How Does China's Economy Affect The US Economy

The U.S imports nineteen percent of all its goods from China. China has one of the lowest minimum wages in the entire world. A non-skilled labor worker that works in a factory might only make 100 dollars a month. This raises a valid question on how does China’s economy affect the U.S economy? How does a person survive in these conditions? The answer is in the Government. China is a capitalist economy which was able to integrate itself into the World market. China’s economy overall has a lower cost for everything. Goods and services are cheaper making the standard price for living low. This causes China to be able to pay workers a lower wage than the U.S. This internal structure of cheap labor causes China to produce cheap goods. Producing cheap

Many of Chinas goods listed are exported right here to the U.S. So how does China’s cheap labor affect the U.S? U.S imports most of China’s goods to be sold here. Importing all these goods means U.S is not making these goods itself. Years ago, the U.S produced most of its own goods, people were working and there was a demand for people. Today, importing these goods leads to fewer jobs in the U.S and companies in the U.S have a hard time competing with the prices offered by China. The social structure in the U.S is much different than China. For instance, U.S has a minimum wage and certain standards of living. This social structure does not allow the U.S to compete with China’s goods prices. This has not just affected one area of the U.S either. It is extensive; the whole U.S is affected. The velocity of this flow of goods has increased dramatically over the past 50 years. Also, this flow is not one-directional, it is multidirectional affecting many other places as well. This flow of goods causes the U.S to spend billions of dollars in goods from overseas and it is hard for U.S companies to gain any momentum to get goods to be produced here. Hopefully this flow can be changed to aid U.S to import but also create its own goods and be able to sell both at a reasonable

Up until about the 1990’s, China was mostly rural farms scattered throughout the country. China had a major reform then. Before that though in the rural regions, the labor force was governed under the people’s communes who received production targets from the planning authorities and delivered products at state-decided low prices. This did not leave the market much opportunity for growth. With the famine in 1959, China realized that rural was not the type of market that would sustain its economy. So the government decided that they would install reforms that would cause people to move to non- rural areas and start private enterprises and urban collectives. The government had to establish laws and regulations for these companies because the government didn’t want a total free enterprise system. Even before the reform government agencies regulated crop