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Economy of China
Economy of China
China's socialist market economy[17] is the world's second largest economy by nominal
GDP,[1][18] and the world's largest economy by purchasing power parity according to the
IMF,[19]although China's National Bureau of Statistics rejects this claim. [20] It is the
world's fastest-growing major economy, with growth rates averaging 10% over the past
30 years.[21] Due to historical and political facts of China's developing economy, China's
public sector accounts for more share in the national economy with the burgeoning
private sector.[22][23]
China is a global hub for manufacturing, and is the largest manufacturing economy in
the world as well as the largestexporter of goods in the world.[24] China is also the
world's fastest growing consumer market and second largest importer of goods.
[25]
China is a net importer of services products.[26]
China is the largest trading nation in the world and plays a vital role in international
trade,[27] and has increasingly engaged in trade organizations and treaties in recent
years. China became a member of the World Trade Organization in 2001.[28] China also
has free trade agreements with several nations, including ChinaAustralia Free Trade
Agreement, ChinaSouth Korea Free Trade Agreement, ASEANChina Free Trade
Area, Switzerland and Pakistan.[29]
On a per capita income basis, China ranked 77th by nominal GDP and 89th by GDP
(PPP) in 2014, according to theInternational Monetary Fund (IMF). The provinces in the
coastal regions of China[30] 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.[31][32]
Xi Jinpings Chinese Dream is described as achieving the "Two 100s": the material goal
of China becoming a "moderately well-off society" by 2021, the 100th anniversary of
the Chinese Communist Party, and the modernization goal of China becoming a fully
developed nation by 2049, the 100th anniversary of the founding of the Peoples
Republic.[33]
The internationalization of the Chinese economy continues to affect the standardized
economic forecast officially launched in China by the Purchasing Managers Index in
2005. At the start of the 2010s, China became the sole Asian nation to have a GDP
(PPP) above the $10-trillion mark (along with the United States and the European
Union).[34] As China's economy grows, so does China's Renminbi, which undergoes the
process needed for its internationalization. [35] The economy of China has recently
initiated Asian Infrastructure Investment Bank in 2015.
Currency
Fiscal year
Trade organisations
GDP
GDP rank
GDP growth
GDP by sector
Inflation (CPI)
2.0% (2014)[5]
6.1% (2013)
Gini coefficient
0.469 (2014)
Labour force
Unemployment
Main 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
Ease-of-doing-business rank
96th[9]
External
Exports
Export goods
Imports
Import goods
Electrical and other machinery, oil and mineral fuels, optical and medical
equipment, metal ores, plastics, organic chemicals
Japan 8.3%
Taiwan 8.0%
United States 7.8%
Australia 5.0%
Germany 4.8% (2013 est.)[12]
FDI stock
Public debt
Revenues
Expenses
Credit rating
AA- (Domestic)
AA- (Foreign)
AA- (T&C Assessment)
(Standard & Poor's)[15]
Foreign reserves
IMF,[19]although China's National Bureau of Statistics rejects this claim. [20] It is the
world's fastest-growing major economy, with growth rates averaging 10% over the past
30 years.[21] Due to
China has been criticized by Western media for unfair trade practices, including
artificial currency devaluation, intellectual property theft, protectionism, and
local favoritism due to one-party oligopoly by the Communist Party of
China with Socialism with Chinese characteristics.[36][37][38][39]
Since initiating market reforms in 1978, China has shifted from a centrally
planned to a market based economy and experienced rapid economic and social
development. GDP growth averaging about 10 percent a year has lifted more than 500
million people out of poverty. All Millennium Development Goals have been reached or
are within reach.
With a population of 1.3 billion, China recently became the second largest economy and
is increasingly playing an important and influential role in the global economy.
Yet China remains a developing country (its per capita income is still a fraction of that in
advanced countries) and its market reforms are incomplete. Official data shows that
about 98.99 million people still lived below the national poverty line of RMB 2,300 per
year at the end of 2012. With the second largest number of poor in the world after India,
poverty reduction remains a fundamental challenge.
Rapid economic ascendance has brought on many challenges as well, including high
inequality; rapid urbanization; challenges to environmental sustainability; and external
HISTORY OF CHINA
The history of China reaches back over 4,000 years. In that time, China has created a
culture rich in philosophy and the arts. China has seen the invention of amazing
technologies such as silk,paper, gunpowder, and many other products.
Over the millennia, China has fought hundreds of wars. It has conquered its neighbors,
and been conquered by them in turn. Early Chinese explorers such as Admiral Zheng
He sailed all the way to Africa; today, China's space program continues this tradition of
exploration.
This snapshot of the People's Republic of China today includes a necessarily brief scan
of China's ancient heritage.
Capital and Major Cities:
Capital:
Beijing, population 11 million.
Major Cities:
million; Hakka, 34 million; Gan, 29 million; Uighur, 7.4 million; Tibetan, 5.3 million; Hui,
3.2 million; and Ping, with 2 million speakers.
Dozens of minority languages also exist in the PRC, including Kazakh, Miao, Sui,
Korean, Lisu, Mongolian, Qiang, and Yi.
Population:
China has the largest population of any country on Earth, with more than 1.35 billion
people.
The government has long been concerned about population growth, and introduced the
"One-Child Policy" in 1979. Under this policy, families were limited to just one child.
Couples who got pregnant for a second time faced forced abortions or sterilization. This
policy was loosened in December of 2013 to allow couples to have two children if one or
both of the parents were only children themselves.
There are exceptions to the policy for ethnic minorities, as well. Rural Han Chinese
families also have always been able to have a second child if the first is a girl or has
disabilities.
Religion:
Under the communist system, religion has been officially discouraged in China. Actual
suppression has varied from one religion to another, and from year to year.
Many Chinese are nominally Buddhist and/or Taoist, but don't practice regularly. People
who self-identify as Buddhist total about 50 per cent, overlapping with the 30 per cent
who are Taoist. Fourteen percent are atheists, four percent Christians, 1.5 per cent
Muslims, and tiny percentages are Hindu, Bon, or Falun Gong adherents.
Most Chinese Buddhists follow Mahayana or Pure Land Buddhism, with smaller
populations of Theravada and Tibetan Buddhists.
Geography:
China's area is 9.5 to 9.8 million square kilometers; the discrepancy is due to border
disputes with India. In either case, its size is second only to Russia in Asia, and is either
third or fourth in the world.
China borders 14 countries: Afghanistan, Bhutan, Burma, India, Kazakhstan, North
Korea,Kyrgyzstan, Laos, Mongolia, Nepal, Pakistan, Russia, Tajikistan, and Vietnam.
From the world's tallest mountain to the coast, and the Taklamakan desert to the jungles
of Guilin, China includes diverse landforms. The highest point is Mt. Everest
(Chomolungma) at 8,850 meters. The lowest is Turpan Pendi, at -154 meters.
Climate:
As a result of its large area and various landforms, China includes climate zones from
subarctic to tropical.
China's northern province of Heilongjiang has average winter temperatures below
freezing, with record lows of -30 degrees Celsius. Xinjiang, in the west, can reach nearly
50 degrees. Southern Hainan Island has a tropical monsoon climate. Average
temperatures there range only from about 16 degrees Celsius in January to 29 in
August.
Hainan receives about 200 centimeters (79 inches) of rain annually. The western
Taklamakan Desert receives only about 10 centimeters (4 inches) of rain and snow per
year.
Economy:
Over the past 25 years, China has had the fastest-growing major economy in the world,
with annual growth of more than 10 per cent. Nominally a socialist republic, since the
1970s the PRC has remade its economy into a capitalist powerhouse.
Industry and agriculture are the largest sectors, producing more than 60 per cent of
China's GDP, and employing over 70 per cent of the work force. China exports $1.2
billion U.S. in consumer electronics, office machinery, and apparel, as well as some
agricultural produce each year.
The per capita GDP is $2,000. The official poverty rate is 10 per cent.
China's currency is the yuan renminbi. As of March 2014, $1 US = 6.126 CNY.
History of China:
Chinese historical records reach back into the realm of legend, 5,000 years ago. It is
impossible to cover even the major events of this ancient culture in a short space, but
here are some highlights.
The first non-mythical dynasty to rule China was the Xia (2200- 1700 BCE), founded by
Emperor Yu. It was succeeded by the Shang Dynasty (1600-1046 BCE), and then
theZhou Dynasty (1122-256 BCE). Historical records are scanty for these ancient
dynastic times.
In 221 BCE, Qin Shi Huangdi assumed the throne, conquering neighboring city-states,
and unifying China. He founded the Qin Dynasty, which lasted only until 206 BCE.
Today, he is best-known for his tomb complex in Xian (formerly Chang'an), which
houses the incredible army of terracotta warriors.
Qin Shi Huang's inept heir was overthrown by the army of commoner Liu Bang in 207
BCE. Liu then founded the Han Dynasty, which lasted until 220 CE. In the Han era,
China expanded west as far as India, opening trade along what would later become
the Silk Road.
When the Han Empire collapsed in 220 CE, China was thrown into a period of anarchy
and turmoil. For the next four centuries, dozens of kingdoms and fiefdoms competed for
power. This era is called the "Three Kingdoms," after the three most powerful of the rival
realms (Wei, Shu, and Wu), but that is a gross simplification.
By 589 CE, the Western branch of the Wei kings had accumulated enough wealth and
power to defeat their rivals, and unite China once more. The Sui Dynasty was founded
by Wei general Yang Jian, and ruled until 618 CE. It built the legal, governmental, and
societal framework for the powerful Tang Empire to follow.
The Tang Dynasty was founded by a general called Li Yuan, who had the Sui emperor
assassinated in 618. The Tang ruled from 618 to 907 CE, and Chinese art and culture
flourished. At the end of the Tang, China descended into chaos again in the "5
Dynasties and 10 Kingdoms" period.
In 959, a palace guard named Zhao Kuangyin took power and defeated the other small
kingdoms. He established the Song Dynasty (960-1279), known for its intricate
bureaucracy and Confucian learning.
In 1271, the Mongolian ruler Kublai Khan (grandson of Genghis) established the Yuan
Dynasty (1271-1368). The Mongols subjugated other ethnic groups including the Han
Chinese, and eventually were overthrown by the ethnic-Han Ming.
China flowered again under the Ming (1368-1644), creating great art and exploring as
far as Africa.
The final Chinese dynasty, the Qing, ruled from 1644 to 1911, when the Last
Emperor was overthrown. Power struggles between warlords such as Sun YatSen touched off the Chinese Civil War. Although the war was interrupted for a decade by
the Japanese invasion and World War II, it picked up again once Japan was
defeated. Mao Zedong and the Communist Peoples Liberation Army won the Chinese
Civil War, and China became the Peoples' Republic of China in 1949. Chiang Kai Shek,
leader of the losing Nationalist forces, fled to Taiwan.
China is the worlds second largest trading nation behind the US leading the world in
exports and coming in second for imports. From 2009-2011ITS TRADE to GDP ratio
was 53.1 percent, while its trade per capita was $2,413.
Since its accession into the WTO in 2001, Chinas share inGLOBAL TRADE has
doubled accounting for 10.38 percent of the worlds merchandise trade exports and
9.43 percent of merchandise trade imports.
For many countries around the world, China is rapidly becoming their most important
bilateral trade partner. In 2011, they were the largest exporting/importing partner for 32
and 34 countries respectively.
However, there have been concerns over large trade imbalances between China and
the rest of the world. The US in particular has the largest trade deficit in the world with
China at $315 billion, more than three times what it was a decade ago.
There have also been a growing number of trade disputes brought against, mainly for
dumping, unfair subsidies by the Chinese government, intellectual property and the
valuation of the yuan. Nonetheless its WTO entry ensures that the country will remain a
key figure in international trade.
Domestically, the Chinese government has been keen to reduce the economys reliance
on exports and focus on internal consumption. In March 2013, Chinas new leadership
announced that they would move to recalibrate the economy, acknowledging that there
is a growing conflict between downward pressure on economic growth and excess
production capacity.
Chinas Import and Export Indicators and Statistics at a Glance
(2012)
Total value of exports: US$2.05 trillion
Primary exports - commodities: electrical and other machinery, including data
processing equipment, apparel, radio telephone handsets, textiles, integrated circuits
Primary exports partners: US (17.2 of total exports), Hong Kong (15.8 percent),
Japan (7.4 percent), South Korea (4.3 percent), Germany (3.4 percent)
Total value of imports: US$1.817 trillion
Primary imports - commodities: electrical and other machinery, oil and mineral
fuels, optical and medical equipment, metal ores, motor vehicles
Primary imports partners: Japan (9.8 percent of total imports), South Korea (9.3
percent), US (7.3 percent), Germany (5.1 percent), Australia (4.6 percent)
Pak-CHINA
by Dr. Noor Ahmed Memon
TRADE Relations
China and Pakistan are close and friendly neighbors. Pakistan has treated
China as its most important economic partners. Rapid economic
development in China and consequent inter-regional activity has caused
increased demand for raw materials, exchange of parts, components,
intermediate products and development of cross country production works
and processes. Consistent growth in economic relations amplifies the
strength of their relationship. China and Pakistan also have witnessed steady
growth in mutual investments in recent years. The Chinese have invested in
Pakistan in telecommunications, energy, infrastructure, heavy engineering,
IT, mining and defense related industries.
Pakistan and China are already co-operating closely in the development of
Gwadar Port, which would help economic activity in Pakistan and provide an
important access route to the sea for Chinas Western regions, Afghanistan
and Central Asian states. A large number of important projects such as the
up-gradation of Karakoram Highway, Thar Coal Mining, up-gradation of
Pakistan Railways and Power Generation Projects both nuclear and nonnuclear are some of the examples of this expanding economic
cooperation.
Free Trade Agreement: Pakistan and China signed a Free Trade Agreement
in 2006. The base year for tariff reduction/elimination for China was 2006
and for Pakistan fiscal year of 2006-2007. Pakistan received market access
at zero duty on industrial alcohol, cotton fabrics, bed-linen and other home
textiles and other goods. China also reduced its tariff by 50% on knitwear
and woven garments.
Bilateral trade had reached US$ 5.79 billion in 2011. The balance is,
however, in favour of China. The balance of trade increased from US$ 2.34
billion in 2007-08 to US$ 2.5 billion in 2010-11. Important factor of trade
deficit with China is growing exports of Chinese products to Pakistan
including raw materials and capital goods. Since these are more economical,
businessmen are inclined to buy more from China.
Pakistan, therefore, should be looking at China not simply as an export
market, but as a primary source for import of capital goods and industrial
raw material. Table-1 shows trade balance between Pakistan and China. It
is however encouraging that over the last five years, average rate of growth
in exports from Pakistan has been 33% while average increase inIMPORTS
FROM CHINA was 19%. Pakistan and China will enter Phase II of FTA in
2013 when the present FTA will conclude by the end of 2012.
Table 1: Pak-China Trade
(Value:
US $ Million)
Year
Exports
Imports
Trade
Balance
2005 - 06
437
1,843
- 1,406
2006 - 07
548
2,321
- 1,773
2007 - 08
685
3,029
- 2,344
2008-09
661
2,708
- 2,344
2009-0
1,211
3,284
- 2,073
2010-11
1,645
4,145
- 2,500
88,993
100,653
10,007
14,914
188,202
39,399
42,886
Machinery Preparing
Textile Fibre
199,184
13,972
197,058
Textile Spinning
Machines
539,225
362,621
255,450
150,323
157,077
75,867
6,682
9,775
2,607
14,702
25,485
14,954
Textile Winding
Machines
44,719
13,521
57,958
113,036
125,080
Carding Machines
Drawing / Roving
Machines
Blow Room Machinery
133,425
35,565
719,60
Weaving (Shuttleless
Looms)
423,171
247,477
31,612
27,467
1,978
17,039
10,307
14,347
46,393
90,008
71,256
93,364
45,740
28,590
160,698
111,912
73,495
136,572
105,356
101,134
Spindles Textile
Machines
275,938
179,627
2,527
Spinning Rings
189,986
194,141
142,540
30,453
48,813
39,270
197,056
157,582
93,322
9,667
5,915
11,068
109,661
71,506
43,862
Dobbies Jacquards
Top and Flat Card
Clothing
Other Card Clothing
Shuttles
Parts of Weaving
Machinery
2009-10
Raw Cotton
75,819
29,836
Cotton Yarn
914,594
634,029
Cotton Fabrics
137,339
77,474
Knitted Fabrics
1,264
87
Ready made
garments
2,654
1,019
Textile made
ups
3,359
1,519
Bed wear
16,349
7,422
Tents and
Canvas
347
--
Synthetics
textiles
2,035
2,140
Leather Tanned
47,862
41,891
Leather gloves
158
128
1,177
1,101
Item
Sports goods
599
259
3,194
2,163
18,067
2,037
6,892
3,342
267
28
Chemical and
its products
61,609
22,809
Marble and
Stone
30,677
15,760
Surgical
instruments
Petroleum and
its products
Fruits
Vegetables