Chinese foreign policy
It was believed that the recession would not affect China since they had built up large foreign exchange reserves due to their exports to the rest of the world. However, many of their factories are not idle due to lack of demand forcing the government to act. Many economists say that the demand has fallen in China quicker than it has in the rest of the world.
China is primarily a manufacturing economy, which major percentage of the manufactured products exported to developed countries like USA, the European Union , Australia due to the large differences in product prices.
Though most of these countries are democracies and are vocal critics of the suppression of free speech and human rights abuses in China, the Chinese government maintains cordial relations with them due to economic factors.
However, it does not compromise on military issues.
China has adopted an aggressive foreign policy towards neighbouring countries like India and Japan .
It has encroached upon large areas of land in India, knowing that the Indian government will not be able to take aggresive military action.
The different aspects of Chinese foreign policy can be subdivided into 3 distinct categories
a. Immediate neighbours of similar population or size of economy like India, Japan, Taiwan
b. Other undeveloped or developing countries of smaller size like Pakistan, Vietnam, Laos , which do not pose any threat to the country both economically and militarily
c. Developed countries like USA, the European Union , Australia, which form the main market for their products.
China has the largest population in the world and is the factory to the rest of the world. Both its domestic and foreign policy are important to countries worldwide
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