China Economy
Economy - overviewIn late 1978 the Chinese leadership began moving the economy from a sluggish, inefficient, Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprises in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2003 stood as the second-largest economy in the world after the US, although in per capita terms the country is still poor. Agriculture and industry have posted major gains especially in coastal areas near Hong Kong, opposite Taiwan, and in Shanghai, where foreign investment has helped spur output of both domestic and export goods. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (growing income disparities and rising unemployment). China thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) sustain adequate jobs growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, many of which had been shielded from competition by subsidies and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. Another long-term threat to growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Beijing says it will intensify efforts to stimulate growth through spending on infrastructure - such as water supply and power grids - and poverty relief and through rural tax reform. Accession to the World Trade Organization helps strengthen its ability to maintain strong growth rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. China has benefited from a huge expansion in computer internet use. Foreign investment remains a strong element in China's remarkable economic growth. Growing shortages of electric power and raw materials will hold back the expansion of industrial output in 2004.
GDP
purchasing power parity - $6.449 trillion (2003 est.)
GDP - real growth rate
9.1% (official data) (2003 est.)
GDP - per capita
purchasing power parity - $5,000 (2003 est.)
GDP - composition by sector
agriculture: 14.8%
industry and construction: 52.9%
services: 32.3% (2003)
Investment
43.4% of GDP (2003)
Population below poverty line
10% (2001 est.)
Household income or consumption by percentage share
lowest 10%: 2.4%
highest 10%: 30.4% (1998)
Distribution of family income - Gini index
40 (2001)
Inflation rate
1.2% (2003 est.)
Labor force
778.1 million (2003 est.)
Labor force - by occupation
agriculture 50%, industry 22%, services 28% (2001 est.)
Unemployment rate
10.1% urban unemployment roughly 10%; substantial unemployment and underemployment in rural areas (2003 est.)
Budget
revenues: $265.8 billion
expenditures: $300.2 billion, including capital expenditures of $NA (2003)
Public debt
30.1% of GDP (2003)
Agriculture - products
rice, wheat, potatoes, sorghum, peanuts, tea, millet, barley, cotton, oilseed, pork, fish
Industries
iron and steel, coal, machine building, armaments, textiles and apparel, petroleum, cement, chemical fertilizers, footwear, toys, food processing, automobiles, consumer electronics, telecommunications
Industrial production growth rate
30.4% (2003 est.)
Electricity - production
1.42 trillion kWh (2001)
Electricity - consumption
1.312 trillion kWh (2001)
Electricity - exports
10.3 billion kWh (2001)
Electricity - imports
1.8 billion kWh (2001)
Oil - production
3.3 million bbl/day (2001 est.)
Oil - consumption
4.57 million bbl/day (2001 est.)
Oil - exports
151,200 bbl/day (2001)
Oil - imports
1.207 million bbl/day (2001)
Oil - proved reserves
26.75 billion bbl (1 January 2002)
Natural gas - production
30.3 billion cu m (2001 est.)
Natural gas - consumption
27.4 billion cu m (2001 est.)
Natural gas - exports
0 cu m (2001 est.)
Natural gas - imports
0 cu m (2001 est.)
Natural gas - proved reserves
1.29 trillion cu m (1 January 2002)
Current account balance
$31.17 billion (2003)
Exports
$436.1 billion f.o.b. (2003 est.)
Exports - commodities
machinery and equipment, textiles and clothing, footwear, toys and sporting goods, mineral fuels
Exports - partners
US 21.1%, Hong Kong 17.4%, Japan 13.6%, South Korea 4.6%, Germany 4% (2003)
Imports
$397.4 billion f.o.b. (2003 est.)
Imports - commodities
machinery and equipment, mineral fuels, plastics, iron and steel, chemicals
Imports - partners
Japan 18%, Taiwan 11.9%, South Korea 10.4%, US 8.2%, Germany 5.9% (2003)
Reserves of foreign exchange & gold
$412.7 billion (2003)
Debt - external
$197.8 billion (2003 est.)
Currency
yuan (CNY)
note:: also referred to as the Renminbi (RMB)
Currency code
CNY
Exchange rates
yuan per US dollar - 8.277 (2003), 8.277 (2002), 8.2771 (2001), 8.2785 (2000), 8.2783 (1999)
