The Political Economy of Chinas Development Model Essay

The Political Economy of Chinas Development Model - Essay Example oom is a great of pride from a Chinese perspective, the rapidly growing economic crisis that has besieged world economics calls for a fresh reconsideration of this phenomenal growth. 1While some commentators argue that greedy Wall Street financial firms are to blame, others point fingers much higher at the former chairman of the US Federal Reserve Board Alan Greenspan. Other scholars with socialist orientations see in the entire crisis as the inherent weaknesses of the capitalist system imploding as it inevitably would. It is some of these views that are sampled in this paper. Certain economic analysts in China are angry. They point out that the cause of this crisis is the irresponsibility of the rich Chinese who have thrown good money after bad with crazy speculative investments of foreign reserves on failed foreign financial organizations. Despite these criticisms China has joined hands with the US, Europe and other countries to spur recovery. The measures it has taken include a rescue package of 4 trillion Yuan and increased investment in American treasury bonds. The International reserve currency, usually measured against American dollars, helps to regulate international trade. All countries involved in international trade reserve some foreign currency for the sake of trade with one another. When supply exceeds demand however, a crisis of international proportions arises as is happening today. The strength of international trade relies on stability in the bigger economies such as the US, the EU and lately China. Most money in these economies is kept in the stock market and banking systems. However, when these very systems of currency storage are hit by a depression, the entire world economy is affected, Jacques Rueff, 1971. The factors playing out in China may therefore be too complex for some of its domestic critics to conjecture. But in very simple terms, their country is now a major player in the world economy and crises of this nature come with the