Professor discusses Chinese economy, relationship to U.S.
Caitlin Housley | Monday, January 23, 2012
Though the Chinese economy has grown in recent years, causing some fear that China will threaten America’s economy, a Saint Mary’s professor said China’s growth should be viewed in a more positive light.
Richard Measell, professor of Business and Economics, said China has recently surpassed both Japan and Germany to become the second largest economy in the world, increasing growth around 10 percent annually.
“China, before the 1980s, was a really poor country,” he said. “[About that same time,] they put in more of a free market economy with less government control, and they let free enterprise flourish in some areas. From that, they have really grown. They’ve really had three decades of very strong economic growth. “
Measell called the feat “remarkable.”
“It’s not unusual that underdeveloped countries would have pretty good growth patterns,” he said. “But for China to do it for so long, and for the growth to be so strong each time, it’s quite remarkable.”
But Measell said some critics, especially in the United States, find China’s growth threatening.
“China gets picked on a lot by politicians,” he said. “Campaigning, they say, ‘Our jobs are going to China and our younger generation is going to owe all this money to them.’ So, [China is cast] in a villain-type way.”
Skeptics worry that as the economy in China increases and the United States economy struggles, more jobs will be outsourced overseas, but Measell said there are benefits to China’s economic increase.
“[Americans] benefit a lot [from the growth] because we get relatively lower-cost items,” he said. “It’s sort of a win-lose thing. Consumers win because they get lower-cost items made in China, but then the workers in the United States who could be making those items, or who might have in the past, well, those jobs aren’t here and those goods are made in China instead. “
Measell said Americans must come to terms with this reality and view the situation in a positive light. While some jobs are being lost, others are being created.
“On the one side, the production for American companies is overseas, and that helps China, but those companies need other people to be [in America] to sell the items, and run the company,” he said. “So that creates jobs here.”
Additionally, Measell said when China’s economy is strong, it encourages consumers to buy more American luxury goods or goods from Europe, helping to aid both struggling economies.
Measell said critics also worry that this strong economy will encourage China to reconsider helping America with its national debt.
“China has about 8 percent of our national debt, and [critics are] always concerned about whether China will keep on lending us money because we have a big budget deficit problem … and it seems like China has been a little bit more cautious about that,” Measell said. “But we’ll have to see how that goes.”
With such success for so long, others worry China will see an economic crisis similar to Japan’s in the 1990s. Measell said he hopes this will not be the case, not just for America’s benefit, but also for the world’s.
“I’m hoping this will be another good year for China, and for people to realize that that’s a good thing for Americans,” he said. “Even though China’s economy is the second largest in the world, compared to the whole world, it’s still relatively small. If China does well, they’ll help out the rest of the world. They’ve been a positive force that way.”