Economy of China
Pudong in Shanghai
Rank 2nd (nominal) / 2nd (PPP)
Currency Renminbi (RMB); Unit: Yuan (CNY)
Fixed exchange rates USD = 6.312333 RMB
(average in 2012)
Fiscal year Calendar year (1 January to 31 December)
Trade organisations WTO, APEC, G-20 and others
Statistics
GDP
$8.358 trillion (nominal by Expenditure approach: 2nd; 2012)
$8.227 trillion (nominal by Production approach: 2nd; 2012)
GDP growth 7.8% (2012)
GDP per capita
$6,076 (nominal: 87th; 2012)
GDP by sector agriculture: 10.1%, industry: 45.3%, services: 44.6%% (2012 est.) CIA - The World Factbook
Inflation (CPI) 2.5% (December 2012)
Population
below poverty line less than $1.25 / 13.1% (2008)
less than $2 / 29.8% (2008)
Gini coefficient 0.48
Labour force 795.5 million (1st; 2010)
Labour force
by occupation agriculture: 36.7%, industry: 28.7%, services: 34.6% (2008 est.)
Unemployment 4.1% (Q4 2012)
Average gross salary $457 monthly (2010)
Main industries World leader in gross value of industrial output; mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites
Ease of Doing Business Rank 91st
External
Exports $2.021 trillion (2012 est.)
Export goods Electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment
Main export partners USA 17.1%, Hong Kong 14.1%, Japan 7.8%, South Korea 4.4%, Germany 4% (2011)
Imports $1.78 trillion (2012 est.)
Import goods Electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals
Main import partners Japan 11.2%, South Korea 9.3%, USA 6.8%, Germany 5.3%, Australia 4.6% (2011)
FDI stock $116 billion (2011)
Gross external debt $697.2 billion (30 September 2011 est.)
Public finances
Public debt 22.15% of GDP (2012)
Revenues $1.838 trillion (2012 est.)
Expenses $2.031 trillion (2012 est.)
Economic aid recipient: $1.12 per capita (2008)
Credit rating AA- (Domestic)
AA- (Foreign)
AA- (T&C Assessment)
(Standard & Poor's)
Foreign reserves $3.28 trillion (1st; Sep 2012)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars
The People's Republic of China (PRC) is the world's second largest economy by nominal GDP and by purchasing power parity after the United States. It is the world's fastest-growing major economy, with growth rates averaging 10% over the past 30 years. China is also the largest exporter and second largest importer of goods in the world.
On a per capita income basis, China ranked 87th by nominal GDP and 92nd by GDP (PPP) in 2012, according to the International Monetary Fund (IMF). The provinces in the coastal regions of China tend to be more industrialized, while regions in the hinterland are less developed. As China's economic importance has grown, so has attention to the structure and health of the economy.
As the Chinese economy is internationalized, so does the standardized economic forecast officially launched in China by Purchasing Managers Index in 2005. Most economic growth of China is created from Special Economic Zones of the People's Republic of China. For details on the development progress of PRC's infrastructure, see Infrastructure in China: Foundation for growth.
History [edit]
By 1949, continuous foreign invasions, frequent revolutions and restorations, and civil wars had left the country with a fragile economy with little infrastructure. As Communist ascendancy seemed inevitable, almost all hard and foreign currency in China country were transported to Taiwan in 1948, making the war-time inflation even worse.
Since the formation of the PRC, an enormous effort was made towards creating economic growth and entire new industries were created. Tight control of budget and money supply reduced inflation by the end of 1950. Though most of it was done at the expense of suppressing the private sector of small to big businesses by the Three-anti/five-anti campaigns between 1951 to 1952. The campaigns were notorious for being anti-capitalist, and imposed charges that allowed the government to punish capitalists with severe fines. In the beginning of the Communist party's rule, the leaders of the party had agreed that for a nation such as China, which does not have any heavy industry and minimal secondary production, capitalism is to be utilized to help the building of the "New China" and finally merged into communism.
The new government nationalized the country's banking system and brought all currency and credit under centralized control. It regulated prices by establishing trade associations and boosted government revenues by collecting agricultural taxes. By the mid-1950s, the communists had ruined the country's railroad and highway systems, barely brought the agricultural and industrial production to their prewar levels, by bringing the bulk of China's industry and commerce under the direct control of the state.
Meanwhile, in fulfillment of their revolutionary promise, China's communist leaders completed land reform within two years of coming to power, eliminating landlords and redistribute their land and other possessions to peasant households.
Mao tried in 1958 to push China's economy to new heights. Under his highly touted "Great Leap Forward", agricultural collectives were reorganized into enormous communes where men and women were assigned in military fashion to specific tasks. Peasants were told to stop relying on the family, and instead adopted a system of communal kitchens, mess halls, and nurseries. Wages were calculated along the communist principle of "From each according to his ability, to each according to his need", and sideline production was banned as incipient capitalism. All Chinese citizens were urged to boost the country's steel production by establishing "backyard steel furnaces" to help overtake the West. The Great Leap Forward quickly revealed itself as a giant step backwards. Over-ambitious targets were set, falsified production figures were duly reported, and Chinese officials lived in an unreal world of miraculous production increases. By 1960, agricultural production in the countryside had slowed dangerously and large areas of China were gripped by a devastating famine.
For the next several years, China experienced a period of relative stability. Agricultural and industrial production returned to normal levels, and labor productivity began to rise. Then, in 1966, Mao proclaimed a Cultural Revolution to "put China back on track". Under orders to "Destroy the Four Olds" (old thoughts, culture, customs and habits), universities and schools closed their doors, and students, who became Mao's "Red Guards", were sent throughout the country to make revolution, beating and torturing anyone whose rank or political thinking offended. By 1969 the country had descended into anarchy, and factions of the Red Guards had begun to fight among themselves.
1978–1990 [edit]
Reforms began with Li Xiannian and Deng Xiaoping, Chinese leaders in the 80s. Unlike Mao, Deng and Li were pragmatic leaders, known less for their ideological commitment than for their slogan: "Who cares if a cat is black or white, as long as it catches the mice." Once they consolidated their power, they began to put their pragmatic policies to work, determined to bring China back from the devastation that the Cultural Revolution had wrought.
Since 1978, China began to make major reforms to its economy. The Chinese leadership adopted a pragmatic perspective on many political and socioeconomic problems, and quickly began to introduce aspects of a capitalist economic system. Political and social stability, economic productivity, and public and consumer welfare were considered paramount and indivisible. In these years, the government emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government also had focused on foreign trade as a major vehicle for economic growth. In the 1980s, China tried to combine central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits. Reforms began in the agricultural, industrial, fiscal, financial, banking, price setting, and labor systems.