What is the Forex free market?
Free Market is the Forex that enables buyers and sellers to conclude the transactions they desire without any interference from any party, except for the forces of supply and demand, and similar examples are the stock market,
- This process takes place in a Forex system that is subject to a small amount of government control, so that prices and profits are determined by the level of demand for goods and services.
Free Forex is characterized by many characteristics that make it among the important economies, the most important of which are the following:
Private ownership of resources:
Where resources are considered to belong to individuals and not to the government, and thus individuals control the means of production, distribution, exchange of goods, and labor. Flourishing financial markets: Financial Forex, such as banks, provides individuals with capital that enables them to obtain goods and services, and these markets, in turn, impose fees on transactions to make a profit. Freedom of participation: where individuals are free to obtain Forex, to consume it, or to produce enough or less for their own needs.
Common Restrictions on Forex Many restrictions are imposed on free markets, through the use of implicit or explicit threats to use force, and the most prominent restrictions imposed are the following:
Prohibit exchanges related to taxes, regulations, licensing requirements, and stock market controls, except with certain conditions. Monitor prices, Forex lots, and commodity purchases. Monitoring the recruitment of employees within the duty free markets. Monitor exchange rates and services provided to the public. Free Forex regulation, scaled down. Monitor voluntary exchanges within the framework of government regulations.
- The negative effects of the free market Many opponents of free markets tend to believe that some of the things that take place in them require government intervention, and this is due to the following reasons:
Sometimes the Forex prices at which the sale is made do not match the true costs of goods or services. The possibility of causing damage to the environment by some of the goods or services provided therein. Exploiting goods or services in a manner often harmful to others, unless such exploitation is prohibited by government laws. The monopoly of some competitors in the free market for some goods.
This makes it necessary to enforce Forex prevention policies. Some strong companies in the market gain huge market power, which may harm other competitors. Presenting business transaction costs to people as the best is detrimental to spot markets. Considering the allocation of optimal resources to the free market as a violation of the principles of fairness and fairness in distribution.
The largest economy in the world
The Chinese Economy The Chinese economy is classified as the second largest Forex in the world, as the nominal GDP in China is estimated at approximately 14 trillion US dollars, and China has witnessed an annual economic growth of 10% since 1978 AD; This is due to the transformation of its economy model from a centrally planned economy to an industrial economy based on exports, and thus it gained the title of the largest exporter of goods in the world, with its exports in 2016 amounting to approximately $2.09 trillion, in addition to China owning one of the largest consumer markets, and it is the second largest consumer market in the world. The world’s largest importer of goods.
Forex Economics Components
China built its Forex growth as a result of its reliance on low-cost exports of machinery and equipment. Huge government spending in state-owned companies supported and boosted these exports. China also developed cities around major Forex; This is with the aim of attracting workers, and as a result a quarter of China’s economy is based on real estate, in addition to government funding to build railways, and other infrastructure to support its growth. services and light industries, then the shift to reform the banking sector, which led to the most important transformations in the Chinese economy during the twentieth century.
- The most important Chinese Forex manufacturing industry China contributes to the manufacture and sale of goods more than any other country in the world, and its industries include iron, steel, aluminum, textiles, chemicals, toys, electronics, ships, and aircraft, where the field of manufacturing has become the largest and most important sector diversified in the country since 2015.
- Services The services sector is one of the largest industrial sectors in the Forex market, as it constitutes approximately 43% of the Chinese gross domestic product, as it began to flourish since 2015, in addition to contributing to the promotion of tourism, the spread of the Internet, and phone products.
One of the main industries in Chinese Forex, where China ranks as the largest consumer and producer of products despite having only about 15% of suitable Forex, as the country manages to feed its huge population, and China has Forex production 30% greater than the United States In addition to the presence of about 300 million workers in the Forex sector, and it is considered one of the most important Forex that is produced, and which is cultivated on large areas.