The Chineese Economic Decline Sign of Global

economic ressesion

By:Hoydhio Gilbert Christofer Toding

Id number:014201500157
Lecture:Mr.Miftah Zikri

1.Introduction
The recess of US dollar and the stop of quantitative easing had become the main
highlight of global economy,the panick of fear that dollars could attract back to US leave
major problem to a country that have many dollars flowing through their economic
cycle,there are also the problem of the absurd increase of oil price in middle east that bcome
the major causes of the ruckus of newspaper and economic magazine. But did you know?
Problem also come from world second largest economy China. China face economic
dramatically recess as their manufacturing begin to overflow and reduce their production,and
also taken a shortage in capital.This problem actually more important to us Indonesian
because china is the leading economician artist in asia that will also affect all contry in asia
especially indonesia.as we know that our country had face economic reformation under
president jokowi. We also put a strategical movement that include china as an actor this could
be pending or even canceled.In order to know more i will review and explain what exactly
happen in china economic.
China economy has been undergo high change and development gaining pwer in both
trading power and production for these past year.The growth this country its unexpectedly
become so large and even rival the world number one economical country US in both
bargaining power and investment,they even manage to beat US in production of secondary
and thirdly product by 30% differences.This country also become one of the biggest stimulus
in country for labour and property capital.

2.Discussion
Many aspect inflicting the way affectin customer behaviour like
fame,promotion,nationality could create a huge difference in company progress.The same
happen to the product of china the rapid growth and cheap price of thheir product at
imposible rate has led people start an assumption that their product is only a copy of Western
product.
Many people belief that chineese product is not good because they only copying
western product and recreate it with a lower cost material,this assumption is not fully wrong,
and not right too why? The country of china has been made into a large scale production
house by the western company because it overflowing human rescource,thus china country

manage to follow the path of market follower strategy to research every movement done by
their curent client and make something simmiliar with low cost.
The effect of this market follower strategy had create a speculation that china product is in a
bad quality or what we know in Indonesia as KW.After several years China is not just
producing for western nation but declaring their own brand as a market chalanger and strive
to compete in global market.
However chineese economic growth that absurdly fast with their startegy and policy making.
For countries that dependently growth to become worlds second largest economy Chinese
growth model, had become a huge question what is the recie of their success. will the worlds
second largest economy bacame an economic liability or strength ?
There is the report by the HSBC,and they have reporting the PMI index(Purchase Managing
Index) revealing that there is huge declined in manufactring index below 50 that shown
chineese industry has face a contraction in manufacturing section.This is happening because
of chineese industry had risen their own production while keep doing the Production
House from western side that cause their manufacture to be overflowed by List to do that
cause labourer or even machine exhausted and caused overflowing demand or even scarcity.
investors in Shanghai China, hit by panic selling. As a result, the Shanghai stock exchange
fell and more than 1,300 companies requesting authorities to stop trading exchanges,Panic in
Shanghai, spread to Asian countries. Like, Hongkong stock andJapan's stock fell Many
suspected cause of decline in the Shanghai stock exchange, caused of shanghai exchange
risen to high and dropped so fast at the mid year. This view, assume that there is no
correlation between the financial sector to the real sector.
as investors seems to expect the Chinese Government poured stimulus to create economic
bubble so that it may deflate gradually. But, after Chinese economic data last reported, it
seems not an economic bubble deflated gradually, but broke instantly.company that lost its
source of capital started to find money to resume their production or even bankrupt
directly.espescially to find the supplies from another country
Indeed, not all the sharp decline in the stock will continue to be the economic crisis. But if
underestimated it can be fatal. For example, the great depression of 1928 and the global crisis
in 2008, starting from a severe decline in the Dow Jones. And has become a natural law,
capital market investors trying to predict events earlier than the real sector.

For us to only think that china is only an production house is compeletely wrong
statement.They are country that have a solid fundamental based economy.and it is a very
solid and big economy that have very low chance of collapsinghave have so much
rescource behind it. But that doesnt mean china doesnt have problem in their economic
plan and policy.The huge debt that comes from them taking risk from overinvest at
property bussiness and excess amount of material such as steel,iron,clay and other
goods.there are also a problem inefficient state owned firms and excess amount of
capital outflow.
Even though china is in the most jeopardy position,they still have the
rescources ,capital,and foreign reserved estimated 3 trillion US Dollar to fund their
economic reform and stimulus to the production and export. But still the china
clummsiness in contorlling their economic had become the most fear for their future
economic.
The reforming of china will start from reallocating their main income
Investment that is 50% of their GDP with the panick selling of the investee they need to
make what we called as bad debt become accountable that will ussually take 3- 4 years
while meantime their growth will be suffering even though they already backed it up with
cutting the interest rate policy

If the predictions of investors about China's economic eruption comes into reality, the
impact would be enormous for the world, especially Asian countries. Because China second
largest economy in the world,they have the back up of production trick and strategy from
almost all the world.Therefor, China will strive to increase its exports. As a result, countries
with weak industries, such as Indonesia will be flooded with Chinese goods.and then will
lead to drop of export rate of another asian country such as japan and philipines.
It is also push other country that already in jeopardy after the lost of dollar in their
country and now they lost their source of investment and production house too creating havoc
in the economic at country like Brazil.The china goverment is not just stay still facing this
problem they already putting effort

Solution and Conclusion

Chinese goverment had already putting policy in order to couner measure this
problem.The latest policy is that their putting a policy in their interest rate Chinas Interest
-rate policy had become a big bomb into world financial.Confusion about that policy has
become a the highlight of the market that are called the black onday.while Chinese goverment
is bad at communicating their intention to the global market.leaving a huge mark at both
financial and investment sector of the world
But criticizing Chinese policy is easy rather than offering helpfull advice. The fact is
that Chinas government no longer have any good choices.Then,what are the choices left for
china? The Goverment also pulling the policy of keep putting of their currency remenbi
into foreign country and starting their planning into reconstructing and rebalancing their
economic source of income.Meanwhile,it will be hard to find investor because of the recent
problem and though finding more capital rescource will be their main heldback
In my opinion china need to reform strict exchange policy by limiting the foreign
investor although it will reduce some of national income its more good then to be facing a
danger of economic collapse they need to also controlling their buying behaviour and
investing.The policy to buy overnumber of material or rescources while its low price might
be good for production sector but also bring bad effect if the rescources is defected because
of long time storaged. The last thing that china need to give a correction is that their
behaviour to over investing at property industry so that they will not have what we called as
Money on hand while problem like this occured .
In Conclusion This case has become huge dilemma for the world,many expert is researching
and giving many opinion and suggestion to the Chineese goverment though it is imposibble
to solve this problem instantly the world will face a great recess before this problem could be
fixed but problem like this is good for long-term economic expansion at china.They will
realized what exactly bring their Supreme economy to face grave danger and fix their lax
rules and regulation in order to prevent the same thing happen in the future.

Article references:
-http://davidstockmanscontracorner.com/china-entering-ugly-recession-not-just-a-hardlanding/
-https://www.project-syndicate.org/commentary/china-renminbi-crisis-capital-controls-bybarry-eichengreen-2016-02?barrier=true
-https://www.cigionline.org/videos/chinas-transition-new-model-of-economic-growth