14. What are the international implications of China not being on a trajectory t

Question

14. What are the international implications of China not being on a trajectory to become a capitalist free market economy as was previously thought? 15. Explain how left-leaning economists see wages as being determined. 16. Explain whether you agree with the free market thinking or left-leaning economists when it comes to wage determination. 17. What is the proper role for government in a capitalist society? In explaining your position, consider ideas ranging from those of conservative economists, mainstream economists and left- leaning economists.

Explanation / Answer

Today, China's economy is the second-largest in the world and will likely overtake the U.S. sometime this century. China is widely considered to be one of the most successful developing countries in modern times. The Chinese economy has recorded record rates of growth over an extended time period, in concert with a massive industrial transformation. China may soon be capable of anchoring an alternative international economic system, thereby offering other countries the opportunity to reduce their dependence on the current U.S. dominated system and pursue their own independent development strategies. China is the world's largest emerging market economy, both in terms of population and total economic product. The country is arguably the world's most important manufacturer and industrial producer, and those two sectors alone account for more than 40% of China's gross domestic product. China is also the world's largest exporter and the second largest importer, and it contains the fastest-growing consumer market. Major industries include manufacturing, agriculture and telecommunication services. Since 1980, China's Communist Party has been using "socialist market economy" to describe their nation's economic system. China's economy is subject to market forces, and capitalists are involved. China's Communist Party recognized that it was to their nation's advantage not to isolate itself economically from the rest of the world.

A wage is monetary compensation paid by an employer to an employee in exchange for work done. Payment may be calculated as a fixed amount for each task completed or at an hourly or daily rate or based on an easily measured quantity of work done. Wages are part of the expenses that are involved in running a business. Depending on the structure and traditions of different economies around the world, wage rates will be influenced by market forces (supply and demand), legislation and tradition. Without a wage floor, employers would continue to pay less and less, destroying the purchasing power of the consumers who would make less money. The minimum wage then helps mitigate that imbalance of power between employers and low-wage workers.

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