Comparing Countries
country_compare.xlsx |
Analysis
Labor Force: China - 71% , South Korea 62.8%
While South Korea boasts a strong high-tech economy they currently face a labor force problem with around 62.8% of their population are working. The reason behind this is they have a rapidly aging population for one. Secondly job creation has been lackluster with major South Korean companies such as Samsung are looking abroad for cheaper labor. High costs in education are also leaving higher-end jobs unfilled because of high drop out rates. China on the other hand is currently sitting around a 71% labor force. This is in part due to China's economy doing well. This is due to a growing private sector, increased autonomy for state enterprises, development of a stock market, modernized banking system, and opening to foreign trade and investments. Because of these reasons China has created a lot of jobs that need to be filled.
Health Expenditures: U.S. 17.14%, China 5.55%
While China does have a public insurance that reaches all of the citizens, it only provides very basic coverage. This is leaving Chinese citizens liable to pay around half of total healthcare spending. "That is likely to get significantly worse as the personal healthcare bill soars almost fourfold to 12.7 trillion yuan ($1.9 trillion) by 2025, according to Boston Consulting Group estimates." Medical loans are a main contributor to China's debt. China's government has moved to ramp up rural health insurance, boost coverage for major illnesses and put pressure on drug companies to slash prices. While President Trump tried to replace Obamacare or Affordable Care Act, he was unsuccessful. Growth is projected to average 5.8 percent from 2015 to 2025. National health expenditures hit $3.35 trillion in 2016, which works out to $10,345 per person. This is due to a stronger economy, faster growth in medical prices, and the aging baby boomer generation. "Medicare and Medicaid are expected to grow more rapidly than private insurance as the baby-boom generation ages. By 2025, government at all levels will account for nearly half of health care spending, 47 percent."
Population below the Poverty Line: U.S. 15.10%, China 6.10%
While 71% of China's population is working 6.1% are below the poverty line. One of the reasons for this is rural-urban migration. Substantial amounts of people are moving towards the urban cities looking for higher paying jobs. What this is leading to is more poverty, and people taking lower paying jobs which is leading to higher costs of living as well. Another reason is the Hukou System that divides the Chinese citizens by rural or by urban. This is preventing slums from forming as well as preventing migrant workers from receiving government provided services like healthcare, education and pension. Because of the agricultural lifestyle of most this leads to an education gap and preventing them from accessing healthcare. It is estimated that around 15% of America's population is below the poverty line. It is suggested that things such as big companies are sending jobs abroad for cheaper labor. And other jobs being such as steel and coal being decreased due to EPA regulations. That is expected to change under President Trump however. Some programs such as trade protectionism, social security, and minimum wage are actually making people poorer not richer. Social Security robs nearly every low and middle income family with a full time worker of at least $1 million over their lifetime.
Inflation Rate: China- .9%, Russia - 4.3%
In Russia the Bank of Russia is starting to cut rates. The Russian economy has been on the verge of GDP expansion now for the past few two quarters. Producer prices are rising and consumer spending is contracting by more than 2%. The economy is in need of credit to expand, but do to cut off funding from the U.S. and sanctions from the E.U. its not looking likely. Furthermore, the government's policy is to de-dollarize the economy as much as possible. Currently there is a demand for high-quality Russian debt. Currently China is suffering from low inflation due to lack of consumer demand. The current economic program is banking on boosting consumption. However, retail sales is at the lowest its been in 11 years and until income growth happens then consumerism will be low. It's unclear were demand is headed due to the economy slowing down, income growth stagnant, and the economic transformation being essentially stalled.
While South Korea boasts a strong high-tech economy they currently face a labor force problem with around 62.8% of their population are working. The reason behind this is they have a rapidly aging population for one. Secondly job creation has been lackluster with major South Korean companies such as Samsung are looking abroad for cheaper labor. High costs in education are also leaving higher-end jobs unfilled because of high drop out rates. China on the other hand is currently sitting around a 71% labor force. This is in part due to China's economy doing well. This is due to a growing private sector, increased autonomy for state enterprises, development of a stock market, modernized banking system, and opening to foreign trade and investments. Because of these reasons China has created a lot of jobs that need to be filled.
Health Expenditures: U.S. 17.14%, China 5.55%
While China does have a public insurance that reaches all of the citizens, it only provides very basic coverage. This is leaving Chinese citizens liable to pay around half of total healthcare spending. "That is likely to get significantly worse as the personal healthcare bill soars almost fourfold to 12.7 trillion yuan ($1.9 trillion) by 2025, according to Boston Consulting Group estimates." Medical loans are a main contributor to China's debt. China's government has moved to ramp up rural health insurance, boost coverage for major illnesses and put pressure on drug companies to slash prices. While President Trump tried to replace Obamacare or Affordable Care Act, he was unsuccessful. Growth is projected to average 5.8 percent from 2015 to 2025. National health expenditures hit $3.35 trillion in 2016, which works out to $10,345 per person. This is due to a stronger economy, faster growth in medical prices, and the aging baby boomer generation. "Medicare and Medicaid are expected to grow more rapidly than private insurance as the baby-boom generation ages. By 2025, government at all levels will account for nearly half of health care spending, 47 percent."
Population below the Poverty Line: U.S. 15.10%, China 6.10%
While 71% of China's population is working 6.1% are below the poverty line. One of the reasons for this is rural-urban migration. Substantial amounts of people are moving towards the urban cities looking for higher paying jobs. What this is leading to is more poverty, and people taking lower paying jobs which is leading to higher costs of living as well. Another reason is the Hukou System that divides the Chinese citizens by rural or by urban. This is preventing slums from forming as well as preventing migrant workers from receiving government provided services like healthcare, education and pension. Because of the agricultural lifestyle of most this leads to an education gap and preventing them from accessing healthcare. It is estimated that around 15% of America's population is below the poverty line. It is suggested that things such as big companies are sending jobs abroad for cheaper labor. And other jobs being such as steel and coal being decreased due to EPA regulations. That is expected to change under President Trump however. Some programs such as trade protectionism, social security, and minimum wage are actually making people poorer not richer. Social Security robs nearly every low and middle income family with a full time worker of at least $1 million over their lifetime.
Inflation Rate: China- .9%, Russia - 4.3%
In Russia the Bank of Russia is starting to cut rates. The Russian economy has been on the verge of GDP expansion now for the past few two quarters. Producer prices are rising and consumer spending is contracting by more than 2%. The economy is in need of credit to expand, but do to cut off funding from the U.S. and sanctions from the E.U. its not looking likely. Furthermore, the government's policy is to de-dollarize the economy as much as possible. Currently there is a demand for high-quality Russian debt. Currently China is suffering from low inflation due to lack of consumer demand. The current economic program is banking on boosting consumption. However, retail sales is at the lowest its been in 11 years and until income growth happens then consumerism will be low. It's unclear were demand is headed due to the economy slowing down, income growth stagnant, and the economic transformation being essentially stalled.
Reflection
Overall this country comparison was fairly easy. The hardest thing would be the analysis section and finding out the information as to why these countries were the way they were statistically speaking. It was overall pretty interesting and was able to learn a lot about four countries. When looking what is holding back a country such as Russia from becoming a fully developed country a few things became apparent. A Time article "These 5 Facts Explain Russia's Economic Decline" went over them. First Russia lacks diversification. The Kremlin supports and protects large state-owned companies. This comes at the expense of smaller and medium sized companies that create diversification. According to Time " SMEs spur innovation and respond effectively to changing times, technologies, and consumer tastes. In the EU, SMEs contribute an average of 40 percent to their respective countries’ GDP; in Russia, SMEs contribute just 15 percent" (Bremmer, 2015). Also between 2008 to 2012 Russia lost 300,000 private sector jobs and added 1.1 million state workers. Secondly, 50 percent of government revenues rely upon on oil and gas sales. We have seen what can happen to countries such as Venezuela that rely s heavily upon a single market. Because of this over reliance on gas this leaves Russia vulnerable to international sanctions. This will make Russia have to use state of the art drilling methods as well as relying upon China to help them drill. However, China wants a share of their oil. "The IMF believes sanctions could eventually cost Russia 9 percent of its GDP" (Bremmer, 2015).
This leads to the fourth reason being lack of productivity in Russia. "For each hour worked, the average Russian worker contributes $25.90 to Russia’s GDP" (Bremmer, 2015). If you compare this to the U.S. at $67 you can see they are lacking heavily. Also all of the highly educated Russian's are leaving the country in droves. "Between 2012 and 2013, more than 300,000 people left Russia in search of greener economic pastures, and experts believe that number has only risen since Moscow’s annexation of Crimea last year" (Bremmer, 2015). Lastly, Russia simply lacks the means and incentives to change. We shall see over the next decade what will become of Russia, but with the recent situation in Syria who knows what will happen next in Russia.
Overall, the experience in the class was great. I felt like I learned a lot and can understand economics better than I was able to prior. It will be nice knowledge to hold on to with the current state of our economy. Also I was able to find a site in The Economist that I like a lot. I am grateful for this experience and will not take it for granted.
Citation
Ian Bremmer (Aug 14, 2015) These 5 Facts Explain Russia's Economic Decline. http://time.com/3998248/these-5-facts-explain-russias-economic-decline/
This leads to the fourth reason being lack of productivity in Russia. "For each hour worked, the average Russian worker contributes $25.90 to Russia’s GDP" (Bremmer, 2015). If you compare this to the U.S. at $67 you can see they are lacking heavily. Also all of the highly educated Russian's are leaving the country in droves. "Between 2012 and 2013, more than 300,000 people left Russia in search of greener economic pastures, and experts believe that number has only risen since Moscow’s annexation of Crimea last year" (Bremmer, 2015). Lastly, Russia simply lacks the means and incentives to change. We shall see over the next decade what will become of Russia, but with the recent situation in Syria who knows what will happen next in Russia.
Overall, the experience in the class was great. I felt like I learned a lot and can understand economics better than I was able to prior. It will be nice knowledge to hold on to with the current state of our economy. Also I was able to find a site in The Economist that I like a lot. I am grateful for this experience and will not take it for granted.
Citation
Ian Bremmer (Aug 14, 2015) These 5 Facts Explain Russia's Economic Decline. http://time.com/3998248/these-5-facts-explain-russias-economic-decline/