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China:
Economy

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Economy - overview
Definition
China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion, including the sale of minority shares in four of China's largest state banks to foreign investors and refinements in foreign exchange and bond markets in 2005. After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg reached 15% in January 2008. 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, China in 2007 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income. Annual inflows of foreign direct investment in 2007 rose to $75 billion. By the end of 2007, more than 5,000 domestic Chinese enterprises had established direct investments in 172 countries and regions around the world. The Chinese government faces several economic development challenges: (a) to sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) to reduce corruption and other economic crimes; and (c) to contain environmental damage and social strife related to the economy's rapid transformation. Economic development has been more rapid in coastal provinces than in the interior, and approximately 200 million rural laborers have relocated to urban areas to find work. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north - is another long-term problem. China continues to lose arable land because of erosion and economic development. In 2007 China intensified government efforts to improve environmental conditions, tying the evaluation of local officials to environmental targets, publishing a national climate change policy, and establishing a high level leading group on climate change, headed by Premier WEN Jiabao. The Chinese government seeks to add energy production capacity from sources other than coal and oil as its double-digit economic growth increases demand. Chinese energy officials in 2007 agreed to purchase five third generation nuclear reactors from Western companies. More power generating capacity came on line in 2006 as large scale investments - including the Three Gorges Dam across the Yangtze River - were completed.
GDP (purchasing power parity)
Definition - World rank and map
$6.991 trillion (2007 est.)
GDP (official exchange rate)
Definition
$3.251 trillion (2007 est.)
GDP - real growth rate
Definition - World rank and map
11.4% (2007 est.)
GDP - per capita
Definition - World rank and map
$5,300 (2007 est.)
GDP - composition by sector
Definition
agriculture: 11.3%
industry: 48.6%
services: 40.1% (2007 est.)
Labor force
Definition
803.3 million (2007 est.)
Labor force - by occupation
Definition
agriculture: 43%
industry: 25%
services: 32% (2006 est.)
Unemployment rate
Definition - World rank and map
4% unemployment in urban areas; substantial unemployment and underemployment in rural areas (2007 est.)
Population below poverty line
Definition
8%
note: 21.5 million rural population live below the official "absolute poverty" line (approximately $90 per year); and an additional 35.5 million rural population above that but below the official "low income" line (approximately $125 per year) (2006 est.)
Household income or consumption by percentage share
Definition
lowest 10%: 1.6%
highest 10%: 34.9% (2004)
Distribution of family income - Gini index
Definition - World rank and map
47 (2007)
Inflation rate (consumer prices)
Definition - World rank and map
4.8% (2007 est.)
Investment (gross fixed)
Definition - World rank and map
40.4% of GDP (2007 est.)
Budget
Definition
revenues: $674.3 billion
expenditures: $651.6 billion (2007 est.)
Public debt
Definition - World rank and map
18.4% of GDP (2007 est.)
Agriculture - products
Definition
rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish
Industries
Definition
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
Definition - World rank and map
13.4% (2007 est.)
Electricity - production
Definition - World rank and map
3.256 trillion kWh (2007)
Electricity - consumption
Definition - World rank and map
2.859 trillion kWh (2006)
Electricity - consumption per capita
Definition - World rank and map
2,149.6 kWh (2006)
Electricity - exports
Definition
11.27 billion kWh (2006)
Electricity - imports
Definition
5.39 billion kWh (2006)
Oil - production
Definition - World rank and map
3.73 million bbl/day (2007 est.)
Oil - consumption
Definition - World rank and map
6.93 million bbl/day (2007 est.)
Oil - consumption per 1,000 people
Definition - World rank and map
5.2 bbl/day (2007 est.)
Oil - exports
Definition - World rank and map
79,060 bbl/day (2007)
Oil - imports
Definition - World rank and map
3.19 million bbl/day (2007)
Oil - proved reserves
Definition - World rank and map
12.8 billion bbl (2007 est.)
Natural gas - production
Definition - World rank and map
58.6 billion cu m (2006 est.)
Natural gas - consumption
Definition - World rank and map
55.6 billion cu m (2006 est.)
Natural gas - consumption per capita
Definition - World rank and map
42 cu m (2006 est.)
Natural gas - exports
Definition - World rank and map
2.874 billion cu m (2006)
Natural gas - imports
Definition - World rank and map
976 million cu m (2006)
Natural gas - proved reserves
Definition - World rank and map
2.45 trillion cu m (2006 est.)
Current account balance
Definition - World rank and map
$360.7 billion (2007 est.)
Exports
Definition - World rank and map
$1.217 trillion f.o.b. (2007 est.)
Exports - commodities
Definition
machinery, electrical products, data processing equipment, apparel, textile, steel, mobile phones
Exports - partners
Definition
US 19.4%, Hong Kong 15.2%, Japan 8.4%, South Korea 4.6%, Germany 4.1% (2006)
Imports
Definition - World rank and map
$901.3 billion f.o.b. (2007 est.)
Imports - commodities
Definition
machinery and equipment, oil and mineral fuels, plastics, LED screens, data processing equipment, optical and medical equipment, organic chemicals, steel, copper
Imports - partners
Definition
Japan 13.9%, South Korea 11%, Taiwan 10.6%, US 7.5%, Germany 4.7% (2006)
Reserves of foreign exchange and gold
Definition - World rank and map
$1.534 trillion (31 December 2007 est.)
Debt - external
Definition - World rank and map
$363 billion (31 December 2007 est.)
Stock of direct foreign investment - at home
Definition
$758.9 billion (2007 est.)
Stock of direct foreign investment - abroad
Definition
$93.75 billion (2007 est.)
Market value of publicly traded shares
Definition
$4.477 trillion (31 December 2007 est.)
Economic aid - recipient
Definition
$1.641 billion (FY07)
Currency (code)
Definition
Renminbi (RMB); note - also referred to by the unit yuan (CNY)
Exchange rates
Definition
yuan per US dollar - 7.61 (2007), 7.97 (2006), 8.1943 (2005), 8.2768 (2004), 8.277 (2003)
Fiscal year
Definition
calendar year


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