China and South Korea
China and South Korea: every country has its type of economy that it uses. There are two main types of economy, i.e. command economy and a free-market economy. However, some countries combine economic models and use a blended economic model. These types of economics are used in evaluating the extent and freedoms the citizens have in conducting business within a country. In an economy where the government has a significant influence in determining what to be produced and sold, the economic model is referred to as a command economy. People have no free will to do any business. Where individuals have free will in business transactions and production of goods and services, the economic model is referred to as a free-market economy.
In a command economy, the government is responsible for the regulation of supply and demand for goods and services. The government determines the amount of a commodity to be in the market. This type of economy best works in communism or a socialism country where everything belongs to the government and people have no rights to own them. In a free-market economy, the supply and demand for goods and services are regulated by the people. People have free will on the products and services they are offering.
According to economic analysis, China has a more favourable economy as compared to South Korea. China’s GDP 2018 was $13.61 trillion, while South Korea GDP 2018 was $1.619 trillion. Both countries have a gradual increase in GDP over the past years. However, China’s GDP per capita is far lower than that of South Korea. South Korea had a GDP per capita of $31,362.75 (2018), while China had a GDP per capita of $9,770.85 (2018). China’s unemployment rate is at 3.8% while that of South Korea is at 3.2% as of 2019. The population of China is by far very high as compared to that of South Korea. South Korea’s imports were reported to be at $18.312 billion while that of China was $1,264.2 billion in 2018. Exports were at $2.3 trillion for China and $604.8 billion for South Korea in 2018.
The data from the above information is obtained from different sources. The most used source is the world bank’s statistics. The data from this source is up-to-date and accurate hence relevant to the work. Other sources include CEICDATA, Statista, macrotrends and countryeconomy.com. All these sources have credible economic information.
A free-market economy the best model to use based on the economic trends of the two countries. Where people have a free-trade will in conducting a business, the economy can thrive well since the people regulate the supply and demand. The consumption of goods and services is improved in a free-market economy. A command economy denies people the ability to trade since the government regulates everything freely.
From the above data, a free-market economy is the best type of economy that countries should adopt where people conduct businesses freely. Scarcity and surplus of goods and services are easy to manage in a free market economy as people decide on the measure to adopt to counter them. People trade best when they make their own business decision rather than the government determining the rules.