Many investors consider China as a key player in forex, which is essential due to the importance of China and its economy of $3.98 trillion daily trades. One absolutely needs to know when to panic if China panics. So let’s go over the following few facts worth knowing about this great nation.
Not only does the Chinese civilization date back 4,000 years, but it represents over 20% of the earth’s population, with a major presence in the world’s commerce, production and exports. These factors make China one of traders main focuses, especially seeing that China could be named as a potential competitor of the US, but not just yet.
The Chinese economy has suffered many failures on their long-run towards development and evolution, in spite of all the efforts invested by the country to join the most powerful economies and to ensure a front row seat. China has done well and ranks among one of the fastest developing countries worldwide, with records broken and several miracles that have made China a legend and a story to be told to future generations.
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But what makes China and the Chinese economy important? And how did China get to this point?
- China is the 4th largest country in the world with 9,596,960 SQ of land, a shoreline of 14,500 KM making it the world’s 10th largest shoreline, and a miraculous combination of geography.
- Even though led by a communist party, the Chinese have shown huge appreciation and an open-mindedness to the world and to international exchange.
- The huge population and cheap labor made China a destination for international companies from around the world to settle, produce and export around the globe.
- China is one of the few countries that has placed its main effort to join the world trade leaders, yet at the same time conserving their traditions and customs. Currently, China is one of the most favorite tourist destinations due to its long history and success in preserving their civilization and heritage.
- China has succeeded to increase literacy to 86% of the population, a high percentage compared to post-World War II.
- China’s emphasis on a socialist economy began in 1984. China has never ceased to support and invest in achieving growth, regardless of the pressures the government went through, making the socialist economy a dream China had to achieve.
- Even though it has kept to the communist style, China has managed to assure foreign investors and gain their confidence, something the largest democracies in the world could not guarantee.
- “Made in China” has spread widely as China’s low cost attracted the biggest companies worldwide to settle and produce. China has demonstrated cooperation with foreign investors by making their day to day operation smoother.
- The standard of living of Chinese citizens has improved thanks to their government’s continuous effort to evolve from a communist government into the government of the people.
- Natural disasters such as earthquakes have not stood in the way of foreign investors thanks to the government’s quick response and support. China has suffered the biggest disasters worldwide, but still continues to improve.
- The Chinese products, or products made in China, reach over 50% of our life’s daily supplies.
- China heads the list of countries in export volumes followed by the EU and the USA, yet ranks 3rd after the USA and the EU. China’s GDP is considered to be around USD 400 Billion (2014) representing 16.70% of the world’s economy.
- China has managed to increase foreign investment within its borders by creating tax exemptions and increased foreign investor benefits.
All these factors, and many more, make China a powerful tool and a cause for trader concern. This year started out with the Greek crisis and seems to be continuing with the anxiety over China, making 2015 a year of panic and action.
Greece was on yesterday’s list and China is on today’s, making investors around the world wonder, who is next?