loss of financial self-reliance and the increasing challenges in the national security are long term ingredients of losing the superpower status as well as economic competence. Accordingly, it is crucial to focus on these crises in order to determine the future position of this country in relation to the competitors. The determination that will be made with regard to the findings will play a major role to offer solution and turnaround strategy for the country.

General to Specific Problem

From a general view, the economic future of USA and its status is at stake due to the rising competition launched by its main rivals. In essence, USA is becoming increasingly incapacitated to sustains its domestic sustenance and sufficiency. In perspective, the main competitors have embarked on a tactical approach to provide products and services in USA while the domestic businesses run out of competence. Due to the low prices provided by the competitors, the people of USA have submitted to consuming the products and disregarding the ones produced in the country domestically.

Specifically, China has posed a fundamentally critical challenge to the economic proficiency of USA. It has been using legal, illegal as well as effective means to combat the USA’s economy with the aim of bringing the American system to its knees. To substantial extent, China has been able to threaten the USA’s economic competence by the use of currency manipulation and allowance of sweat shops to provide cheap labor that in turn reduces the price of their goods.

As such, the future of USA economically is in the hands of the Chinese if the government and the business owners will not provide a solution to the bombes launched against the country. Since the economic future is at stake, this research focuses on how the Chinese are attacking the economy of USA in order to provide the basis of developing solutions. These solutions are essential strategies that can help USA regain its innovative capability, production, and counter the Chinese in their competitive pursuit against the country.

Aim and Objectives

The aim of a research study is seen as the general objective sought by the research in relation to the topic of interest. On the other hand, the objectives are subsets of the aim since they seek to achieve the aim stipulated by the researcher. As such, the aim of this research is to determine the economic future of USA with regards to the Chinese competition in order to offer futuristic solutions to the predicted afflictions.

As such, from the background and the problem statement provided, there are three research objectives pertinent to this research study. These research objectives are meant to fulfill the research aim as the general focus of the research.

  1. To explore the ways in which China has positioned itself economically in the global arena.
  2. To evaluate how the economic strategies used by China to position it globally has affected the economy of USA over the last one decade.
  3. To identify and propose strategies that can be employed to counter the Chinese pursuit.

Research Questions

In accordance to the objectives set in the previous paragraph, it is evident that the aim of the research will be fulfilled by answering three research questions.

  1. What strategies are used by China to position itself economically in the global arena?
  2. How has the economic strategies used by China affected the USA’s economy over the last one decade?
  3. What retaliatory strategies can be employed by USA to combat the Chinese in their pursuit to control the global economy?


Hypothetically, USA will be surpassed by China economically if the latter does not turn around and stop the attacks launched against it by the former country. Although the research has not been conducted, the hypothetical stipulation of this research seek to indicate that the manipulation of currency by the Chinese, production of cheap products, and the massive production are some of the strategies used by China to combat the economic prowess of USA.

With regards to the second question, it is hypothetical that the manipulation of currency and reduction of regulations in China enable the country to lob USA off investors and increase its exports. Lastly, it is difficult to reiterate against some of the strategies that have been used by China in its pursuit because they are deeply rooted in the global arena especially when it comes to the production of cheap goods. However, substantial war should be put against the Chinese people in order to ensure that the economy of USA remains stable and self-sufficient.


In accordance to the problem identified in the previous paragraph and the issues raised in the background of this study, it is evident that USA requires to conceive a turnaround strategy for the economic recovery. By way of the rationale behind this research, it is purposely important to conduct it in order to provide a solution.

Literature review

Exportations versus Importations

Dimitriou & Simos (2013) suggested that USA engages in active importation of products and services while the exportations have reduced drastically in relation to China. Clearly, the Chinese have embarked on mass production of quality as well as substandard goods and services. The mass production has led to a scenario in which the Chinese investors have dominated the market.

They are capable of providing products and services in accordance to the economic ability of the consumers. As such, the price-oriented and massive production has increased the number of customers seeking the Chinese products globally. For example, African nations, such as Nigeria, Kenya, Rwanda, and Tanzania among others have sought refuge to China since they can afford services for infrastructural construction at affordable prices.

In addition to this scenario, the author revealed that USA is selling most of its economic assets and securing loans that increase the debts for the country. As such, these debts are used to sustain the standards of living in the country which do not hold any longer. As a result, China has been able to incapacitate the country in terms of financial dependency, domestic sufficiency, and the expenditure especially when it comes to maintaining security. On the other hand, China is developing and building a first-class economy based on proficient ICT capability, innovative ability, and financial prowess as country. This implies that China is increasingly becoming stable while the latter is diminishing. As such, the Chinese have employed crucial strategies, including the innovation and monetary independence to combat the USA’s economy.

Manipulation of Currency

Dodek (2011) stated that the manipulation of currency in China has been one of the most crucial topics around the world. It has evoked heating debates as to whether the acts are legal and fair to the global arena or not. In essence, the Chinese have maintained the currency at low exchange rates claiming that the decision was made to improve the welfare of the Chinese citizens. However, the regulation is intended to manipulate funds in order to make it difficult for the American investors to export goods to China.

On the other hand, it makes the exportation of goods from China to USA cheap. Furthermore, the regulation of the currency has allowed the Chinese investors to produce goods at low costs. This condition has enabled the investors to reduce the prices of goods exported to USA. As a result, the Chinese goods found in USA are of lower prices than the ones produced in the country. This has made it difficult for the USA investors and industries to get domestic and international markets. As a result, most of the investors opt to close their industries in USA and move to China where the cost of production is low. This has seen USA loosing many investors to China and reducing the economic competence of the country.

Use of Forced Labor in China

To (2003) indicated that President Bill Clinton signed an agreement with the Chinese government to the effect that industries and investors must follow some specifies practices when doing businesses. This agreement was meant to facilitate peaceful and mutually beneficial business relations between the two countries. However, China has defied this agreement and embarked on disregarding the aspects of this agreement. One of those agreements directed the two countries to adhere to democratic standards when producing goods and services. Importantly, it advocated for good working conditions and salaries.

However, the Chinese industries work under minimum surveillance with regards to whether child labor is used or not. For example, there have been strikes organized by USA’s university students against the Nike Company which was using child Labor and sweatshops to produce cheap products to acquire competitive advantage. On the other hand, USA is diligent about the standard of workers, including the house helps and other casual employments. Due to adherence to standards, the country uses a lot of capital during production and the prices are therefore rendered high. In that scenario, the Chinese products get a competitive advantage over the USA’s products which are more costly than the latter’s commodities.

Control of Trade Deficits

Chinta and Capar (2007) stated that the retrogressive economic trend in USA has been caused by some self-inducing actions and decision made by the policy makers. Importantly, the tax system employed in USA has led to increasing cost of doing business. As a result, investors are incurring high cost worth of taxation by USA. This implies that the good produced in the country are deemed to surpass the ones made in China. As a result, the goods from USA get minimal market while the ones originating from China have a vast market. This implies that foreign and domestic investors prefer China to USA in terms to investments. The negative policies are leading to an imbalance in the trade realm with regards to the two countries.

Domestic Sustenance and Access to Markets

The production in USA cannot sustain the domestic market in the country due to under manufacturing and loss of investors. As a result, the individual citizens and the government have to rely on the importation to sustain the consumption required by the country. In that regard, the country lack competitive edge in terms of the production required for the sustenance of the country. In addition, the access of market from a comparative perspective does not favor the USA current economic system. In essence, USA has allowed open access to the market without considering the standards of manufacturers.

For example, the Chinese are not scrutinized on the standards of production and environmental fitness. As a result, they are able to export goods that do not adhere to the standards to USA and hence wipe out the products produced in USA. On the other hand, the access to Chinese markets if being affected by the manipulation of currency and thus imbalance exists between the two states. Besides the lack of access to Chinese markets, China has acquired all markets in the third world country.

This implies that USA has a very little market share in the third world countries. In addition to this, China has portrayed political neutrality that enables it to avoid confrontations with USA and the third world countries. As a result, the countries prefer China to USA when making business agreements because it is not perceive to have political biasness. Consequently, China can access many markets around the world as opposed to USA from an eco-political angle.

Method Section

Data Collection

Data will be collected in two different ways in order to ensure that the research objectives are answered completely. First, secondary research will be conducted to review the available literature that discussed the plight of USA’s economy in the hands of China. As such, literature will be reviewed in terms of the three objectives to determine the existing researches relating to the economic relations between China and USA. After the review is conducted, critical implications will be made in order to predict the future position and unfolding that will befall the country.

Second, primary research will be conducted in order to determine the various scenarios on the ground. In essence, this part of the research will be very crucial because it will reinforce the secondary research by revealing how the issues raised in the latter are manifested in the real situation. Indeed, the collection of data will involve interviewing respondents who are pertinent to the research topic.

As such, the respondents must be viewed as some of the personnel who have the relevant knowledge and business experience with regards to business relations discussed in this study. Particularly, the interviews will be conducted using the questionnaires which will comprise of questions seeking to obtain information about exportation, investments, and the strategies that can help USA to combat China in its pursuit to surpass its rival.

Target Population

In both the secondary and primary researches, the target population will include the investors and consumers from China and USA. The investors are expected to provide relevant information about the investments experience they have in both countries. The experience will be regarded in terms of the cost of production, standards of doing business, the prices, and the market share controlled by the industries. In essence, this information is sought to show the direction taken by both countries when it comes to the investments and business strategies.

Secondly, consumers will be interviewed across the country in order to study the prevalence as well as the nature of both Chinese and American products. In that case, the information interviews will seek information concerning the availability of good provided by both countries bearing in mind that the sufficiency of production is a critical variable in this research study. In addition, they will be expected to provide information about the quality of products provided by the manufacturers from both countries. This will provide a crucial basis of determining the steps that USA should take in order to control the entry of goods and services in the country.

In case some respondents from China or economic analysts will be available, information concerning the working conditions and standards maintained in China will be sought. As such, this information is very crucial because the hypothesis has indicated that the standards of production are the central factors of economic imbalance. Essentially, it was indicated that the Chinese are using cheap and forced labor in order to get competitive advantage over USA. Most importantly, all respondents will be expected to provide suggestions that can be implemented by the policymakers in order to ensure that USA makes a turnaround. Although the common citizens are not expected to give science-laden suggestions, the analysis will be meant to determine whether such opinions are valid or not.

Sample and Sampling

Since the population is large, sampling is very important to ensure that the research study if realistic in terms of expenditure and time required for completion. The sample will comprise of 25 investors from different sectors, including banking, agriculture, and motor production among other as well as 52 citizens to represent all the states in USA. In addition, 3 economic analysts will be consulted to provide information concerning the comparative performance of both countries and suggest some solutions.

Sampling will be conducted using the random purposive method that incorporate two different techniques and hence regarded as a very effective venture. The random aspect ensures that the respondents are chosen without the pursuit of getting predetermined results. As such, it ensures there is no biasness in the results obtained from the study. The second aspect of purposefulness ensures that the sample is chosen to include people with the required information.


Analysis will be conducted qualitatively in such a manner that the opinions provided by the respondents will be assessed in terms of the theoretical framework and the philosophy of interpretivism. The theoretical framework will contain theories regarding the international business relations. These theories and concepts will be used to analyze the suggestion and observations of the respondents in order to determine whether they have any scientific validity. The philosophy of interpretivism allows researchers to make conclusions from value-laden information as opposed to positivism that only advocate the use of quantitative deductions (Babu, 2013).

Research Approach

This research study will employ a deductive research approach in the attempt to analyze data and make conclusion. In this approach, a hypothetical stipulation is developed, as it was described in the hypothesis, data is collected, and the analysis is conducted to determine whether the hypothesis is accepted or rejected (Berg, 2009). In particular, it was hypothesized that the future of USA’s economy is at stake due to the increasingly innovative competition launched by China. If the qualitative data collected indicate this finding, the hypothesis will be accepted as the result.

Research Design

With regards to this aspect of the study, an exploratory research design will be used in order to make the required determinations. The exploratory design is based on the fact that the research sets out to find out the reasons as to why certain phenomena occur (Collis & Hussey, 2009). In this research, the research seeks to determine the future of USA’s economy in relation to the competition posed by China. This implies that it seeks to bring new depth of intellect and hence can be considered as explorative in terms of the design.

Expected Conclusion

Use of Qualitative Versus Quantitative Techniques

When analyzing the use of these techniques, their weaknesses will not be assessed in general terms but it will be contextualized. Qualitative technique of analyzing data is highly regards with regards to the fulfillment of the stipulated objectives. A close evaluation of the objectives shows that all the information sought is qualitative in nature because it aims to determine the strategies used by China in economic development, how USA is affected by these aspects, and the counter-strategies that can be employed to recover. Indeed, these objectives do not call for the collection of quantitative data that can be analyzed to give useful result. Consequently, quantitative analysis is not fit for this research study according to its nature.

The chart below shows the research philosophies that revolve around this research as discussed in a previous paragraph. Objectively, the critical and interpretive philosophies will be used while the positivistic approach is disregarded.

Qualitative research

Mixed, Primary and Secondary Research

The application of mixed method was chosen to help in the accomplishment of this research study. The use of primary research allows the collection of first hand data (Creswell, 2009). However, the fact that this data is first-hand does not imply that it has scientific validity. As a result, the secondary research becomes important to show the previous studies that have been conducted scientifically in relation to the topic of interest.

Nonetheless, the studies might not lead to accurate result because the economic world is dynamic and factors of business keep on changing. As a result, the mixed methodology kicks in to ensure that the research makes credible findings. In essence, it ensures that there is first-hand data that is accurate to the present condition is American and Chinese economies. Additionally, it facilitates the collection of scientific precedence that was set by previous researches in relation to the same topic.

Physical and Emailed Interviews

When it comes to the issues of administering the interviews, the respondents can be questioned physically or by use of emailed survey. Indeed, the physical interview is considered as the most effective technique because it enables the researchers and respondents to seek clarification from each other (Denscombe, 2009). However, they are costly because they increase the cost of doing the research. As such, the method can lead to ultimate failure of the research due to incompleteness occasioned by the lack of enough funds.

On the other hand, the emailed are very timely and efficient because they require little involvement in transport. As a result, the respondents use negligible amounts of funds and hence facilitate successful completion. However, they do not enable the two parties to interact and seek necessary clarifications. Most of the research studies follow the emailed surveys because they are more convenient in terms of time and funds. Understandably, funds and time are the critical factors to consider when deciding the techniques to use in the research.


Babu, G. (2013). Kesar Singha Contributions to Statistical Methodology. Statistical Methodology, 3, 345-413.

Berg, B. L. (2009). Qualitative Research Methods for the Social Sciences. Boston: Allyn & Bacon.

Chinta, R., & Capar, N. (2007). Comparative Analysis of Managerial Values in the USA and China. Journal of Technology Management in China, 2(3), 212-224.

Collis, J., & Hussey, R. (2009). Business Research for Practical Guide for Undergraduate & Postgraduate Students. Basingstoke: Palgrave Macmillan.

Creswell, J. W. (2009). Research design: qualitative, quantitative, and mixed methods approaches (3rd ed.). Los Angeles: Sage Publications.

Denscombe, M. (2009). Ground Rules for Social Research Guidelines for Good Practice. (2nd ed.). Maidenhead: McGraw Hill International Ltd..

Dimitriou, D., & Simos, T. (2013). Contagion Channels of the USA Subprime Financial Crisis per Evidence from USA, EMU, China and Japan equity markets. Journal of Financial Economic Policy, 5(1), 61-71.

Dodek, A. (2011). Reports from Correspondents in Canada, Europe, UK, China, USA and Australia. Legal Ethics, 14(2), 239-259.

To, L. (2003). China, the USA and the South China Sea Conflicts. Security Dialogue, 6, 25-39.

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