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case study: China (1 Viewer)

Joshmosh2

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Mar 30, 2014
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2015
Question:
"Analyse the importance of :
-international trade
-foreign direct investment

in China's economic development"

I am struggling to link the statistics I have (such as increases in exports/imports etc.) on how those factors are important in China's economic development.
 

RivalryofTroll

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There are many ways to approach this.

One approach is to spend 1 body paragraph (perhaps after your essay's introduction) to establish the correlation between Economic Growth (which is fueled by China's international trade and FDI) and Economic Development.

Economic growth - concerned with the increase in output (the value of goods and services produced) over a period of time and is measured by GDP (whereby GDP growth can be associated with GNI per capita growth as well).

Economic development - indicators of health, education, environmental quality and material living standards and is measured by HDI.

Irrespective of their differences, increased economic development is generally correlated with higher levels of growth because increased levels of Gross National Income (GNI), due to higher economic growth, results in improved living standards.

(Mainly because higher GNI per capita --> higher ''material'' living standards, more government expenditure for welfare, etc.)

After establishing such correlation, you can simply use your statistics and economic theory (e.g. AD = C + I + G + (X-M), whereby X-M is relevant to trade and I is relevant to investment and even, FDI) to illustrate how:

China's export driven model/approach to international trade promotes economic growth which, in turn, improves the level of economic development. Similar case for FDI.

(increase in net exports (X - M) --> increase in AD --> increase in economic growth/GNI per capita --> increase in economic development)
(Similarly... increase in FDI (I) --> increase in AD --> increase in growth/GNI per capita --> increase in development)
 

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