Compare of economic conditions for some developing countries with China

Abstract

The study analyses economic conditions with employment issue of selected some African and Asian developing economies, which represent some important different developed one in this country-group. The analysing methods are the SPSS, which includes dimension reduction, variability, factor analyse, descriptive statistics, correlation and clustering. This case study compares the selected economies in fields of real GDP per employed person and employment – population ratio, which are the main variances of three components in the SPSS between 2006.-2014. This study is important because this analysis the economic development conditions of countries by the employment issue, and over this one the Real GDP per employed person and employment-population ratio.

The study emphasizes the economic conditions of China GDP per employed person, employment – population ratio and some issues concerning the environmental economic strategy. In China the volume of energy consumption grew rapidly between 2001 and 2011. The Chinese energy consumption grew by almost 140% in this period, although energy use per capita remains below the international average. China could realise considerable level for increasing RealGDPempl, while also Empl25 increased by 9,5% with 58,3 million persons, and Unempl15-24 mostly stagnated, in spite that Empl15-24 decreased by 24,66% with 30,7 million persons, and Unempl25 increased by 32,44% with 165,3 thousand persons.

Economic difficulties of these countries are considerable low of GDP per employed, the employment-population ratio, low level of employment and highly level of unemployment. The solution for the moderate economic growth is to increase efficient investments for different economic sectors.

Keywords: Real GDP, Employment-population ratio, Investment, Energy use, SPSS
JEL Classification: J0

I. Introduction

The research extends for some developing countries for example in the MENA Regions consisting of two main regions, namely Middle East (ME) and North Africa (NA) and several other African countries in South of Sahara and China. These selected countries have economic importance and geographic strategy of the world economy and EU. Also for the latest decades China has played more important role in the world economy by financial issues and the moderate cheap labour forces, which last one can contribute to the competitiveness of this country on the world market and the Chinese competitiveness is accompanying with consequent technological development concerning the environmental economic strategy. Therefore the investment can make influences on the employment increase and extending the environment-friendly technology and by the other famous name at the international level as green technology. Additionally to China, some other Asian countries have implemented considerable development for example Japan, Republic of Korea, India, Indonesia, Pakistan and Iran.

The study focuses on analysing economic growing conditions of China, because China has a leading role of the world economy for the last two decades. China has realised considerable increase in field of employment accompanying with GDP growth, therefore the employment-population ratio has reached 68,5% since 2006 by the end of 2014. Also the study is important, because this one analysis the economic re-structuring process in this country in turn from fossil energy use to renewable energy use. The Chinese experiences could provide an important example for the other countries (see Table-1). For the possibility of developing employment the green investments can ensure also wide side investment capacity to ensure increasing jobs in these selected countries – African and Asian countries with China. In this case the job-work places creating can and also should accompany with extending environment friendly technology in order to decrease and mitigate gas emission causing the global warming. These green investment strategy appears in the agricultural sector concerning the water management, irrigation and renewable energy resource use.

II. Material and Method

The analysing methods are the SPSS, which includes dimension reduction, variability, factor analyse, descriptive statistics, correlation and clustering. This case study compares the selected economies in fields of real GDP per employed person and employment – population ratio, which are the main variances of three components in the SPSS between 2006.-2014. This study is important because this analysis the economic development conditions of countries by the employment issue, and over this one the Real GDP per employed person and employment-population ratio. The study emphasizes the economic conditions of China GDP per employed person, employment – population ratio and some issues concerning the environmental economic strategy (Sajtos – Mitev, 20061; see Table-1 and Table-2).

Table-1: The employment over 25, employment 15-24, unemployment over 25, unemployment 15-24, Employment ratio to population in percent between 2006 and 2014 and Real DGP per employed person in Thousand US Dollar in 2013 in selected African and Asian countries
Source: http://www.ilo.org/ilostat/faces/help_home/data_by_country/country-details/indicator-
UNCTAD (2014): World Investment Report. Investing in SDGs, An Action Plan
http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1555
ILO, Promoting jobs, protecting people, http://www.ilo.org/global/regions/lang–en/index.htm
http://laborsta.ilo.org/sti/sti_E.html
South Sudan Employment and unemployment in 2008 for 25+ population

Table-2: Rotated Component Matrixa concerning the employment over 25, employment 15-24, unemployment over 25, unemployment 15-24, Employment ratio to population in percent between 2006 and 2014 and Real DGP per employed person in Thousand US Dollar in 2013 in selected African and Asian countries
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.a
a. Rotation converged in 4 iterations.
Source: Owned calculation by SPSS

The innovation process and development have strong connection with employment issues, therefore this case study focuses on the employment under 25 and over 25 year age employed and unemployed population. The competitiveness of the performance and the value added production within the vertically integrated product channel cannot often provide jobs and increasing level of employment in MENA regions and other developing regions, because more efficient work by using modern technology can lead to decrease number of employees. In North–Africa the unemployment rate has decreased by 4,5% for period of 2000-2010 (ILO, 2011a; ILO, 2011b2). In Middle East the unemployment rate was the highest in cases of women and youth generation, as it can be experienced based on the data of ILO, 2010b. The unemployment rate has moderately been decreasing for one decade, and only there was within 1% decreasing from the level of 2000 to the estimated level of 2011 in unemployment issue, this trend was somehow the same as in case of unemployment rate of males. In Middle-East the unemployment rate has decreased only by 0,3% for period of 2000 and 2011, and males unemployment decreased by 0,6% during the same time, which was little higher than in North-Africa by the end of 2011 (ILO, 2010a; ILO, 2010b3; IMF, 2010a; IMF, 2010b4).

There is a large gap between males, females and youth employment ratio in Middle East and North-Africa, also not enough supports for SME-s5 to extent their employment (ILO, 2011a and 2011b). But in some crude oil exporting countries as Saudi Arabia and Iran the advanced logistic system ensures the technical and physical background of product channel for highly developed transport network, mining sector and manufacturing industries. Also the middle and high educational systems can ensure the increasing educated level of labour force in some countries of Middle East and North Africa, in order that the efficiency of labour force can be realised and to be competitive. The considerable incomes coming from mining sector ensure one of the most important economic development trends in the world economy in fields of investment activities and stimulating the foreign direct investments (FDI) in Saudi Arabia (see detailed in SAMA, 2011, 20146).

III. Results and discussion

The economic development either in direction to create new jobs or to follow the green economic development policy for example the new law system of China started by new steps to open wider side possibility for using renewable energy resources. These are follows (Ellis,20087; WRI, 2014; WRI, 20028) that China’s national policies should be implemented in several fields, as the energy conservation law for determining the national priorities concerning the energy conservation works of local authorities, establishing fund at national and local levels for deciding the tax payment and financial supports, also the loan is to create the energy ensuring projects accompanying with creating more jobs (Government of China, 20089).

Naturally investments to decrease the unemployment rate lead to use more energy, which demands to create the new structure of energy use, for example in case of China. The volume of energy consumption grew rapidly between 2001 and 2011. The Chinese energy consumption grew by almost 140% in this period, although energy use per capita remains below the international average in China, the growing population and its needs will maintain a strong demand for this (China CDM Fund, 201110; Administration, 200711, CDM = Clean Development Mechanism).

Concerning the gas emission, which was 100% in 1971, and this increased from 100% of 1971 to level of 650% in China, to level of 568% in other Asia and 231% in Africa. The world gas emission doubled within this period therefore the increase of gas emission was by 100% more by the end of 2007. In spite that Africa has considerable backwardness in field of gas emission, its gas emission was over level of the world gas emission average, which can be titled as considerable UNCTAD (UNCTAD 201412). According to the investment activity of China the CDM Fund finance green 10 projects, which would like to developing production process of scale of economy and the research, as its same for development and also and diversifying function advanced equipment. 7 projects of these 10 project account carbon emission reduction by 8 594 300 ton CO2 equivalent/year, which have share as 96,3% of all 10 projects in this program.

Also mostly similar economic difficulties of Middle-East and North-African countries with increasing the possible gas emission are at present, as, when they wrote about the large oil reserves, the opportunity is for foreign mining firms to enter South Sudan. In case of South Sudan the crude oil mining sector does not connect with the increasing renewable energy use. Also the financial strategy and management at national level should be extended similarly to the firm–level, in which role of governance, organizing, planning and controlling according to well-defined goal criteria; preparation and realization of raising capital owners (Zéman-Tóth, 2006; and see detailed in Hegedûs – Zéman, 2016). Some experts focus on the main subjects of this case study concerning financial resources and issues, governmental budget, GDP growth rate and labour productivity. The general overview concerning the labour productivity, which needs for developing knowledge of the employees continuously (Lentner, 2007). The different kinds of taxes as revenues of the governmental budget can make influences on the governmental balance, which can continuously have negative balance, therefore this can accumulate the governmental debt of the EU member states from year to year (Lentner, 2010).

The Figure-1 provides clear overview for the employment conditions concerning the economic growth of selected countries of Asia, Africa and China between 2006 and 2014. The values of the variances of components are general average of 18 countries in Africa and Asia. According to the Figure-1, at the principle line of “X”, in the right side, above this line the RealGDPempl was at low level in Kenya, Angola and Sudan with less of EmplPopRatio, expect Kenya, where this ratio was 90,0% because of the important role of the agricultural sector was in field of employment.

Figure-1: Factor analyses for selected African and Asian countries with China between 2006-2014
Source: Owned calculation by SPSS based on the
UNCTAD (2014): World Investment Report. Investing in SDGs, An Action Plan
http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1555
REGR Factor Score-1: At Principle line horizontal “X”, Variances: Unempl25 (over 25 year age), Unempl15-24. REGR Factor Score-3: At Principle line vertical “Y”, Variances:
(Negative) – RealGDPempl, EmplPopRatio

But in China the RealGDPemp was considerable with highly level of EmplPopRatio by 68,5%. This ratio was the highest after Kenya, but Kenya has agricultural sector with high share in employment. China could realise considerable level for increasing RealGDPempl, while also Empl25 increased by 9,5% with 58,3 million persons, and Unempl15-24 mostly stagnated, in spite that Empl15-24 decreased by 24,66% with 30,7 million persons, and Unempl25 increased by 32,44% with 165,3 thousand persons. China could also realise the labour force transfer from Empl15-24 to Empl25. This result also could help this country to increase employment level with increase the number of employees of Empl25. China could increase the RealGDPempl as much as increase Empl25 and stagnated Unempl15-24. The Chinese employment policy was successful, which helped China to realise growing rate for RealGDPempl as same as growing rate of Empl25.

At the principle line of “X”, in the right side, under this line these countries, namely Pakistan, South–Africa, Tunisia, Turkey, Egypt and Saudi Arabia have mostly increasing Unempl25 and Unempl15-24 growing rate, while their RealGDPempl increases and their EmplPopRatio has decreasing growing rate, opposite to the one in the right side over “X” line.

In Egypt the increase of the RealGDPempl occurred because of little crude oil export, the fee for passing the Suez Canal and the somehow active tourism sector. Also the tourist sector can ensure a minimum income for the country to increase the Real GDP per capita employment in Tunisia. At the principle line of “X”, in the left side, above this line the RealGDPempl was at low level in Nigeria and India with less of EmplPopRatio, namely 49% in India and 58% in Nigeria, but the RealGDPempl was higher in cases of Korea-Republic-of and Indonesia with moderate better position in case of the EmplPopRatio, namely 63%. In Morocco the position is opposite, because the RealGDPempl is better than the general value of developing countries, but the EmplPopRatio was less than 50% of population by the end of 2014. In this session generally in those countries, where the EmplPopRatio is high, the RealGDPempl can be at low level, first in cases of India and Nigeria. In case of Morocco the EmplPopRatio, namely 43,8% in 2014 was at low level but the RealGDPempl was high. Naturally these data of EmplPopRatio and RealGDPempl cannot always decide the position of countries in the REGR Factor Score (as Coordinate system), because the Employment and Unemployment conditions have considerable effects of their positions (see Figure-2).

At the principle line of “X”, in the left side, under this line generally the EmpPopRatio is decreasing and the RealGDPempl is increasing, which can be proofed by examples of Japan, Iran and Algeria. In Iran the EmpPopRatio was very low level, namely 33,28% with increasing Unempl25 by 35,5% and decreasing Unempl15-24 by 34% by the end of 2014, while the RealGDPempl was considerably high. This means that the Unempl25 increased by the same rate, when in the same time the Unempl15-24 decreased, which resulted that the EmpPopRatio could not change, but the RealGDPempl remained at high level, because of the considerable crude oil sector’s prosperity. In general the economic and employment conditions were the same in Algeria similarly to Iran’s one, because the Unempl25 increased mostly as same as the decreasing rate of the Unempl15-24, therefore the EmplPopRatio remained mostly at earlier level, while the RealGDPempl increased considerably. In Japan either Unempl25 or Unempl15-24 moderately decreased in the same time, but the low level of the EmplPopRation remained at low level, while the RealGPDempl was at highly level. Naturally the advanced technology and strong innovation prosperity of Japan contributed to create large value of the RealGDPempl in the first half of 2010 years (see Figure-2, and Table-8). The economic results of Japan were very successful, because RealGDPemp was high and also the EmplPopRatio was relatively high, decrease of Unempl25 and Unempl15-24 decreased, and the Empl15-24 decreased for extending the education programs for youth people.

In Iran and Saudi Arabia could realise a successful growing rate for the Real GDP per employed person (RealGDPemp) because of the increasing crude oil production and export. Also Turkey could implement a quite good increasing RealGDPemp, while the increasing rate of Empl25 (30,7%) was considerable, and the increasing rate of Unempl25 (61,8%) and Unempl15-24 (20,1%) were also considerable, but at all the employment rate increased by more than 5 million employed persons, while the unemployed persons increased by less than one million persons, therefore the balance of employment and unemployment has been positive toward to employment growth in period of 2006-2014. The Unempl25 increased more, mostly three times, than Unempl15-24. In case of Turkey the considerable increase in RealGDPemp was resulted by increase of Empl25 mostly in agricultural sector, in several concentrated industrial large companies, Unempl25 and Unempl15-24 increased by 61,8%, with less one million persons and also the Turkish guest workers in EU, first in Germany and remitting their salaries to Turkey to increase RealGDPemp, while the EmplPopRatio remained relatively at low level, namely 45,5% (see Table-1).

Figure-2: Dendrogram using Ward Linkage based on the cluster analyse for selected African and Asian countries
Source: Owned calculation by SPSS based on the
UNCTAD (2014): World Investment Report. Investing in SDGs,
An Action Plan
http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1555

These data show that the well developed country Japan and also China with favourable economic conditions have large differences or distances from other countries of this country-group. Also the crude oil producing and exporting economies, as Saudi Arabia, Iran and sometimes Nigeria have considerable distance from most of developing economies. In some cases some developing economies have also considerable distance from other developing one, for example Egypt has distance from Kenya, Pakistan and India. Naturally not Egypt has more economic developed level in all of the cases, because India and Pakistan could realise more attractive economic results than in some cases of Egypt. India and Pakistan became more diversified economic countries, than Egypt from point of view of mining sector and manufacturing sectors and light industries.

The Figure-2 well show clusters of the selected countries of MENA regions, Africa and China, clusters are relevant to the coordinate system in Figure-1. If the Dendrogram is cut at line between 10 and 15, therefore four country-groups will be created. In the first group there are China, Japan, Korea R of, India, Algeria, Morocco, Tunisia and South-Africa Republic (see Figure-1). The second country group included Sudan, Angola and Kenya. The third country-group included Turkey, Saudi Arabia, Pakistan and Egypt. The fourth country-group included Indonesia, Nigeria and Iran. Countries of each country-group are similar to each other within a group based on their performances and general economic conditions by average values of economic variances (Table-1; Table-2).
In Figure-2 the Dendrogram is using Ward Linkage based on the cluster analyse for selected African and Asian countries, where if country-groups are selected by line 10, therefore four country-groups can be created, first group with 8 countries, the second one with 3 countries, the third one with 4 countries and the last fourth one with also 3 countries. According to the international resources the FDI (Foreign Direct Investment) can create the strong employment conditions based on the vertically integrated product channel accompanying with extending high-tech and ensuring products to supply market of EU (see in detailed in WIR, 2014). The FDI can focus on the increasing foreign human resources instead of domestic-national workers-employees.

Mina (201513) emphasized wage conditions of company effecting the RLP (real labour productivity) growth was to pay for employees, for example for encouraging the optimum productivity from employees; for enabling employees to share in the growth and prosperity of the organization; and also for ensuring the labour costs are suitably controlled in relation to other costs and in relation to revenues. The productiveness of labour force is very considerable to strengthen competitiveness on the world and national markets. Naturally there are some other costs of labour force, for example adjustment costs are for developing their skill and knowledge. The increase the skill and knowledge level of employees in order to strengthen their positions, the labour productivity and the integration of women and youth employees on labour markets and also to weak dependence from poverty and poor employment. In research of the article the efficiency of the production was analysed at national level under the data of RealGDPempl, as Real GDP per employed person in selected countries.

Conclusion

The solution for the moderate economic growth is to increase efficient investments for different economic sectors to increase the international competitiveness. In order to create the favourable economic conditions, this needs for increasing Empl25 to extend the domestic market of national economy, less Unempl25 and Unempl15-24, to increase the EmplPopRatio and its share of Population, intensive international competitiveness of national performance and companies. The plan is to increase the efficiency of the production and increase the RealGDPempl for interest of the future economic growth of tis selected country-group.

References

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http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1555
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