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Assignment-1
Please readCase 4: “Will China Continue to Be a Growth Marketplace?” available in your textbook, and answer the following questions:
- Assignment Questions:
- Will China maintain its strong economic growth in the years to come? Some suggest it will until 2050. What do you think?
- If China will go from 17 million to 200 million middle- and upper-income people by the early 2020s, would the scenario presented by Best Buy not be applicable anymore? Would newly rich Chinese customers engage in this purchasing in the 2020s?
- With Alibaba’s ownership of the very popular Tmall and Taobao online shopping systems (similar to eBay and Amazon) and its spread across the world, will a Western-based online shopping culture ultimately infiltrate China?
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Explanation & Answer
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Running head: CHINA’S MARKETPLACE GROWTH
China’s Marketplace Growth
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CHINA’S MARKETPLACE GROWTH
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China is capable of maintaining a strong economic growth moment beyond 2050 as
predicted by some experts. It is evident that China’s economy China’s economy is on an upward
trend. Statistics from PwC report projects that by 2050, China will be behind 20% of the global
economy, followed by India and the United States at 15% and 12% respectively. The report by
PwC highlights that China is the leading economy based on purchasing power parity (PPP). The
International Monetary Fund (IMF) has acknowledged that China is on tremendous economic
progress based on its 17% contribution to the global gross domestic product (GDP).
Mourdoukoutas (2017) argues that China’s stable growth is as a result of government stability
and Chinese companies’ competitiveness in the world market. It is estimated that by 2020
China’s economy will be at par with that of the US.
Nonetheless, the growth rate is also expected to slow down to about 3.4% annually
throughout the years preceding 2050, when it is economy will hit the $61 trillion based on PPP
(IMF n.d.). The projected decline can be looked at based on the fact that China partly relies on
external markets to stimulate its economic growth. China’s per capita growth is still ranked
lower than that of the United States. However, the continuous economic growth will ensure a rise
in its per capita income as time goes by. GDP is a product of population and productivity. Over
the years, the United States has been the leading economy despite having the third largest
population. However, the U.S. capital and labor have always been at a large scale in comparison
to China. The current situation is that China growth is almost catching up with the U.S.
productivity. With a population of 1.3 billion, China will soon be able to surpass the U.S in terms
of GDP.
China’s population is also a key factor that will influence its economic growth in the
coming years. As more people get richer, the demand for consumer products will increase, and
companies will have the opportunity to tailor their products and services to suit the Chinese
consume...