Question

1.how did the ride of china in terms of economic power provide an alternative to the western capitalism ?

2. how did economic problems provoke the wave of unrest in tunisia ,egypt and libya and eventually lead to nationalism policy in europ and the U.S ?

Answer 1

Question 1 ans :- First we get to know economic power, then we will see how China became economic power and gave Western capitalism an alternative form.

Economic power is the ability of countries, businesses, or individuals to improve their standard of living. ... Countries, companies, and individuals can acquire economic power by improving their income, thereby adding to their wealth. That allows them to purchase more and better goods and services to meet their needs.

China's transition from a planned economy to a socialist market economy has often been compared with economies in Eastern Europe that are undergoing a similar transition. China's performance has been praised for avoiding the major shocks and inflation that plagued the Eastern Bloc.The Eastern bloc economies saw declines of 13% to 65% in GDP at the beginning of reforms, while Chinese growth has been very strong since the beginning of reform. China also managed to avoid the hyperinflation of 200 to 1,000% that Eastern Europe experienced.This success is attributed to the gradualist and decentralized approach of the Chinese government, which allowed market institutions to develop to the point where they could replace state planning. This contrasts with the "big bang" approach of Eastern Europe, where the state-owned sector was rapidly privatized with employee buyouts, but retained much of the earlier, inefficient management.Other factors thought to account for the differences are the greater urbanization of the CIS economies and differences in social welfare and other institutions.Another argument is that, in the Eastern European economies, political change is sometimes seen to have made gradualist reforms impossible, so the shocks and inflation were unavoidable.

China's economic growth has been compared with other developing countries, such as Brazil, Mexico, and India. GDP growth in China outstrips all other developing countries, with only India after 1990 coming close to China's experience. Scholars believe that high rates of investments, especially increases in capital invested per worker, have contributed to China's superior economic performance. China's relatively free economy, with less government intervention and regulation, is cited by scholars as an important factor in China's superior performance compared to other developing countries.

At the same time, we get to know Western Capitalism so that it will be clear how China showed Western capitalism the way of alternative economic power.

Capitalism, also called free market economy or free enterprise economy, economic system, dominant in the Western world since the breakup of feudalism, in which most means of production are privately owned and production is guided and income distributed largely through the operation of markets.

China's economy produced $25.3 trillion in 2018, according to the International Monetary Fund. That's based on purchasing power parity which takes into account the effect of exchange rates. That makes it the best method for comparing gross domestic product by country.

It  also makes China the world's largest economy. The European Union is second, at $22 trillion. The United States is third, producing $20.5 trillion.

China has 1.38 billion people, more than any other country in the world. China is still a relatively poor country in terms of its standard of living. Its economy only produces $18,120 per person. In comparison, the U.S. gross domestic product per capita is $62,518.

China's low standard of living allows companies located there to pay their workers less than American workers. That makes products cheaper, which lures overseas manufacturers to outsource jobs to China. They then ship the finished goods to the United States, China’s largest trading partner.

How China Affects the U.S. Economy

China is the second-largest foreign holder of U.S. Treasurys. In Dec. 2019, it owned $1.07 trillion in Treasurys. That's 16% of the public debt held by foreign countries. The U.S. debt to China is lower than the record high of $1.3 trillion held in November 2013.

China buys U.S. debt to support the value of the dollar. This is because China pegs its currency, the yuan, to the U.S. dollar. It devalues the currency when needed to keep its export prices competitive.

China's role as America's largest banker gives it leverage. For example, China threatens to sell part of its holdings whenever the United States pressures it to raise the yuan's value. Since 2005, China raised the yuan's value by 33% against the dollar. Between 2014 and 2016, the dollar's strength increased by 25%. The rise forced China to devalue the yuan. This ensured its exports would remain competitively priced with those from Asian countries that hadn't tied their currency to the dollar.