China's economic impact on Bolivia Essay Example | Topics and Well Written Essays - 2000 words

China's economic impact on Bolivia - Essay Example Bolivia is Latin America’s poorest nation, while China is considered by many to be the second richest nation in the world. It is not considered unusual for China to exert its economical might in ensuring that it gets more profit from its trade relations with a poorer nation; moreover, the level of counterfeit China-made products flooding Bolivia’s market have made the trade arrangement a weight that is hurting the Bolivian markets. Policies in China that do not Curb Counterfeiting The competition brought by counterfeit Chinese products has served to impoverish the Bolivian economy whose products are hardly able to compete in the local economy, let alone the international market. The production of counterfeit products is nothing new. Every nation on earth has companies or firms that produce counterfeit products. Moreover, most nations do not product them at the rate and quantity that China does. This is made worse by the fact that the export rules used by the Chinese government actually support the export of counterfeit products. China has always had huge local, individual, and state streams of revenue that come from knock-off products. In order to comply with the newly instituted rules of the World Trade Organization, China made alterations to its foreign trade rules in 2003 so as to do away with the control that government-owned trading corporations had on all exports. Prior to this, all of the country’s exports had to go through state-owned firms.This means that counterfeit product firms had to pass through state-approved brokers and distributors to allow their fake goods into the international market.... There are other factors that contributed to the explosion of counterfeiting practice in China. These include the ease of technology transfer, and relaxed foreign trade regulations. There are also local factors such as the lack of enforcement of the law when Chinese companies produce counterfeits, an economic explosion experienced in small communities, and the existence of organized crime syndicates that deal in the counterfeits (Zhonghua Press 29). Organized crime syndicates play a major role in ensuring that counterfeit products reach international markets. The presence of the internet has also served to further develop the production of counterfeit products. Many people today, particularly those who have extra money to spend on secondary needs, often shop on the internet. Counterfeit products usually sell for much less than authentic products. This means that consumers from different parts of the globe can elect to purchase cheap products from China through the internet. This fact alone has been one of the main reasons for the explosion of the counterfeiting industry in China. In a sense, China’s advantage lies in the fact that its production sector is quite colossal and is also highly mechanized. China’s currency is also undervalued in relation to the dollar and it has readily available access to cheap labor. This makes China much stronger than a nation such as Bolivia whose manufacturing sector is much smaller in size. Bolivia also experiences political unrest on a much more common basis than China and its trade deficit with China keeps growing. This makes it easy for Chinese counterfeit products to flood the Bolivian market. However, it