Economic growth involves the increase in the inflation market value adjustment of given goods or services produced by an economy over a period of time. Economic growth is therefore the increase of a country’s output produced over a period of time (Amadeo & Amadeo, 2016). Economic growth is measured as the increased percentage rate of the gross domestic product. Similarly economic growth is also quantified by other related indicators comprising the gross national product or the gross national income derived from the calculation of the gross development product. Jonte (2016) asserts that the gross development product is derived from the economy’s national accounts calculations that report the annual income data, investment and the expenditure of the sectors of the economy. The calculated data makes it possible to estimate the total income that an economy has earned in a given year. Notably, economic growth is the gross domestic product ratio to the economy’s population, also referred to as the per capita income. It comprises the intensive growth and the extensive growth. Intensive growth comprises the efficiency in the use of inputs such as labor, capital, and energy.
Extensive growth involves the growth of the gross domestic products through the increase of the amount of the available inputs for use such as the increase of population (Jonte, 2016). Different countries have similarity in the economic growth rates at the similar economic development stages. Australia and china have similar trends in the economic growth rates such as technological developments, globalization and multinational and the global stock. However, the countries has difference in growth rates relating to the demand management where the countries that pursued the deepest deflationary policies such as the increase in tax and spending cuts have experienced a fall in the demand and therefore low economic development. Countries with strong economic recovery pursue the policies that help boost the short-run economic growth.
Australia is a growing economy that has experienced a continuous economic growth relating to the low unemployment levels, reduced inflation, low public debts and a financial stability due to strong financial systems.by the year 2012, Australia had grown with an average 3.5% growth annually (Clint, 2016). The Australian demand of resources from Asia and energy has rapidly grown especially from china. This has led to the creation of a channel for the investment of resources and the growth of products and services exports. The grayest part of the Australian economy is the service sector that constitutes the 70% of the Australian gross development product and 74 % of the existing jobs in Australia. Australia was not affected by the global financial crisis. Over the years the inflation rate in Australia has been controlled, this is due to the strong banking system present in Australia (Armstrong, 2015). The Australian economy has been growing in the recent past. The scenario is as a result of its benefit from the surge in its terms of trade, restricting the rise of goods and services prices. Hence, a substantial exporter of energy, food, and natural resources. Australia has an abundant natural resources that attract enormous foreign investment levels and the presence of the extensive reserves of natural gas, uranium, and renewable energy sources.
The resource increases the Australian resources sector. On the other hand, china has moved to the market-oriented system from the closed, central planned system. Hence, china is the greatest exporter (Gelbi. 2016). The undertaking is through the phase out of the collectivized farming to the gradual liberalization, increased autonomy for the county’s enterprise, development of the stock markets and the diversification of the banking systems, opening of the foreign investment and the growth of the private sector. In the recent past the china economy has renewed its support for the state-owned enterprises in the sectors that the states consider being important to its economic security explicitly seeking to substitute competitive national champions globally (Armstrong, 2015).
Technological development has been the major contributor to the economic growth of both Australia and china in the recent past. The use of technology has aided in innovation and ease of coming up with a new solution to problems that have been in existence in Australia and china. Problems like unemployment and a financial instability have been the major problems facing Australia. The new technology has been utilized for instance in the development of new machines, implements and access useful information (Armstrong, 2015). The new technology such as the use of computers has been used in the manufacturing companies in Australia to help in the discovery of new ways and methodologies to approach particular needs in various sectors such as the energy sector. The use of the new technology has improved on the discovery of natural resources in the energy sector. Similarly, due to the use of the new technology job opportunities has been provided in various sectors of production such as the manufacture of the technological implements, the manufacture of their spares and the use of the implements (Daniel, 2016).
In the energy sector, employment level has increased due to the discovery of the various methods of discovery of the natural resources and the use of the implements used in the extraction of the natural resources which in turn result in the creation of job opportunities. The new technology also in the manufacturing and service sector has greatly contributed to the Australian economic growth through telecommunication and computers (Daniel, 2016). The developments relating to telecommunication and the computers have been helpful in the translation, data-entry, storage and the security of information in various sectors in the country which have helped in fostering of the financial systems which in turn improve the financial service (Gelbi, 2016). China on the other hand, however, uses technology directly to improve on its economic growth. China has been involved directly in the production of the technological implements such as the computers where the Chinese universities are doing research which the view to be similarly significant as the schmoozing with the powerful bureaucrats and their best science and engineering experts according to Xie, Zhang and Lai (2014) the Chinese government due to its market-oriented system, the country has been able to produce technological gargets relating to electronic materials such as the computers, mobile phones and other electronically powered implements which the country sell outside the country. The Chinese economy has thus grown through the new science and technology by that around 8% of China’s GDP. Similarly, the Chinese economy is driven by the move of resources from the public to the private sector (Hienkel, 2015). The 8 percent growth domestic product is also realized by the public to the private sector shift where the Chinese employees have moved from the state owned firms to the private sector. It is viewed that in the public sector there is incentive to work hard as compared to the private sector this is the reason behind the vast productivity improvement from the workers in the private sector (Xie, Zhang & Lai, 2014).
Globalization refers to commercial interdependence among countries as in is reflected in the movements across the nations with an aim of trade, commerce, labor, technology and investment. Australia is an energy producing country. It has been a producing nation of the resources such as fuel and other natural resources, for instance, the natural gas (Hienkel, 2015). The resources that Australia produce are exported to other nations such as those in Asia as a means of trade. The Australian economy thus gains the market where its products can be sold. Australia therefore, earns a revenue through the export of the products through the energy sector. This translates to the Australian economic growth in its growth development product which has grown over the years. Energy is a necessity for any economic development. Australia, therefore, benefit from the sale of the energy producing product such as the natural gas through the export to other countries in Asia. Through globalization, Australia has been in a position to provide labor services to other nations in the energy sector through the extraction of natural resources such as petroleum products and natural gas (Hienkel, 2015). The scenario is due to the specialization in the energy sector. The Austrian economy through the deployment of its specialist in the energy sector to other nations for the extraction of energy producing resources such as the natural gas translates to the Australian investment in the client nations.
Through investment in the nation’s energy sector, Australia has gradually grown economically over the years to being among the leading energy producing nation in in the energy sector today. Similarly, Australia uses the new technology in the energy production sector (Hienkel, 2015). The use of the heavy and the complicated machinery used in the discovery, location and the extraction of the energy production resources are the result of the new technology which some are also part of the globalization such as the computers which are used for the storage of information (Clifford, 2016). In the financial sector, Australia has benefited in the foreign exchange trade in the international financial transfer of funds through globalization. The Australian economy thus grows financially through the financial flow in the first growing areas that involve the interest rate, equity, commodity derivative and the Australian currency. The Australian interest rates, as well as the currency derivatives, make up to almost 98% of the traded deliveries total value of the Australia which translates to its growing gross domestic product (Hienkel, 2015)
The globalization in china has benefited the country greatly, that is evident in the economy’s high gross domestic product growth. The companies in china have been growing strongly and bigger that result to the china’s rapid industrialization. The Chinese strongest company has been able to market themselves not only in china but also outside the Chinese territory. This was made possible through the indigenous innovations that mad the industrial globalization possible. The indigenous innovations have been the major reason behind the Chinese technological growth today (Jibri, 2016). The sale of the technological product has been the major reason behind the international trade between china and other countries. China trades the products manufactured in the Chinese land and sell them to the other nations gaining the foreign income which in turns contributes to the china’s economic growth rates. Technology is the major investment of the Chinese products outside the country. China produces a wide range of technological products which the country seeks their market outside the country with an aim of trading them and making a foreign exchange in return making profit (Jibri, 2016).
Foreign investment is the china’s major source of the high economic growth. The china’s foreign direct investment forms approximately the china’s half international trade and over 84 percent of the total Chinese high technology exported. China has also been providing labor in the service of other countries through globalization. The scenario is due to the level of skilled personnel from the Chinese land being high which makes it have a competitive advantage in the in the delivery of service through labor to other nations. China over the years has experienced the shift from the public to the private sector (Jibri, 2016). The private sector thus translates to the china’s independence foreign investment. The independence foreign investment is as a result of innovations and the technological progress of the Chinese people after the public to the private sector shift. It has thereby resulted in the China’s gross domestic product growth to about 6 to over 13 percent growth.
Stockbridge (2016) explains that Australia and China have differences in their economic growth. The Australian economy is a mixed market economy in which the most decisions are made by the private sector. The Australian g government hence plays the role of providing collective commodities involving the goods and services. Further, the government regulates the activities of the private sector, income distribution and other activities that are relevant to the state’s economy. The Australian private sector is the major contributor to the economy’s growth. The private companies thus are involved with the decision making relating to the economy’s growth (Jibri, 2016). The private sector comprises of the largest Australian companies that have a greater marketing value both outside and inside the country. The companies provide the government with the taxes and revenue through investment outside the country where the investing company is involved with the sale of the country currency as well as the delivery of service to the invested nation. The private companies provides also job opportunity to the country’s citizen through direct employment or as the stake holders (Google, 2016).
The government on the other hand only provides good s and services for the company such as the raw materials, in the energy sector. More so, it regulates the private sectors activities. The government ensures that there is policies that are set to be followed by the private corporates. Through the regulations, the government ensures that there is the distribution of labor in the various sectors in the country (Google, 2016). Distribution of labor seeks to ensure there is maximum productivity as well as the contribution of the existing sectors in the economic growth, similarly solving the problem of unemployment. The sector involved includes tourism with 75% labor force as a tertiary sector. 21% of labor is employed in the secondary sector where as 4 % labor is employed in the primary sector agriculture (Google, 2016). China, on the other hand, is an economy that is planned and uses command planning in the allocation of its resources according to the priorities of the production as the state planning authority has set. The Chinese labor force thus is more distributed among the three sectors, with the primary jobs taking 36.7%, the secondary level taking 28.7% and the tertiary sector taking 34.6 % (prezi.com, 2016).
The economic growth of both countries Australia and china have impacted the society both positively and negatively. Australia has improved on the poverty level as the Australian citizens have gained employment through the three division provided by the government, for instance, the tourism which involves approximately 75% of the total jobs. Despite its economic growth, it is still slow as it should have been growing (Google, 2016). The Australian economy in the recent past has been growing but has not met the expected growth rate of 0.4% as in the year 2015. The economic growth only grows by only 0.2% rate. The difference in the growth rate thus implies that the nation’s economy needs to strive even harder to ensure that the expected growth rate is met (Google, 2016). China, on the other hand, has reduced the poverty level through its economic growth. Due to the large population of 20% world population china has a bigger consumer of its products. Once the government provided the employment the produced output will have a market both within the country and outside the country (Clifford, 2016).
The Chinese economic growth also has led to its lead as the economic leader. China in the year 2015 was termed the biggest aluminum and steel producer with a 25% rise in the export of the metallic commodities. The technology companies also have gradually grown over time as the Chinese phone manufacturing companies such as Xiami lead in the production of smartphones (Google, 2016). The Chinese phones also have a greater market outside the country. Through globalization, the companies are able to market and export their products worldwide in countries such as Peru and India. However, the economic growth leads to the government spending that created a debt to the gross domestic ratio of approximately 200%. For an economy to grow it requires funds that are used in the creation of job opportunities through innovations. This requires the government to seek for potential financial stable governments to lease funds that are required to fund projects and innovations. The undertaking leads to the government expenditure beyond the available amounts which leads to debts. The debts are in turn a burden to the nation’s citizens as they have to pay through taxes to repay the existing debts (Google, 2016).
The economic growth in china further leads to the rise of the ultra-rich merchants. The rich professional’s demands more people liberties. As they live in or near urban areas where most jobs are located. More people thus moved to the urban areas in the year 2012 with a percentage rate of 52.6 percent as compared to the past years who were on 20%. (Amadeo & Amadeo, 2016). Furthermore economic growth in china lead to the shift from the public to the private sector. Globalization thus leads to the Chinese offer of cheap labor with an aim to increase its competitive advantage which prevented the Chinese innovators from upgrading to along the technological invention (Clifford, 2016).
Conclusively, economic growth is essential in the development of a nation. Economic growth is vital for the eradication of a nation’s problems, for instance, the poverty level that is a great hindrance to the states development. Notably, different nations have different ways in which they grow economically for instance marketing, industrialization and delivery of service. There are several drivers of a country or a nation to economic growth which include technological developments that lead to innovation and creation of employment in the course of the innovation process. Also, globalization is a driver to the realization of a given states economic growth. It involves the interdependence of nations where the economies come together for the purpose of trade, investment, technology finance, and labor. Nations come up to trade their products that may not exist in other countries for the purpose of gaining profit.
Similarly, other nations may trade their products that they manufacture due to specialization or abundance. A nation like Australia is specialized in the manufacturing, delivery of service relating to labor on energy production. Australia is well specialized due to the existence of the energy products in the country which are required in other nations. Globalization thus facilitates the trade of the available product in Australia and absent in Asian countries with an aim of making a profit and the improvement of the nation economy. Similarly, the need for a commodity leads to innovation to come up with the required necessity. China innovation, therefore, is due to the technological development necessity. The need for the new technology is the reason behind the innovation relating to new computers and phones. The new technology further, improves the economic growth through financial systems. The new technology improves on security data entry and storage which fosters efficiency. The economic growth how ever has its benefits and challenges. Economic growth has helped to reduce the poverty levels and unemployment. However, it has led to the creation of low and high classes due to differences in income levels. The scenario has also contributed to the provision of cheap labor the aim of earning a leaving.
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