How the rise of China has hurt the US economy Research Paper

How the rise of China has hurt the US saving - Research Paper ExampleHowever, there are fears for the US economy that Chinas economic growth may beset the Statess economy.Over time, China has accumulated trillions of American dollars of currency reserves. Out of these reserves, active 800 billion US dollars are treasury bonds. This development is a culmination of escalating balance of trade surpluses that China has had with America, since China sells to the US much more than America can sell to China. In the course of this development, China has played the instrumental role of elbowing many American manufacturers out of business (Clark and Monk, 99-100)According to Liang, with the crowing stockpile of money mentioned above and the leverage this stockpile gives China, China is now threatening to dump the US treasury bonds and the American dollar on the market. The crux of the matter herein is that in the event that China executes this move, Americas currency will capture been sig nificantly devalued and the price of goods will skyrocket. This mover that Americas economy will have been crippled. Although China has never made good this threat, yet the fact that it made this threat reveals its possibility. This situation has been gradually building up and it therefore continues to place America in a precarious position. This is because America has been producing less and has continued to increasingly survive on imports (Liang, 54).Mundell contends that a very strong way in which Chinas growing economy continues to undermine Americas economy is by blocking US exports. What informs this decision by China is the fact that the Peoples Republic of China reserves the largest part of its market strictly for state-owned businesses. The Beijing Administration demands that state-owned organizations have dominance domestic markets in railways, coal, telecom and other areas of key strategic interests. This means that these firms are immune from