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||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||7,314.48||8,386.68||9,469.12e||10,355.35e||11,285.13|
|GDP (Constant Prices, Annual % Change)||9.3||7.7||7.7e||7.4e||7.1|
|GDP per Capita (USD)||5,429||6,194||6||7,572||8,211|
|General Government Balance (in % of GDP)||0.6||0.4||-0.5||-0.6||-0.5|
|General Government Gross Debt (in % of GDP)||36.5||37.4||39.4e||40.7||41.8|
|Inflation Rate (%)||5.4||2.6||2.6||2.3||2.5|
|Unemployment Rate (% of the Labor Force)||4.1||4.1||4.1||4.1||4.1|
|Current Account (billions USD)||136.10||215.39||182.81||185.31e||220.58|
|Current Account (in % of GDP)||1.9||2.6||1.9e||1.8e||2.0|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
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.
|Chinese Yuan (Renminbi) (CNY) - Average Annual Exchange Rate For 1 USD||6.83||6.77||6.46||6.31||6.20|
Source: World Bank - Last Available Data.
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.
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.
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||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||1,005,920||1,396,247||1,743,484||1,818,405||1,950,383|
|Exports of Goods (million USD)||1,201,610||1,577,754||1,898,381||2,048,710||2,209,626|
|Imports of Services (million USD)||158,107||192,174||237,003||280,164||329,124|
|Exports of Services (million USD)||128,599||161,210||175,670||190,440||207,018|
|Imports of Goods and Services (Annual % Change)||4.9||20.4||12.0||8.2||10.8|
|Exports of Goods and Services (Annual % Change)||-10.2||27.7||10.3||7.0||8.7|
|Imports of Goods and Services (in % of GDP)||22.3||25.6||26.1||24.5||23.8|
|Exports of Goods and Services (in % of GDP)||26.7||29.4||28.5||27.3||26.4|
|Trade Balance (million USD)||235,179||245,539||236,050||297,746||351,766|
|Trade Balance (Including Service) (million USD)||220,130||223,024||181,904||231,845||235,380|
|Foreign Trade (in % of GDP)||49.0||55.0||54.6||51.8||50.3|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||51.9%|
(% of Imports)
|See More Countries||61.3%|
Source: Comtrade, Last Available Data
|- 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
|- bn USD of services exported in 2012|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||19.95%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||17.47%|
|Advertising, market research,...Advertising, market research, and public opinion polling||2.48%|
|Merchanting and other trade-related...Merchanting and other trade-related services||14.85%|
|Sea transportSea transport||14.15%|
|Air transportAir transport||5.17%|
|Audiovisual and related servicesAudiovisual and related services||0.07%|
|- bn USD of services imported in 2012|
|Sea transportSea transport||23.73%|
|Air transportAir transport||5.89%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||8.11%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||7.12%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.99%|
|Merchanting and other trade-related...Merchanting and other trade-related services||6.96%|
|Audiovisual and related servicesAudiovisual and related services||0.20%|
Source: Comtrade, Last Available Data
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.
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.).
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.
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