FITA helps you find
service providers for:

Market Research


flag China China: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

China is the second largest global economy, the largest exporter, and has the largest exchange reserves in the world. The global recession of 2009 interrupted the steady growth momentum and revealed the limits of growth essentially based on exports. Due to the global economic slowdown and the decline in trade, China's growth slowed down to 7.6% in 2013, the slowest pace since the 1990s. Growth should remain at around 7.5% in 2014, supported by strong domestic demand.

In 2013, the slowing down of the economy pushed the government to relax its economic policy. In order to restrart growth, the government granted tax exemptions to very small businesses and invested in infrastructures. The new government gave rise to hopes that it would introduce changes, however so far it has been sending mixed signals to the market as to its will to liberalise and deregulate the economy. In October 2013, a new free-trade zone opened in Shanghai which allows foreign companies to participate but with certain restrictions. Credit restrictions have been lifted but interest rates are still set by the state.

In late 2013, in the third plenum of the Communist Party's (CCP) Central Committee, the CCP announced its reform program to be completed by 2020. It includes: political changes such as abandoning forced labor camps; greater independence for the courts at the local level; relaxing the one-child policy; reform of the "hukou" system which controls (or restricts) mobility and access to public services for citizens; reform of access to land to facilitate the sale of agricultural land by peasants; liberalization of interest rates and the gradual opening of financial transactions; and a reform of state-owned companies. The previous emphasis on economic growth is now being replaced by social concerns such as environmental degradation, corruption and rising inequality. China is still having to deal with many challenges: its aging population, its shrinking workforce and the lack of openess of its political system, issues of competitiveness in an economy dependent on high capital spending, and the expansion of credit.

A large gap remains between the living standard of the cities and the countryside, between urban zones on the Chinese coast and the interior and western parts of the country, as well as between the urban middle classes and those who have not been able to profit from the growth. These inequalities are becoming increasingly worrisome for both the Chinese authorities and the investors. Although poverty has largely decreased in China, almost 10% of the population, i.e. more than 120 million people, continue to live on less than 1 USD a day.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 7,314.488,386.689,469.12e10,355.35e11,285.13
GDP (Constant Prices, Annual % Change) 9.37.77.7e7.4e7.1
GDP per Capita (USD) 5,4296,19467,5728,211
General Government Balance (in % of GDP) 0.60.4-0.5-0.6-0.5
General Government Gross Debt (in % of GDP) 36.537.439.4e40.741.8
Inflation Rate (%) 5.42.62.62.32.5
Unemployment Rate (% of the Labor Force) 4.14.14.14.14.1
Current Account (billions USD) 136.10215.39182.81185.31e220.58
Current Account (in % of GDP) 1.92.61.9e1.8e2.0

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

China has a highly diversified economy, dominated by the manufacturing and agricultural sectors.

The agricultural sector employs almost 40% of the active population and contributes up to about 10% to the GDP, although only 15% of the Chinese soil (about 1.2 M km ²) is arable. China is the most populated country in the world and one of the largest producers and consumers of agricultural produce. China is the leading global producer of cereals, rice, cotton, potatoes and tea. In terms of livestock, it also dominates sheep and pork livestock farming and the world’s production of fish products. A series of plans have been aimed at transforming agriculture by modernizing and diversifying it and making it more productive.

The mining sector occupies an important place in the Chinese economy, since the country’s subsoil is rich in energetic resources. China has significant coal reserves (the country's primary energy source), which account for two-thirds of the total primary energy consumption. It is the world leader in the production of certain ores (phosphate and titanium) and also has significant petrol and natural gas reserves. It is the world’s fifth biggest oil producer with 3.8 million barrels a year.

The industry and the construction sectors contribute approximately half of China's GDP. China has become one of the preferred destinations for the relocation of global manufacturing units because of a cheap labor market, even though the cost of labor has been increasing. China’s economic development has coincided primarily with the development of a competitive and outward-oriented manufacturing sector. More than half of the Chinese exports are made by companies with foreign capital. Their share in the sector's added-value varies according to the sector: more than 60% for electronics and less than 20% for the majority of producer goods. The Government sector still contributes approximately 40% to the GDP.

The services sector has not progressed, encumbered by public monopolies and restrictive regulations. The tertiary sector's share in the GDP is over 40% and it employs a third of the active population.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 34.8 29.5 35.7
Value Added (in % of GDP) 10.0 43.9 46.1
Value Added (Annual % Change) 4.0 7.8 8.3

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Chinese Yuan (Renminbi) (CNY) - Average Annual Exchange Rate For 1 USD 6.836.776.466.316.20

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about China on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
52.5/100
Position:
Mostly Unfree
World Rank:
137/178
Regional Rank:
12/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.39
World Rank:
50/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

Return to top

Foreign Trade in Figures

Trade represents over a half of the Chinese GDP. After having achieved a record trade surplus over the past few years, China has become the world's largest exporter and ranks second among world’s largest importers. Chinese trade surplus was increasing until it slowed down due to the international financial crisis, creating a significant deficit in 2010, imports soaring due to a strong domestic demand, while exports were lagging behind due to the slowness of the global economic recovery. This phenomenon proved to be only temporary, the country again achieving a surplus the following month. After a contraction in 2011 due to the crisis of the euro zone, the surplus again increased in 2012 due to the slowing down of the growth of exports, following the difficulties in the property market. In 2013, the Chinese trade surplus grew by nearly 260 billion USD, which represents a 12.8% increase compared to 2012. 

China's main trade partners are the countries of South East Asia, the United States and the European Union.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 1,005,9201,396,2471,743,4841,818,4051,950,383
Exports of Goods (million USD) 1,201,6101,577,7541,898,3812,048,7102,209,626
Imports of Services (million USD) 158,107192,174237,003280,164329,124
Exports of Services (million USD) 128,599161,210175,670190,440207,018
Imports of Goods and Services (Annual % Change) 4.920.412.08.210.8
Exports of Goods and Services (Annual % Change) -10.227.710.37.08.7
Imports of Goods and Services (in % of GDP) 22.325.626.124.523.8
Exports of Goods and Services (in % of GDP) 26.729.428.527.326.4
Trade Balance (million USD) 235,179245,539236,050297,746351,766
Trade Balance (Including Service) (million USD) 220,130223,024181,904231,845235,380
Foreign Trade (in % of GDP) 49.055.054.651.850.3

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Hong Kong 17.4%
United States 16.7%
Japan 6.8%
South Korea 4.1%
Germany 3.0%
See More Countries 51.9%
Main Suppliers
(% of Imports)
2013
South Korea 9.4%
Japan 8.3%
China
8.1%
United States 7.9%
Australia 5.1%
See More Countries 61.3%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 8.3%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 5.0%
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 4.0%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 3.6%
Liquid crystal devices not constituting articles...Liquid crystal devices not constituting articles provided for more specifically in other heading; lasers (excl. laser diodes); other optical appliances and instruments not elsewhere specified in chapter 90 1.7%
See More Products 77.3%
- bn USD of products imported in 2013
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 11.9%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 11.3%
Iron ores and concentrates, incl. roasted iron...Iron ores and concentrates, incl. roasted iron pyrites 5.4%
Liquid crystal devices not constituting articles...Liquid crystal devices not constituting articles provided for more specifically in other heading; lasers (excl. laser diodes); other optical appliances and instruments not elsewhere specified in chapter 90 2.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.4%
See More Products 66.1%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2012
34.80%
26.13%
20.33%
7.55%
6.40%
1.74%
0.99%
0.94%
0.55%
0.52%
0.07%
- bn USD of services imported in 2012
36.27%
30.54%
15.06%
7.33%
6.31%
1.37%
1.29%
0.68%
0.59%
0.37%
0.20%

Source: Comtrade, Last Available Data

Return to top

Sources of General Economic Information

Ministries
Ministry of Foreign Trade and Economic Cooperation
Ministry of Finances (in Chinese)
State Administration for industry and commerce
Ministry of Land and Resources
Statistical Office
National statistical office of China
Central Bank
Bank of China
Stock Exchange
Shanghai stock exchange
Shenzen stock exchange
Search Engines
China Vista
China Pages
Gcweb
Sina
Bhanvad China
Yahoo! China
Economic Portals
China Economic net

Return to top

Political Outline

Executive Power
The Chinese executive is supervised by a collegial body equipped with important powers, the State Council, under which are placed the Government commissions, ministries and other organizations with the rank of a ministry.
According to the Constitution, the Council is "the Supreme Administrative Body" of the Chinese Government, even if the majority of important measures are decided by the Political Bureau of the Chinese Communist Party (CCP). The Council thus plays an important role in the economic domain. The Premier is the chief and heads the government, assisted by 4 Deputy Pemiers. The Council also includes 5 State Councillors, who, like the Deputy Premiers, have jurisdiction over several Ministries or Commissions of ministerial rank. The Secretary General of the government also belongs to the Council.
Legislative Power
The legislature is mono cameral, composed of the National People's Congress (NPC), a "Body of supreme power of the Government." It is made up of approximately 3,000 designated deputies elected every five years by indirect vote of local bodies and meets only once per annum in a plenary session. In reality, it has become since the eighties, a "simple case of resonance" of the local or sectional interests. Deputies are the representatives of 23 provinces, 5 areas and 4 autonomous municipalities.

The NPC comprises a delegation of the People's Liberation Army. The Standing Committee of the National People's Congress is appointed by the Political Bureau of the Central Committee of the Party. It sits instead of the NPC during its recess and exercises all its powers. It is composed of a president, fifteen vice-presidents and 176 permanent members. The Standing Committee sits regularly, but it is the Bureau of the NPC which exerts its functions on a daily basis.

Eligibility is controlled by the CCP, which also has a right to supervise the appointment of the executives and the senior officials of different administrative units.

Main Political Parties
The one and only political party in the country is CCP (Chinese Communist Party). Though there are eight other registered small parties but all of them are controlled by CCP.
Current Political Leaders
President: Xi Jinping (since 14 Mach 2013) - CCP
Premier: LI Keqiang (since 16 March 2013) - CCP
Next Election Dates
President: 2018
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
175/180
Evolution:
2 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Map of freedom 2014
Source: Freedom House

 

Return to top

Any Comments About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Last Updates: January 2015