Rising commodity price

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As a result, Western nations are almost entirely dependent on China for their goods. We are now at a point where China can dictate their terms and their prices to the West, confident in the knowledge that Western nations are almost completely reliant on Chinese imports for their goods. The newly developing markets in other Asian nations like Thailand and Indonesia are challenging China’s theoretical monopoly, but there can be no doubt that the rise of China has been bad for Europe and the UK.

However, the fact that UK workers are losing their jobs to China is largely going to benefit in the UK economy in the long run. This is because it will act as an incentive for British worker to work harder or to invest in training courses to improve their productivity rate. In addition, China is attracting many firms because of it high productivity rate. UK workers need to work harder and faster to compete against China.

In addition, no country in history has ever emerged as a major industrial power without creating a legacy of environmental damage that can take decades and a huge sum of money to undo. Environmental degradation is now so severe, with such stark domestic and international repercussions, that pollution poses not only a major long-term burden on the Chinese public but also an acute political challenge for the UN and all other organisations involved in reducing Global Warming. ”

China is choking on its own success”, seems to be the common slogan among environmentalists concerned with the ever growing situation. It has been evident that Chinese cities have been swarmed in toxic grey clouds and it is said that only 1% of the country’s 560 million city dwellers breathe air considered safe by the EU. Indeed the situation can be a cause for concern for Britain because with an increase in heavy pollution from china, the world heats up faster due to the greenhouse gas effect, thus causing rising sea levels through thermal expansion and melting ice caps.

In conclusion, I believe that the balance between the advantages and the disadvantages that the rise of china possesses is tipped more towards a brighter future for the UK and Europe. Although there will sure be more job losses through structural unemployment as Chinese manufacturing firms undercut our cheaply produced goods. And it is no surprise to anyone that as affluence increases in BRIC countries, especially so in India and China, commodity prices such as food, oil, coal and metals will be due to increase as cheap rice in Asia will no longer serve as a suitable staple food for the mass population with higher average incomes and a higher disposable income.

Not only will it be problematic to the UK but for the whole world as cost-push inflation will force prices up, this is so because the cost of production for manufacturing firms will increase with higher commodity prices. However, the potential benefits that the UK can reap from rising china are subject to a number of constraints, the current argument assumes that there are no trade barriers between the UK and china. If there were any in place, such as “Quotas” as there have been in the past then china will not sell as much to our markets, instead other countries that carry out a free trade policy will reap the benefits of cheaper prices and more consumer choice. And we can also ask whether the 10% growth rate is sustainable?

Rising commodity price force up costs of production so will Chinese produce be as equally cost effective in the future as they are today? In addition the sustainability can be questioned as the Chinese government do not have suitable supply-side policies in place, at the moment about 20% of the Chinese work force is aged between 20 – 30 as the Chinese government had issued a one-child-per-family policy to try and combat the population crises. It is no doubt that China is at the top of the world league table of an aging population. With the addition of growing powers of trade unions in china, all these issues can have a large impact on China’s productivity in the future, impacts which may cause less demand for Chinese goods, therefore, less of a positive impact for the UK.

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