About China and Key Financial Statistics
About China and Key Financial Statistics
Overview of Economy:
Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - 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, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. 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 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, in July 2005 China 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. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate.
The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2014 more than 274 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control 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. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development.
Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.
Gross Domestic Product (In USD):
$18.09 trillion (2014 est.)
$16.86 trillion (2013 est.)
$15.65 trillion (2012 est.)
Composition of Gross Domestic Product:
% Agricuture: 9.2
% Industry: 42.7
% Services: 48.1
Composition of Labor Force by Occupation:
% Agriculture: 33.6
% Industry: 30.3
% Services: 36.1
Per Capita Income:
$13,200 (2014 est.)
$12,300 (2013 est.)
$11,400 (2012 est.)
Exports:
$2.343 trillion (2014 est.)
$2.209 trillion (2013 est.)
Key Export Commodities:
electrical and other machinery, including data processing equipment, apparel, furniture, textiles, integrated circuits
Export Partners:
US 16.9%, Hong Kong 15.5%, Japan 6.4%, South Korea 4.3% (2014 est.)
Imports:
$1.96 trillion (2014 est.)
$1.95 trillion (2013 est.)
Key Import Commodities:
electrical and other machinery, oil and mineral fuels; nuclear reactor, boiler, and machinery components; optical and medical equipment, metal ores, motor vehicles; soybeans
Import Partners:
South Korea 9.7%, Japan 8.3%, US 8.1%, Taiwan 7.8%, Germany 5.4%, Australia 5% (2014 est.)
Inflation Rate (Consumer Price Index):
2% (2014 est.)
2.6% (2013 est.)
Exchange Rate to USD:
Renminbi yuan (RMB) per US dollar -
6.1434 (2014 est.)
6.1434 (2013 est.)
6.31 (2012 est.)
6.4615 (2011 est.)
6.7703 (2010 est.)
Unemployment Rate:
4.1% (2014 est.)
4.1% (2013 est.)
S&P Rating:
Standard & Poor's Ratings:
AAA: The best quality borrowers, reliable and stable
AA: Quality borrowers, a bit higher risk than AAA
A: Economic situation can affect finance
BBB: Medium class borrowers, which are satisfactory at the moment
BB: More prone to changes in the economy
B: Financial situation varies noticeably
CCC: An obligor rated currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.
Ref 2012-2014: CIA World Factbook, Wikipedia, PWC, EY, Standard & Poors ratings
