Question

Why is this statement false about China from a economics perspective?

One of the reasons the U.S has not given China market status is because China still has a communist political system

Answer 1

Economic policy does get effected by the political status of the country. There has been always conflict relationship between US and China Market. Let us discuss more about China market to understand the concept in better way:-

1.Rougly 76% of the Chinese agreed that they are better off in a free economy.

2. Rather then the fact that Chinese Government is Communist, but people supports Capitalism.

Since past few years, the Government has opened up market for flow of foreign investment and privatization.

If we see from the data China is one of the biggest economy in the world. China's incredible growth had led to the expansion of the economy. However, few believe that the economics policy still creates the gap between the rich and the poor. Economic reforms cannot happen without powerful political support. Let me explain through example Deng had carried out all the responsibilities himself. He convinced all the stakeholders and guided them properly. He played some of his masterstorkes to deal with the economy like the decision to open up the economy and most importantly to open the grounds for agriculture.

China had a dual syatem of prices under which state enterprises had to provide a certain quality of output. Basically China directly converted the state owned planned economy into private market and welcomed foreign investment.

China had a much larger share in agriculture in relation to employment., more decentralized economy. But had chamged a lot with the passing years.

These two are the dominant economies. The financial crises has brought this relationship under the international issue. Their relationship created a danger of global imbalance.

The Chinese high national saving rate, its policy in the management of flow of foreign investment abetted U. S. profiligacy of providing cheap goods. The bilateral trade between the two countries had let to the trade deficit. However China's proper management of exchange rate had come under great scrunity. China's overall trade surplus have revived on currency manipulation. Basically, US is falling for its own prey by imposing large tariffs on China import.