Business / Operations Management And Ethics
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Autor: anton 16 November 2010
Words: 444 | Pages: 2
In this paper, we will discuss how the prices of good, oil and raw material in China have increased so outrageously due to the high demand for commodities. The rapid growth in China has given the economy such a global impact on the world in numerous ways. â€œChina has a great wealth of mineral and natural resources. Reserves of coal, petroleum, iron ore, tungsten, tin, bauxite, copper, limestone, and many other minerals needed in modern industry are abundant. â€œ(China Britannica Student Encyclopedia).
The rapid growth that is occurring in China is straining its infrastructure and overburdening the power grid fizzles. Shanghai and Yantian ports are backed up for days slowing commerce around the globe. Soybean, airplanes are heavily sold in China. China has looked at several ways to prevent the economy from becoming overly congested. But, with China imports increasing 40 percent in 2003, it is difficult for China to slow down its economy by 9.8 percent. China is known as the worldâ€™s third-largest importer.
In April 2004, many construction companies were hit hard by the shortage of cement and other needed materials to complete ongoing and planned building projects. The shortage of cement and other raw material was due to China large consumption needed to keep up with its growth. China is rapidly growing and requiring more building material than ever before causing prices for raw material to steadily increase. â€œChina consumes 55 percent of the world's cement, 40 percent of its steel and 25 percent of its aluminum. China's growing demand for oil is one reason crude prices are so high.â€ (China drains raw materials, May 2004)
Within the first three months of 2004, real estate prices rose 28.3 percent in Shanghai. For the fifth consecutive year, the national grain production has decreased which include rice, corn and wheat. Oil and grain imports have doubled this year.
As price hikes increased grain, cooking oil, meat, eggs and fodder have caused such an inflationary trend. â€œPurchase prices for wheat went up by 40 to 80 Yuan (US$ 4.80 - 9.70) per ton in major wheat production areas such as Henan Province. Prices for corn rose by 80 Yuan in northern China, while prices for rapeseed and rice increased by 20 and 10 per cent, respectively, in Anhui Provinceâ€(The Chinese Economy, November 08, 2003)
China Britannica Student Encyclopedia. Retrieved December 22, 2004, from EncyclopÐ¶dia Britannica Online.
China drains raw materials. Retrieved December 22, 2004 from Detroit Free Press Online.
More on China and Commodities. Retrieved December 1, 2004 from China Economy Watch
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