Economic Environment
China Macroeconomic Review
China's GDP grew 10.3% in 2010, above 2009's 9.2% expansion.
The Gross Domestic Product (GDP) in China expanded 9.80 percent in the fourth quarter of 2010 over the same quarter last year. From 1989 until 2010, China's average quarterly GDP Growth was 9.31 percent reaching an historical high of 14.20 percent in December of 1992 and a record low of 3.80 percent in December of 1990. Now, China passed Japan in the second quarter of 2010 and has become the world’s second-largest economy behind the United States During the past 30 years China's economy has changed from a centrally planned system that was largely closed to international trade to a more market-oriented that has a rapidly growing private sector. A major component supporting China's rapid economic growth has been exports growth. Such growth not only shows China's growing potential of the Chinese market, but also led to the improvement to the Chinese people's standard of livings.
Upgrades in consumer spending develops technologies and service sectors rapidly, thus results slow growth in the agricultural sector. Overall, China was developed by three main cities which are Shanghai, Beijing and Guangzhou. They have been the key to the development to the Chinese economy, attracting international trades and foreign investors. We will be expecting China to either maintain or increase its current growth for many years to come.
General Information:
China's economy has changed from a closed, centrally planned system to a more market-oriented one that plays a major role in the global economy - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment.
China generally has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security", explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation.
The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income. The dollar values of China's agricultural and industrial output each exceeded those of the US, although China was second to the US in the value of services it produced. The Chinese government faces numerous economic development challenges, including:
(a) Reduce its high domestic savings rate and correspondingly low domestic demand
(b) Sustain adequate job growth for tens of millions of migrants and new entrants to the work force;
(c) Reduce corruption and other economic crimes;
(d) Contain environmental damage and social strife related to the economy's rapid transformation.
In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years, but China rebounded quickly, outperforming all other major economies in 2010 with GDP growth around 10%. The economy appears set to remain on a strong growth trajectory in 2011. The government vows to continue reforming the economy and emphasizes the need to increase domestic consumption in order to make the economy less dependent on exports for GDP growth in the future, but China likely will make only marginal progress toward these rebalancing goals in 2011.
Two economic problems China currently faces are inflation - which, late in 2010, surpassed the government's target of 3% - and local government debt, which swelled as a result of stimulus policies, and is largely off-the-books and potentially low-quality.
BOP:
China's balance of trade surplus eased sharply in December as growth of imports outpaced exports. The trade surplus came in at $13.1 billion in December. That was well short of the expected surplus of $20.8 billion after the $22.9 billion surplus recorded in November. Exports rose 17.9% year-on-year to $154.2 billion in December, the customs office said, well wide of expectations for a 23.3% increase.
On the other hand, imports jumped 25.6% to $141.1 billion, higher than forecasts for a 24.9% rise.The customs office said the combined export-import value of $295.2 billion for December represented an all-time high.
In the whole of 2010, China's trade surplus totaled $183.1 billion, down from $196.1 billion in 2009.
Inflation:
China's inflation rose 4.6 percent in December from a year earlier, 0.5 percentage points lower the 5.1 percent increase that was registered in November.
The inflation rate stood at 3.3 percent for the full year, which was above the 3 percent target for the year set by the government in early March.
PPI:
The producer price index (PPI), another measure of inflation at the wholesale level, registered a year-on-year increase of 5.5 percent over the course of the year.
Industrial Value-Added Output:
China's industrial value-added output was up 15.7 percent for 2010 when compared to the annual figure for 2009, with the growth rate registering a 4.7 percentage point increase on the pace of growth registered in 2009, the NBS said.
In addition, the profits of large-scale industrial enterprises - which refers to enterprises with annual sales revenue that exceeds five million Yuan (about 750,000 US dollars) - expanded 49.4 percent from a year earlier to reach 3.88 trillion Yuan in the first eleven months of the year.
Fixed-Asset Investment:
China's fixed-asset investment rose 23.8 percent from a year earlier to reach 27.81 trillion Yuan (4.22 trillion US dollars).
Urban fixed-asset investment rose to 24.14 trillion Yuan, up 24.5 percent from a year earlier, while rural fixed-asset investment rose to 3.67 trillion Yuan, up 19.7 percent year-on-year.
FDI data:
According to China's commerce ministry, FDI in 2010 surpassed $100 billion for the first time. Over the entire year ending December 2010 inbound FDI increased 17.4% to $105.74 billion.
From these sections below, you are able to find details of about China's latest updates on its Macroeconomics development:
Major Macroeconomic Data
GDP (purchasing power parity):
$9.854 trillion (2010 est.)
country comparison to the world: 3
$9.854 trillion (2010 est.)
country comparison to the world: 3
$8.95 trillion (2009 est.)
$8.204 trillion (2008 est.)
note: data are in 2010 US dollars
[see also: GDP (purchasing power parity) country ranks ]
note: data are in 2010 US dollars
[see also: GDP (purchasing power parity) country ranks ]
GDP (official exchange rate):
$5.745 trillion (2009 est.)
[see also: GDP (official exchange rate) country ranks ]
$5.745 trillion (2009 est.)
[see also: GDP (official exchange rate) country ranks ]
GDP - real growth rate:
10.1% (2010 est.)
country comparison to the world: 5
10.1% (2010 est.)
country comparison to the world: 5
9.1% (2009 est.)
9% (2008 est.)
[see also: GDP - real growth rate country ranks ]
[see also: GDP - real growth rate country ranks ]
GDP - per capita:
$7,400 (2010 est.)
country comparison to the world: 128
$7,400 (2010 est.)
country comparison to the world: 128
$6,800 (2009 est.)
$6,200 (2008 est.)
note: data are in 2010 US dollars
[see also: GDP - per capita country ranks ]
note: data are in 2010 US dollars
[see also: GDP - per capita country ranks ]
GDP - composition by sector:
agriculture: 9.6%
[see also: GDP - composition by sector - agriculture country ranks ]
industry: 46.8%
[see also: GDP - composition by sector - industry country ranks ]
services: 43.6% (2009 est.)
[see also: GDP - composition by sector - services country ranks ]
agriculture: 9.6%
[see also: GDP - composition by sector - agriculture country ranks ]
industry: 46.8%
[see also: GDP - composition by sector - industry country ranks ]
services: 43.6% (2009 est.)
[see also: GDP - composition by sector - services country ranks ]
Labor force:
819.5 million (2009 est.)
country comparison to the world: 1
[see also: Labor force country ranks ]
819.5 million (2009 est.)
country comparison to the world: 1
[see also: Labor force country ranks ]
Labor force - by occupation:
agriculture: 39.5%
[see also: Labor force - by occupation - agriculture country ranks ]
industry: 27.2%
[see also: Labor force - by occupation - industry country ranks ]
services: 33.2% (2008 est.)
[see also: Labor force - by occupation - services country ranks ]
agriculture: 39.5%
[see also: Labor force - by occupation - agriculture country ranks ]
industry: 27.2%
[see also: Labor force - by occupation - industry country ranks ]
services: 33.2% (2008 est.)
[see also: Labor force - by occupation - services country ranks ]
Unemployment rate:
4.3% (September 2009 est.)
country comparison to the world: 40
4.3% (September 2009 est.)
country comparison to the world: 40
4.2% (December 2008 est.)
note: official data for urban areas only; including migrants may boost total unemployment to 9%; substantial unemployment and underemployment in rural areas
[see also: Unemployment rate country ranks ]
note: official data for urban areas only; including migrants may boost total unemployment to 9%; substantial unemployment and underemployment in rural areas
[see also: Unemployment rate country ranks ]
Population below poverty line:
2.8%
note:21.5 million rural population live below the official "absolute poverty" line (approximately $90 per year); an additional 35.5 million rural population live above that level but below the official "low income" line (approximately $125 per year) (2007)
[see also: Population below poverty line country ranks ]
2.8%
note:21.5 million rural population live below the official "absolute poverty" line (approximately $90 per year); an additional 35.5 million rural population live above that level but below the official "low income" line (approximately $125 per year) (2007)
[see also: Population below poverty line country ranks ]
Household income or consumption by percentage share:
lowest 10%: 3.5%
[see also: Household income or consumption by percentage share - lowest 10% country ranks ]
highest 10%: 15%
[see also: Household income or consumption by percentage share - highest 10% country ranks ]
note: data are for urban households only (2008)
lowest 10%: 3.5%
[see also: Household income or consumption by percentage share - lowest 10% country ranks ]
highest 10%: 15%
[see also: Household income or consumption by percentage share - highest 10% country ranks ]
note: data are for urban households only (2008)
Distribution of family income - Gini index:
41.5 (2007)
country comparison to the world: 54
41.5 (2007)
country comparison to the world: 54
40 (2001)
[see also: Distribution of family income - Gini index country ranks ]
[see also: Distribution of family income - Gini index country ranks ]
Investment (gross fixed):
47.8% of GDP (2009 est.)
country comparison to the world: 1
[see also: Investment (gross fixed) country ranks ]
47.8% of GDP (2009 est.)
country comparison to the world: 1
[see also: Investment (gross fixed) country ranks ]
Budget:
revenues: $1.149 trillion
[see also: Budget - revenues country ranks ]
expenditures: $1.27 trillion (2009 est.)
[see also: Budget - expenditures country ranks ]
revenues: $1.149 trillion
[see also: Budget - revenues country ranks ]
expenditures: $1.27 trillion (2009 est.)
[see also: Budget - expenditures country ranks ]
Public debt:
17.5% of GDP (2010 est.)
country comparison to the world: 112
17.5% of GDP (2010 est.)
country comparison to the world: 112
16.9% of GDP (2009 est.)
[see also: Public debt country ranks ]
[see also: Public debt country ranks ]
Inflation rate (consumer prices):
5% (2010 est.)
country comparison to the world: 144
5% (2010 est.)
country comparison to the world: 144
-0.7% (2009 est.)
[see also: Inflation rate (consumer prices) country ranks ]
[see also: Inflation rate (consumer prices) country ranks ]
Central bank discount rate:
2.79% (31 December 2009)
country comparison to the world: 129
2.79% (31 December 2009)
country comparison to the world: 129
2.79% (31 December 2008)
[see also: Central bank discount rate country ranks ]
[see also: Central bank discount rate country ranks ]
Commercial bank prime lending rate:
5.31% (31 December 2009 est.)
country comparison to the world: 148
5.31% (31 December 2009 est.)
country comparison to the world: 148
5.31% (31 December 2008 est.)
[see also: Commercial bank prime lending rate country ranks ]
[see also: Commercial bank prime lending rate country ranks ]
Stock of narrow money:
$3.838 trillion (31 December 2010 est.)
$3.838 trillion (31 December 2010 est.)
$3.242 trillion (31 December 2009 est.)
[see also: Stock of narrow money country ranks ]
[see also: Stock of narrow money country ranks ]
Stock of broad money:
$10.08 trillion (31 December 2010 est.)
$10.08 trillion (31 December 2010 est.)
$8.933 trillion (31 December 2009 est.)
[see also: Stock of broad money country ranks ]
[see also: Stock of broad money country ranks ]
Stock of domestic credit:
$8.156 trillion (31 December 2010 est.)
country comparison to the world: 4
$8.156 trillion (31 December 2010 est.)
country comparison to the world: 4
$7.24 trillion (31 December 2009 est.)
[see also: Stock of domestic credit country ranks ]
[see also: Stock of domestic credit country ranks ]
Market value of publicly traded shares:
$5.008 trillion (31 December 2009 est.)
country comparison to the world: 4
$5.008 trillion (31 December 2009 est.)
country comparison to the world: 4
$2.794 trillion (31 December 2008)
$6.226 trillion (31 December 2007 est.)
[see also: Market value of publicly traded shares country ranks ]
[see also: Market value of publicly traded shares country ranks ]
Agriculture - products:
rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish
rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish
Industries:
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
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
Industrial production growth rate:
11% (2009 est.)
country comparison to the world: 12
[see also: Industrial production growth rate country ranks ]
11% (2009 est.)
country comparison to the world: 12
[see also: Industrial production growth rate country ranks ]
Electricity - production:
3.451 trillion kWh (2008 est.)
country comparison to the world: 2
[see also: Electricity - production country ranks ]
3.451 trillion kWh (2008 est.)
country comparison to the world: 2
[see also: Electricity - production country ranks ]
Electricity - consumption:
3.438 trillion kWh (2008 est.)
country comparison to the world: 2
[see also: Electricity - consumption country ranks ]
3.438 trillion kWh (2008 est.)
country comparison to the world: 2
[see also: Electricity - consumption country ranks ]
Electricity - exports:
16.64 billion kWh (2008)
[see also: Electricity - exports country ranks ]
16.64 billion kWh (2008)
[see also: Electricity - exports country ranks ]
Electricity - imports:
3.842 billion kWh (2008)
[see also: Electricity - imports country ranks ]
3.842 billion kWh (2008)
[see also: Electricity - imports country ranks ]
Oil - production:
3.991 million bbl/day (2009 est.)
country comparison to the world: 5
[see also: Oil - production country ranks ]
3.991 million bbl/day (2009 est.)
country comparison to the world: 5
[see also: Oil - production country ranks ]
Oil - consumption:
8.2 million bbl/day (2009 est.)
country comparison to the world: 3
[see also: Oil - consumption country ranks ]
8.2 million bbl/day (2009 est.)
country comparison to the world: 3
[see also: Oil - consumption country ranks ]
Oil - exports:
388,000 bbl/day (2008 est.)
country comparison to the world: 32
[see also: Oil - exports country ranks ]
388,000 bbl/day (2008 est.)
country comparison to the world: 32
[see also: Oil - exports country ranks ]
Oil - imports:
4.393 million bbl/day (2008)
country comparison to the world: 4
[see also: Oil - imports country ranks ]
4.393 million bbl/day (2008)
country comparison to the world: 4
[see also: Oil - imports country ranks ]
Oil - proved reserves:
20.35 billion bbl (1 January 2010 est.)
country comparison to the world: 13
[see also: Oil - proved reserves country ranks ]
20.35 billion bbl (1 January 2010 est.)
country comparison to the world: 13
[see also: Oil - proved reserves country ranks ]
Natural gas - production:
82.94 billion cu m (2009)
country comparison to the world: 8
[see also: Natural gas - production country ranks ]
82.94 billion cu m (2009)
country comparison to the world: 8
[see also: Natural gas - production country ranks ]
Natural gas - consumption:
87.08 billion cu m (2009)
country comparison to the world: 9
[see also: Natural gas - consumption country ranks ]
87.08 billion cu m (2009)
country comparison to the world: 9
[see also: Natural gas - consumption country ranks ]
Natural gas - exports:
3.32 billion cu m (2009)
country comparison to the world: 31
[see also: Natural gas - exports country ranks ]
3.32 billion cu m (2009)
country comparison to the world: 31
[see also: Natural gas - exports country ranks ]
Natural gas - imports:
7.462 billion cu m (2009)
country comparison to the world: 27
[see also: Natural gas - imports country ranks ]
7.462 billion cu m (2009)
country comparison to the world: 27
[see also: Natural gas - imports country ranks ]
Natural gas - proved reserves:
3.03 trillion cu m (1 January 2010 est.)
country comparison to the world: 13
[see also: Natural gas - proved reserves country ranks ]
3.03 trillion cu m (1 January 2010 est.)
country comparison to the world: 13
[see also: Natural gas - proved reserves country ranks ]
Current account balance:
$272.5 billion (2010 est.)
country comparison to the world: 1
$272.5 billion (2010 est.)
country comparison to the world: 1
$297.1 billion (2009 est.)
[see also: Current account balance country ranks ]
[see also: Current account balance country ranks ]
Exports:
$1.506 trillion (2010 est.)
country comparison to the world: 2
$1.506 trillion (2010 est.)
country comparison to the world: 2
$1.204 trillion (2009 est.)
[see also: Exports country ranks ]
[see also: Exports country ranks ]
Exports - commodities:
electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment
electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment
Exports - partners:
US 20.03%, Hong Kong 12.03%, Japan 8.32%, South Korea 4.55%, Germany 4.27% (2009)
US 20.03%, Hong Kong 12.03%, Japan 8.32%, South Korea 4.55%, Germany 4.27% (2009)
Imports:
$1.307 trillion (2010 est.)
country comparison to the world: 3
$1.307 trillion (2010 est.)
country comparison to the world: 3
$954.3 billion (2009 est.)
[see also: Imports country ranks ]
[see also: Imports country ranks ]
Imports - commodities:
electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals
electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals
Imports - partners:
Japan 12.27%, Hong Kong 10.06%, South Korea 9.04%, US 7.66%, Taiwan 6.84%, Germany 5.54% (2009)
Japan 12.27%, Hong Kong 10.06%, South Korea 9.04%, US 7.66%, Taiwan 6.84%, Germany 5.54% (2009)
Reserves of foreign exchange and gold:
$2.622 trillion (31 December 2010 est.)
country comparison to the world: 1
$2.622 trillion (31 December 2010 est.)
country comparison to the world: 1
$2.426 trillion (31 December 2009 est.)
[see also: Reserves of foreign exchange and gold country ranks ]
[see also: Reserves of foreign exchange and gold country ranks ]
Debt - external:
$406.6 billion (31 December 2010 est.)
country comparison to the world: 22
$406.6 billion (31 December 2010 est.)
country comparison to the world: 22
$349.3 billion (31 December 2009 est.)
[see also: Debt - external country ranks ]
[see also: Debt - external country ranks ]
Stock of direct foreign investment - at home:
$574.3 billion (31 December 2010 est.)
country comparison to the world: 9
$574.3 billion (31 December 2010 est.)
country comparison to the world: 9
$473.1 billion (31 December 2009 est.)
[see also: Stock of direct foreign investment - at home country ranks ]
[see also: Stock of direct foreign investment - at home country ranks ]
Stock of direct foreign investment - abroad:
$278.9 billion (31 December 2010 est.)
country comparison to the world: 15
$278.9 billion (31 December 2010 est.)
country comparison to the world: 15
$229.6 billion (31 December 2009 est.)
[see also: Stock of direct foreign investment - abroad country ranks ]
[see also: Stock of direct foreign investment - abroad country ranks ]
Exchange rates:
Renminbi (RMB) per US dollar - 6.7852 (2010), 6.8314 (2009), 6.9385 (2008), 7.61 (2007), 7.97 (2006)
Renminbi (RMB) per US dollar - 6.7852 (2010), 6.8314 (2009), 6.9385 (2008), 7.61 (2007), 7.97 (2006)