Successful transition Essay Example | Topics and Well Written Essays - 500 words

Successful transition - Essay Example Mercantilism in this aspect involves a system of economic operation which focuses on unification and improving the levels of power of a certain state majorly monitory wealth through restricted governmental monitoring of an entire economic dimension by use of regulations, policies in order to: Ensure a balance of trade, promote agricultural and technological advancement through the creation of international market monopolies (Atkinson 2012 pg. 4). To begin with, the mercantilism nature of Chinese economy has led to the attraction of a large number of foreign investors especially from the United States. This condition has been related to the intended undervalued currency and the cheap labor available within the Chinese populace; this has created job opportunities to majority of the population as well as to the foreign investors who are presented with a platform to operate their businesses. Additionally, the deliberate undervaluing of the Chinese Currency presents an advantage to both the foreign investors in China and the Local Chinese producers. It enables them to successfully export their goods hence having the access to a large market. In relation to the Chinese Government, the mercantilism has created various advantages for instance: It has enabled the Chinese government to be in possession of an extensive foreign exchange reserve specifically the dollar dominated property which currently stands at 265 billion US dollars. Consequently, there is also the aspect of a higher rate of an increasing Foreign Direct Investments (FDI); this has also been attributed to the intended undervaluing currency of China, availability of cheap labor as well as an influx of foreign business investors major from the United States of America and other major economies such as the Great Britain, Japan, Singapore and the Korea (Davis 2011, pg. 1). Despite the