Economy of China
China has an upper middle income developing mixed socialist market economy that incorporates industrial policies and strategic five-year plans.[32] It is the world's second largest economy by nominal GDP, and the world's largest economy since 2016 when measured by purchasing power parity (PPP).[n 1][33] Due to a volatile currency exchange rate, China's GDP as measured in dollars fluctuates sharply.[34] China accounted for 18.6% of global economy in 2022 in PPP terms,[35][36] and around 18% in nominal terms in 2022.[35][37] Historically, China was one of the world's foremost economic powers for most of the two millennia from the 1st until the 19th century.[38][39] The economy consists of public sector enterprise, state-owned enterprises (SOEs) and mixed-ownership enterprises, as well as a large domestic private sector and openness to foreign businesses in a system. It recently overtook the economy of the European Union in 2021.[40] Private investment and exports are the main drivers of economic growth in China; but, in recent years, the Chinese government has been emphasising domestic consumption.[41]
Shanghai, the financial center of China | |
| Currency | Renminbi (CNY, ¥) |
|---|---|
| Calendar year | |
Trade organizations | WTO, BRICS, SCO, APEC, RCEP, G-20, G77 and others |
Country group |
|
| Statistics | |
| Population | 1,411,750,000 (31 December 2022 est.) |
| GDP | |
| GDP rank | |
GDP growth | |
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
GDP by component |
|
| 2.8% (2022)[3] | |
Population below poverty line | |
| 38.2 medium (2019)[9][note 2] | |
Labor force | |
Labor force by occupation |
|
| Unemployment | |
Average gross salary | ¥8,904 (US$1380) per month, 2021 |
| ¥6,841 (US$1060) per month, 2021 | |
| Gross savings | 46.395% of GDP (2022)[16] |
| 10-Year Bond 2.831% (April 2023)[17] | |
Main industries |
|
| 31st (very easy, 2020)[20] | |
| External | |
| Exports | $3.593 trillion (2022)[21] |
Export goods |
|
Main export partners |
|
| Imports | $2.716 trillion (2022)[21] |
Import goods |
|
Main import partners |
|
FDI stock | |
Gross external debt | $2.64 trillion (June 2022)[24] (14.39% of GDP) |
| Public finances | |
| |
| |
| Revenues | ¥30.624 trillion[16] 24.8% of GDP (2022) |
| Expenses | ¥41.591 trillion[16] 33.7% of GDP (2022) |
| $3.3 trillion (December 2022)[30][31] (1st) | |
China is the world's largest manufacturing economy and exporter of goods.[42] It is also the world's fastest-growing consumer market and second-largest importer of goods.[43] China is also the world's largest consumer of numerous commodities, and accounts for about half of global consumption of metals.[44] China is a net importer of services products.[45] It is the largest trading nation in the world and plays a prominent role in international trade.[46][47] China is the largest recipient of foreign direct investment in the world as of 2020, receiving inflows of $163 billion.[48] It has the second largest outward foreign direct investment, at US$136.91 billion for 2019 alone, following Japan at US$226.65 billion for the same period.[49] As of 2022, China was second in the world in total number of billionaires.[50] In 2018, it was second in millionaires with 3.5 million.[51] According to the 2019 Global Wealth Report by Credit Suisse Group, China surpassed the US in the wealth of the top ten percent of the world's population.[52][note 4] China has the world's largest foreign-exchange reserves worth $3.1 trillion,[53] but if the foreign assets of China's state-owned commercial banks are included, the value of China's reserves rises to nearly $4 trillion.[54] China faced a mild economic slowdown during the 2007–2008 financial crisis and initiated a massive stimulus package, which helped to regain its economic growth.
With 778 million workers, the Chinese labor force was the world's largest as of 2020. It ranks 28th on the Global Competitiveness Report.[55] Per the Global Innovation Index in 2022, China was ranked 11th in the world, 3rd in Asia & Oceania region and 2nd for countries with a population of over 100 million. It is the only middle-income economy and the only newly industrialized economy in the top 30.[56][57] It is often ranked among the world's most innovative countries, leading several measures of global patent filings.[58][59] China has the second-largest financial assets in the world, valued at $17.9 trillion as of 2021.[60] It also has two (Shenzhen-Hong Kong-Guangzhou and Beijing in the 2nd and 3rd spots respectively) of the global top 5 science and technology clusters, which is more than any other country.[56][61] As of March 2022, China has over 500 million 5G users and 1.45 million base stations installed.[62][63] Almost 493 million Chinese people are categorised as middle class, and 242 million are upper middle class, according to a 2021 Pew Research Center survey.[64] In 2022, mainland China's ten largest trading partners were European Union, United States, South Korea, Japan, Taiwan, Hong Kong, Vietnam, Australia, Malaysia, and Russia.[65]
China has free trade agreements with many nations, some of which are already in force (such as RCEP, the largest trading bloc in history) or are still in the negotiation phase.[66] Although widely regarded as the "powerhouse of manufacturing" or "the factory of the world",[67] exports contribute only a comparatively small proportion of the Chinese economy, at just 18.5% in 2020. Of the world's 500 largest companies, 145 are headquartered in China.[68] It has four of the world's top ten most competitive financial centers[69] and three of the world's ten largest stock exchanges (both by market capitalization and by trade volume).[70] China's economy is both a contributor to rising global greenhouse gas (GHG) emissions causing climate change and severely affected by its adverse impacts, although its per capita emissions are still much lower than developed economies such as the United States.[71]
History
Historically, China was one of the world's foremost economic powers for most of the two millennia from the 1st until the 19th century.[38][72][73][74][75] China accounted for around one-quarter of the global GDP until the late 1700s and approximately one-third of the global GDP in 1820 as the Industrial Revolution was beginning in Great Britain.[76][77][78][79] China's GDP in 1820 was six times as large as Britain's, the largest economy in Europe – and almost twenty times the GDP of the nascent United States.[80]
The government began its economic reforms in 1978 under the leadership of Deng Xiaoping.[5][81] As a result, China has the world's fastest-growing major economy, with growth rates averaging 10% over 30 years.[82][83] Currently, many scholars consider the Chinese economic model as an example of authoritarian capitalism,[84][85] state capitalism[86] or party-state capitalism.[87][88]
China sustained growth due to export relations, its manufacturing sector, and low-wage workers.[5] It is the only major economy to have avoided the COVID-19 economic decline.[5] However, China posted one of its worst economic performances in decades because of Covid in 2022.[89] In 2023, IMF predicted China to continue being one of the fastest growing major economies.[4]
Wealth in China
China has had the world's largest middle class population since 2015,[90] and the middle class grew to a size of 400 million by 2018[91] and is projected to reach 1.2 billion by 2027, making up one fourth of the world total.[92] As of 2018, China was first in the world in total number of billionaires and second in millionaires – there were 658 Chinese billionaires[93] and 3.5 million millionaires.[94] In 2019, China overtook the US as the home to the highest number of rich people in the world, according to the global wealth report by Credit Suisse.[95][96] In other words, as of 2019, a hundred million Chinese are in the top ten percent of the wealthiest individuals in the world – those who have a net personal wealth of at least $110,000.[97] In 2020, China has the world's highest number of billionaires, which is more than the US and India combined,[98] and as of March 2021, the number of billionaires in China reach 1,058 with the combined wealth of US$4.5 trillion.[99] According to the Hurun Global Rich List 2021, China is home to six of the world's top ten cities (Beijing, Shanghai, Shenzhen, Hong Kong, Hangzhou and Guangzhou in the 1st, 2nd, 4th, 5th, 8th and 9th spots, respectively) by the highest number of billionaires, which is more than any other country.[99] As of January 2021, China had 85 female billionaires, two-thirds of the global total.[100]
According to the IMF, on a per capita income basis, China ranked 59th by GDP (nominal) and 73rd by GDP (PPP) in 2020.[101][102] China ranked 3rd by GDP per capita (nominal) and 5th by GDP per capita (PPP) among countries with a population of over 100 million.
State-owned enterprises
China's SOEs perform important functions that benefit the state.[103] Academic Wendy Leutert writes, "They contribute to central and local governments revenues through dividends and taxes, support urban employment, keep key input prices low, channel capital towards targeted industries and technologies, support sub-national redistribution to poorer interior and western provinces, and aid the state's response to natural disasters, financial crises and social instability."[103]
As of 2017, China has more SOEs than any other country, and the most SOEs among large national companies.[103]
State-owned enterprises accounted for over 60% of China's market capitalization in 2019[104] and generated 40% of China's GDP of US$15.98 trillion dollars (101.36 trillion yuan) in 2020, with domestic and foreign private businesses and investment accounting for the remaining 60%.[105][106] As of the end of 2019, the total assets of all China's SOEs, including those operating in the financial sector, reached US$58.97 trillion In 2015.[107] Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies.[108]
Regional economies for China
China's unequal transportation system, combined with important differences in the availability of natural and human resources and in industrial infrastructure, has produced significant variations in the regional economies of China.[109]
Economic development has generally been more rapid in coastal provinces than in the interior and there are large disparities in per capita income between regions. The three wealthiest regions are the Yangtze River Delta in East China; the Pearl River Delta in South China; and Jingjinji region in North China. It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions. By 2035, China's four cities (Shanghai, Beijing, Guangzhou and Shenzhen) are projected to be among the global top ten largest cities by nominal GDP according to a report by Oxford Economics.[110]
GDP by administrative division
| preliminary estimation; average rate: CN¥ 6.3527 per U.S. dollar | |||||
|---|---|---|---|---|---|
| Provinces / SARs | Rank | GDP (CN¥) | Nominal GDP (US$) | ||
| China (mainland) | 113,774.31[113] | 17,909.60[113] | |||
| Guangdong | 1 | 12,369.67 | 1,947.15 | ||
| Jiangsu | 2 | 11,636.42 | 1,831.73 | ||
| Shandong | 3 | 8,309.59 | 1,308.04 | ||
| Zhejiang | 4 | 7,351.58 | 1,157.23 | ||
| Henan | 5 | 5,888.74 | 926.97 | ||
| Sichuan | 6 | 5,385.08 | 847.68 | ||
| Hubei | 7 | 5,001.29 | 787.27 | ||
| Fujian | 8 | 4,881.04 | 768.34 | ||
| Hunan | 9 | 4,606.31 | 725.09 | ||
| Shanghai | 10 | 4,321.48 | 680.27 | ||
| Anhui | 11 | 4,295.92 | 676.23 | ||
| Hebei | 12 | 4,039.13 | 635.81 | ||
| Beijing | 13 | 4,026.96 | 633.90 | ||
| Shaanxi | 14 | 2,980.09 | 469.11 | ||
| Jiangxi | 15 | 2,961.97 | 466.25 | ||
| Chongqing | 16 | 2,789.40 | 439.09 | ||
| Liaoning | 17 | 2,758.41 | 434.21 | ||
| Yunnan | 18 | 2,714.68 | 427.33 | ||
| Guangxi | 19 | 2,474.09 | 389.45 | ||
| Hong Kong | 20 | 2,385.29 | 369.72 | ||
| Shanxi | 21 | 2,259.02 | 355.60 | ||
| Inner Mongolia | 22 | 2,051.42 | 322.92 | ||
| Guizhou | 23 | 1,958.64 | 308.32 | ||
| Xinjiang | 24 | 1,598.37 | 251.60 | ||
| Tianjin | 25 | 1,569.51 | 247.06 | ||
| Heilongjiang | 26 | 1,487.92 | 234.22 | ||
| Jilin | 27 | 1,323.56 | 208.35 | ||
| Gansu | 28 | 1.024.33 | 161.24 | ||
| Hainan | 29 | 647.52 | 101.92 | ||
| Ningxia | 30 | 452.23 | 71.19 | ||
| Qinghai | 31 | 334.66 | 52.68 | ||
| Tibet | 32 | 208.02 | 32.75 | ||
| Macau | 33 | 188.51 | 29.22 | ||
Hong Kong and Macau
In accordance with the One country, two systems policy, the economies of the former British colony of Hong Kong and Portuguese colony of Macau are separate from the rest of China and each other. Both Hong Kong and Macau are free to conduct and engage in economic negotiations with foreign countries, as well as participating as full members in various international economic organizations such as the World Customs Organization, the World Trade Organization and the Asia-Pacific Economic Cooperation forum, often under the names "Hong Kong, China" and "Macau, China".[citation needed]
Development
The economic reforms implemented in 1978 helped to propel China into the ranks of the world's major economic powers. The economic development of Shenzhen has caused the city to be referred to as the world's next Silicon Valley.[115][116][117][118] The provinces in the coastal regions of China[119] tend to be more industrialized while regions in the hinterland are less developed.
To guide economic development, the Chinese central government adopts "five-year plans" that detail its economic priorities and essential policies. The Fourteenth Five-Year Plan (2021–2025) is currently being implemented, placing an emphasis on consumption-driven growth and technological self-sufficiency while China transitions from being an upper middle-income economy to a high-income economy.[121] The public sector plays a central role in China's economy.[122] This development is also in line with the planning goals of the Chinese central government to achieve the "Two Centenaries", namely the material goal of China becoming a "moderately prosperous society in all respects" by 2021 and the modernization goal of China becoming a "fully developed nation" by 2049, the 100th anniversary of the founding of the People's Republic.[123]
Like Japan and South Korea before it, China's economy has grown rapidly, raising the income levels and living standards of its citizens while producing goods that are consumed globally. Between 1981 and 2019, the percentage of the population living in extreme poverty decreased from 88.1% to 0.2%.[7] Its current account surplus increased by a factor of 53 between 1982 and 2015, from $5.7 billion to $304 billion.[124] During this time, China also became an industrial powerhouse, moving beyond initial successes in low-wage sectors like clothing and footwear to the increasingly sophisticated production of computers, pharmaceuticals, and automobiles. China's factories generated $3.7 trillion real manufacturing value added, more than the US, South Korea, Germany and the UK combined. China's manufacturing sector benefits from the world's largest domestic market, immense manufacturing scale, and highly developed manufacturing supply chains.[125]
In mid-2014 China announced it was taking steps to boost the economy, which at the time was running at a rate 7.4% per annum, but was slowing. The measures included plans to build a multi-tier transport network, comprising railways, roads and airports, to create a new economic belt alongside the Yangtze River.[126] In 2021, it was reported that China's GDP could continue to grow on an average of 5.9% annually until 2025, according to the Centre for Economic and Business Research, which also predicts that China will overtake the US economy by the end of the decade.[127]
Disputes over economic data
There exists disputes over reliability of official economic data. Foreign and some Chinese sources have claimed that official Chinese government statistics overstate China's economic growth.[128] However, several Western academics and institutions have stated that China's economic growth is higher than indicated by official figures.[129] Others, such as the Economist Intelligence Unit, state that while there's evidence China's GDP data is "smoothed", they believe that China's nominal and real GDP data are broadly accurate.[130]
Overestimating
Chinese provinces and cities have long been suspected of cooking their numbers, with the focus on local government officials, whose performance are often assessed based on how well their respective economies have performed.[131] In recent years, China claimed growth numbers have come under increased scrutiny, with both domestic and international observers alleging the government has been inflating its economic output.[128][132]
A 2015 survey by The Wall Street Journal of 64 select economists found that 96% of respondents think China's GDP estimates don't "accurately reflect the state of the Chinese economy."[133] However, more than half the economists in the survey estimated that China's annual growth was somewhere in the 5% to 7% range, which represents robust growth. Chinese premier Li Keqiang has said he is far from confident in the country's GDP estimates, calling them "man-made" and unreliable, according to a leaked document from 2007 obtained by WikiLeaks. He said government data releases, especially the GDP numbers, should be used "for reference only".[134]
Analysts like Wilbur Ross and Donald Straszheim believe China's recent economic growth has been overstated, and estimate a growth rate at around 4% or less.[135] According to Chang-Tai Hsieh, an economist at the University of Chicago Booth School of Business and research associate at the National Bureau of Economic Research, Michael Zheng Song, an economics professor at the Chinese University of Hong Kong, and coauthors, China's economy was smaller than what the Chinese government stated in 2016. In their research paper, published by the Brookings Institution, they adjusted the historical GDP time series using value-added tax data, which they said are "highly resistant to fraud and tampering".[136][137] They found that China's economic growth may have been overstated by 1.7 percent each year between 2008 and 2016, meaning that the government may have been overstating the size of the Chinese economy by 12–16 percent in 2016.[137][138]
Issues with underestimating
Several Western academics and institutions have supported the claim that China's economy is likely to be underestimated.[139][140][141][129][142][143][144] A paper by the US-based National Bureau of Economic Research claimed that China's economic growth may be higher than what is reported by official statistics.[145] An article by Hunter Clarka, Maxim Pinkovskiya and Xavier Sala-i-Martin published by the Elsevier Science Direct in 2018 employs an innovative method of satellite-recorded nighttime lights, which the authors claim to be a best-unbiased predictor of the economic growth in Chinese cities. The results suggest that the Chinese economic growth rate is higher than the official reported data.[139]
The Li Keqiang index is an alternative measurement of Chinese economic performance that uses three variables Li preferred.[146] Satellite measurements of light pollution are used by some analysts to model Chinese economic growth and suggest recent growth rate numbers in Chinese official data are more reliable although are likely to be smoothed.[147] According to an article by the Federal Reserve Bank of St. Louis, China's official statistics are of a high quality compared to other developing, middle-income and low-income countries. In 2016, China was at the 83rd percentile of middle and low-income countries, up from the 38th percentile in 2004.[148] A study by the Federal Reserve Bank of San Francisco found that China's official GDP statistics are "significantly and positively correlated" with externally verifiable measures of economic activity such as import and export data from China's trade partners, suggesting that China's economic growth was no slower than the official figures indicated.[129]
The study by Daniel Rosen and Beibei Bao, published by the Center for Strategic and International Studies in 2015, showed that GDP in 2008 was actually 13–16 percent bigger than the official data, while 2013 GDP was accurately at $10.5 trillion rather than the official figure at $9.5 trillion.[142] According to a research conducted by Arvind Subramanian, a former economist at the International Money Fund (IMF) and a senior fellow at the Peterson Institute for International Economics, the size of the Chinese economy by Purchasing Power Parity in 2010 was about $14.8 trillion rather than an official estimate at $10.1 trillion by IMF, meaning that China's GDP was underestimated by 47 percent.[149]
Regional development
| The East Coast (w/ existing development programmes) | ||
| "Rise of Central China" | ||
| "Revitalize Northeast China" | ||
| "China Western Development" | ||
These strategies are aimed at the relatively poorer regions in China in an attempt to prevent widening inequalities:
- China Western Development, designed to increase the economic situation of the western provinces through investment and development of natural resources.
- Revitalize Northeast China, to rejuvenate the industrial bases in Northeast China. It covers the three provinces of Heilongjiang, Jilin, and Liaoning, as well as the five eastern prefectures of Inner Mongolia.
- Rise of Central China Plan, to accelerate the development of its central regions. It covers six provinces: Shanxi, Henan, Anhui, Hubei, Hunan, and Jiangxi.
- Third Front, focused on the southwestern provinces.
Foreign investment abroad:
- Go Global, to encourage its enterprises to invest overseas.
Macroeconomic trends
The following table shows the main economic indicators in 1980–2021 (with IMF staff stimtates in 2022–2027). Inflation below 5% is in green.[150]
| Year | GDP (in Bil. US$PPP) | GDP per capita (in US$ PPP) | GDP (in Bil. US$nominal) | GDP per capita (in US$ nominal) | GDP growth (real) | Inflation rate (in Percent) | Unemployment (in Percent) | Government debt (in % of GDP) |
|---|---|---|---|---|---|---|---|---|
| 1980 | 302.8 | 306.7 | 303.0 | 307.0 | 7.9% | n/a | 4.9% | n/a |
| 1981 | 348.3 | 348.1 | 288.7 | 288.5 | 5.1% | 2.5% | 3.8% | n/a |
| 1982 | 403.1 | 396.6 | 284.6 | 280.0 | 9.0% | 2.0% | 3.2% | n/a |
| 1983 | 464.1 | 450.6 | 305.4 | 296.5 | 10.8% | 2.0% | 2.3% | n/a |
| 1984 | 554.0 | 530.9 | 314.2 | 301.1 | 15.2% | 2.7% | 1.9% | n/a |
| 1985 | 648.7 | 612.8 | 310.1 | 293.0 | 13.5% | 9.3% | 1.8% | n/a |
| 1986 | 718.6 | 668.4 | 300.9 | 279.9 | 8.6% | 6.5% | 2.0% | n/a |
| 1987 | 822.5 | 752.6 | 327.7 | 299.8 | 11.7% | 7.3% | 2.0% | n/a |
| 1988 | 946.9 | 852.9 | 408.7 | 368.1 | 11.2% | 18.8% | 2.0% | n/a |
| 1989 | 1,025.4 | 909.8 | 458.2 | 406.5 | 4.2% | 18.0% | 2.6% | n/a |
| 1990 | 1,105.1 | 966.6 | 396.6 | 346.9 | 3.9% | 3.1% | 2.5% | n/a |
| 1991 | 1,248.7 | 1,078.1 | 413.2 | 356.8 | 9.3% | 3.4% | 2.3% | n/a |
| 1992 | 1,459.6 | 1,245.7 | 492.1 | 420.0 | 14.3% | 6.4% | 2.3% | n/a |
| 1993 | 1,701.5 | 1,435.7 | 617.4 | 521.0 | 13.9% | 14.7% | 2.6% | n/a |
| 1994 | 1,964.3 | 1,639.0 | 561.7 | 468.7 | 13.0% | 24.1% | 2.8% | n/a |
| 1995 | 2,225.5 | 1,837.4 | 731.0 | 603.5 | 11.0% | 17.1% | 2.9% | 21.6% |
| 1996 | 2,491.0 | 2,035.3 | 860.5 | 703.1 | 9.9% | 8.3% | 3.0% | 21.4% |
| 1997 | 2,768.3 | 2,239.3 | 958.0 | 774.9 | 9.2% | 2.8% | 3.1% | 20.6% |
| 1998 | 3,019.4 | 2,420.1 | 1,024.2 | 820.9 | 7.9% | -0.8% | 3.1% | 20.7% |
| 1999 | 3,297.1 | 2,621.2 | 1,088.3 | 865.2 | 7.7% | -1.4% | 3.1% | 21.9% |
| 2000 | 3,657.5 | 2,885.7 | 1,205.5 | 951.2 | 8.5% | 0.4% | 3.1% | 23.0% |
| 2001 | 4,051.0 | 3,174.1 | 1,333.6 | 1,045.0 | 8.3% | 0.7% | 3.6% | 24.6% |
| 2002 | 4,489.1 | 3,494.7 | 1,465.8 | 1,141.1 | 9.1% | -0.8% | 4.0% | 25.9% |
| 2003 | 5,036.5 | 3,897.4 | 1,657.0 | 1,282.2 | 10.0% | 1.2% | 4.3% | 26.8% |
| 2004 | 5,694.7 | 4,381.0 | 1,949.4 | 1,499.7 | 10.1% | 3.9% | 4.2% | 26.4% |
| 2005 | 6,542.3 | 5,003.4 | 2,290.0 | 1,751.4 | 11.4% | 1.8% | 4.2% | 26.3% |
| 2006 | 7,601.3 | 5,782.8 | 2,754.1 | 2,095.2 | 12.7% | 1.5% | 4.1% | 25.6% |
| 2007 | 8,918.9 | 6,750.2 | 3,555.7 | 2,691.0 | 14.2% | 4.8% | 4.0% | 29.2% |
| 2008 | 9,961.9 | 7,501.3 | 4,577.3 | 3,446.7 | 9.6% | 5.9% | 4.2% | 27.2% |
| 2009 | 10,972.8 | 8,222.4 | 5,089.0 | 3,813.4 | 9.4% | -0.7% | 4.3% | 34.6% |
| 2010 | 12,283.0 | 9,160.2 | 6,033.8 | 4,499.8 | 10.6% | 3.3% | 4.1% | 33.9% |
| 2011 | 13,735.7 | 10,180.9 | 7,492.2 | 5,553.2 | 9.6% | 5.4% | 4.1% | 33.8% |
| 2012 | 15,137.5 | 11,136.9 | 8,539.6 | 6,282.7 | 7.8% | 2.6% | 4.1% | 34.4% |
| 2013 | 16,277.4 | 11,905.1 | 9,624.9 | 7,039.6 | 7.8% | 2.6% | 4.1% | 37.0% |
| 2014 | 17,200.7 | 12,496.3 | 10,524.2 | 7,645.9 | 7.4% | 2.0% | 4.1% | 40.0% |
| 2015 | 17,880.3 | 12,926.2 | 11,113.5 | 8,034.3 | 7.0% | 1.4% | 4.1% | 41.5% |
| 2016 | 18,701.7 | 13,432.0 | 11,226.9 | 8,063.4 | 6.9% | 2.0% | 4.0% | 48.2% |
| 2017 | 19,814.1 | 14,151.8 | 12,265.3 | 8,760.3 | 6.9% | 1.6% | 3.9% | 51.7% |
| 2018 | 21,657.0 | 15,409.7 | 13,841.8 | 9,848.9 | 6.8% | 2.1% | 3.8% | 53.8% |
| 2019 | 23,356.2 | 16,563.8 | 14,340.6 | 10,170.1 | 6.0% | 2.9% | 3.6% | 57.2% |
| 2020 | 24,168.0 | 17,114.7 | 14,862.6 | 10,525.0 | 2.2% | 2.4% | 4.2% | 68.1% |
| 2021 | 27,206.1 | 19,259.6 | 17,744.6 | 12,561.7 | 8.1% | 0.9% | 4.0% | 71.5% |
| 2022 | 30,074.4 | 21,290.9 | 18,321.2 | 12,970.3 | 3.2% | 2.2% | 4.2% | 76.9% |
| 2023 | 32,529.2 | 23,038.3 | 19,244.0 | 13,629.3 | 4.4% | 2.2% | 4.1% | 84.1% |
| 2024 | 34,705.7 | 24,599.3 | 20,699.1 | 14,671.5 | 4.5% | 1.9% | 3.9% | 89.8% |
| 2025 | 36,988.5 | 26,248.0 | 22,404.0 | 15,898.5 | 4.6% | 2.0% | 3.8% | 94.8% |
| 2026 | 39,427.3 | 28,022.1 | 24,295.4 | 17,267.4 | 4.6% | 2.0% | 3.7% | 99.2% |
| 2027 | 42,050.2 | 29,943.8 | 26,437.7 | 18,826.2 | 4.6% | 2.0% | 3.6% | 102.8% |
Inflation
During the winter of 2007–2008, inflation ran about 7% on an annual basis, rising to 8.7% in statistics for February 2008, released in March 2008.[151][152][153]
Shortages of gasoline and diesel fuel developed in the fall of 2007 due to reluctance of refineries to produce fuel at low prices set by the state. These prices were slightly increased in November 2007 with fuel selling for $2.65 a gallon, still slightly below world prices. Price controls were in effect on numerous basic products and services, but were ineffective with food, prices of which were rising at an annual rate of 18.2% in November 2007.[154][155] The problem of inflation has caused concern at the highest levels of the Chinese government. On 9 January 2008, the government issued the following statement on its official website: "The Chinese government decided on Wednesday to take further measures to stabilize market prices and increase the severity of punishments for those guilty of driving up prices through hoarding or cheating."[156][157]
Pork is an important part of the Chinese economy with a per capita consumption of 90 grams per day. The worldwide rise in the price of animal feed associated with increased production of ethanol from corn resulted in steep rises in pork prices in China in 2007. Increased cost of production interacted badly with increased demand resulting from rapidly rising wages. The state responded by subsidizing pork prices for students and the urban poor and called for increased production. Release of pork from the nation's strategic pork reserve was considered.[158]
By January 2008, the inflation rate rose to 7.1%, which BBC News described as the highest inflation rate since 1997, due to the winter storms that month.[159] China's inflation rate jumped to a new decade high of 8.7 percent in February 2008 after severe winter storms disrupted the economy and worsened food shortages, the government said 11 March 2008.[160] Throughout the summer and fall, however, inflation fell again to a low of 6.6% in October 2008.[161]
By November 2010, the inflation rate rose up to 5.1%, driven by an 11.7% increase in food prices year on year. According to the bureau, industrial output went up 13.3 percent. As supplies have run short, prices for fuel and other commodities have risen.[162]
Investment cycles
Chinese investment has always been highly cyclical.[163] Ever since the 1958 Great Leap Forward, growth in fixed capital formation has typically peaked about every five years. Recent peaks occurred in 1978, 1984, 1988, 1993, 2003 and 2009. The corresponding troughs were in 1981, 1986, 1989, 1997 and 2005.[citation needed]
In China, the majority of investment is carried out by entities that are at least partially state-owned. Most of these are under the control of local governments. Thus booms are primarily the result of perverse incentives at the local-government level.[164] Unlike entrepreneurs in a free-enterprise economy, Chinese local officials are motivated primarily by political considerations. As their performance evaluations are based, to a large extent, on GDP growth within their jurisdictions, they have a strong incentive to promote large-scale investment projects.[165][166] They also don't face any real bankruptcy risk. When localities get into trouble, they are invariably bailed out by state-owned banks. Under these circumstances, overinvestment is inevitable.[citation needed]
A typical cycle begins with a relaxation of central government credit and industrial policy. This allows local governments to push investment aggressively, both through state-sector entities they control directly and by offering investment-promotion incentives to private investors and enterprises outside their jurisdictions.[167] The resulting boom puts upward pressure on prices and may also result in shortages of key inputs such as coal and electricity (as was the case in 2003).[168] Once inflation has risen to a level at which it begins to threaten social stability, the central government will intervene by tightening enforcement of industrial and credit policy. Projects that went ahead without required approvals will be halted. Bank lending to particular types of investors will be restricted. Credit then becomes tight and investment growth begins to decline.[169]
Eventually such centrally-imposed busts alleviate shortages and bring inflation down to acceptable levels. At that point, the central government yields to local-government demands for looser policy and the cycle begins again.[citation needed]
Macroeconomic issues
Environmental transition
Over the years, large subsidies were built into the price structure of certain commodities and these subsidies grew substantially in the late 1970s and 1980s.[170]
By 2010, rapidly rising wages and a general increase in the standard of living had put increased energy use on a collision course with the need to reduce carbon emissions in order to control global warming.[171] There were diligent efforts to increase energy efficiency and increase use of renewable sources; over 1,000 inefficient power plants had been closed, but projections continued to show a dramatic rise in carbon emissions from burning fossil fuels.[172] Since the late 2010s, a reduction of state-backed subsidies has negatively impacted several Chinese companies, with BYD Auto being one of them.[173][174][175][176]
While not the largest source of historical cumulative emissions, today China accounts for one quarter of global greenhouse gas emissions.[177] On a per capita basis, China's emissions in 2019 (9 tonnes CO2-equivalent [tCO2e] per year) surpass those of the European Union (7.6 tCO2e) but remain slightly below the Organisation for Economic Co-operation and Development (OECD) average (10.7 tCO2e) and well below the United States average (17.6 tCO2e). However, the carbon intensity of China's GDP—the amount of carbon used to generate a unit of output—remains relatively high.[71] To avoid the long-term socioeconomic cost[178] of environmental pollution in China,[179][180] it has been suggested by Nicholas Stern and Fergus Green of the Grantham Research Institute on Climate Change and the Environment that the economy of China be shifted to more advanced industrial development with low carbon dioxide emissions and better allocation of national resources to innovation and R&D for sustainable economic growth in order to reduce the impact of China's heavy industry. This is in accord with the planning goals of the central government.[181] Chinese leader and Communist Party general secretary Xi Jinping's Chinese Dream is described as achieving the "Two Centenaries", namely the material goal of China becoming a "moderately prosperous society" by 2021, and the modernization goal of China becoming a fully developed nation by 2049, the 100th anniversary of the founding of the People's Republic.[182]
National debt
In 2014, many analysts expressed concern over the overall size of China's government debt.[183][184][185][186] At the end of 2014, the International Monetary Fund reported that China's general government gross debt-to-GDP ratio was 41.44 percent.[187][188] In 2015, a report by the International Monetary Fund concluded that China's public debt is relatively low "and on a stable path in all standard stress tests except for the scenario with contingent liability shocks", such as "a large-scale bank recapitalization or financial system bailout to deal, for example, with a potential rise in NPLs from deleveraging".[189]
Chinese authorities have dismissed analysts' worries, insisting "the country still has room to increase government debt."[190] Former Fed Chairman Ben Bernanke, earlier in 2016, commented that "the ... debt pile facing China [is] an 'internal' problem, given the majority of the borrowings was issued in local currency.[191] Many economists have expressed the same views as Bernanke.[192] A 2019 survey by the OECD found that China's corporate debt is higher than other major countries.[193]
"Shadow banking" has risen in China, posing risks to the financial system.[194][195]
As of 2020, China's total government debt stands at approximately ¥ RMB 46 trillion (US$ 7.0 trillion), equivalent to about 45% of GDP.[196] In comparison, the United States had a government debt of about 28 trillion at the end of 2020, approximately 128% of GDP.[197]
Regulatory environment and government revenues
Though China's economy has expanded rapidly, its regulatory environment has not kept pace. Since Deng Xiaoping's open market reforms, the growth of new businesses has outpaced the government's ability to regulate them. This has created a situation where businesses, faced with mounting competition and poor oversight, take drastic measures to increase profit margins, often at the expense of consumer safety. This issue became more prominent in 2007, with a number of restrictions being placed on problematic Chinese exports by the United States.[198]
From the 1950s to the 1980s, the central government's revenues derived chiefly from the profits of the state enterprises, which were remitted to the state. Some government revenues also came from taxes, of which the most important was the general industrial and commercial tax.[citation needed]
The trend, however, has been for remitted profits of the state enterprises to be replaced with taxes on those profits. Initially, this tax system was adjusted so as to allow for differences in the market capitalization and pricing situations of various firms, but more-uniform tax schedules were introduced in the early 1990s. In addition, personal income and value-added taxes were implemented at that time.[citation needed]
Financial and banking system
Most of China's financial institutions are state-owned and governed.[199] The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration of the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China (BOC), which has a number of branch offices in several countries.[citation needed]
Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public.[citation needed] China initiated the founding of the Asian Infrastructure Investment Bank in 2015 and the Silk Road Fund in 2014, an investment fund of the Chinese government to foster increased investment and provide financial supports in countries along the One Belt, One Road.[200]
China's economic reforms greatly increased the economic role of the banking system. In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan, in practice, 75% of state bank loans go to State Owned Enterprises. (SOEs)[201] Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. It is estimated that, as of 2011, 14 trillion Yuan in loans was outstanding to local governments. Much of that total is believed by outside observers to be nonperforming.[202] Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also increased. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself. On 23 February 2012, the PBC evinced its inclination to liberalise its capital markets when it circulated a telling ten-year timetable.[203] Following on the heels of this development, Shenzhen banks were able to launch cross-border yuan remittances for individuals, a significant shift in the PBC's capital control strictures since Chinese nationals had been previously barred from transferring their yuan to overseas account.[204]
China has four of the world's top ten most competitive financial centers (Shanghai, Hong Kong, Beijing, and Shenzhen), more than any other country.[69] China has three of the world's ten largest stock exchanges (Shanghai, Hong Kong and Shenzhen), both by market capitalization and by trade volume.[70][205] As of 12 October 2020, the total market capitalization of Mainland Chinese stock markets, consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange, topped US$10 trillion, excluding the Hong Kong Stock Exchange, with about US$5.9 trillion.[206]
As of the end of June 2020, foreign investors had bought a total of US$440 billion in Chinese stocks, representing about 2.9% of the total value, and indicating that foreign investors scooped up a total of US$156.6 billion in the stocks just in the first half of 2020.[207] The total value of China's bond market topped US$15.4 trillion, ranked above that of Japan and the U.K., and second only to that of the U.S. with US$40 trillion, as of the beginning of September 2020.[208] As of the end of September 2020, foreign holdings of Chinese bonds reached US$388 billion, or 2.5%, of the total value, notwithstanding an increase by 44.66% year on year.[209]
China has the world's largest total banking sector assets of around $45.838 trillion (309.41 trillion CNY) with $42.063 trillion in total deposits and other liabilities.[210][211]
Stock markets
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As of 2014 and the first quarter of 2015, the financial industry had been providing about 1.5% of China's 7% annual growth rate.[213]
Despite slowing of the economy, as of June 2015 the Chinese stock index, the CSI 300 Index, which is based on 300 stocks traded in the Shanghai and Shenzhen stock exchanges, had risen nearly 150% over the past twelve months. In an effort to forestall damage from collapse of a possible economic bubble fueled by margin trading the central government raised requirements for margin lending. Economic damage from a crash in 2007–2008 was limited due to margin lending being highly restricted.[214] In early July, after a fall in the markets of nearly 30% from their 12 June highs, there were efforts by blue-chip, often state-owned, firms, the Chinese securities industry, and the central government to stabilize the market by buying back stock and increasing purchases of the stock of established firms; however, much of the volatility has been in smaller, less-established firms that had been heavily invested in by unsophisticated, often working class, investors who had purchased stock based solely on its rapid increase in valuation.[215] 80% of Chinese stocks are owned by individual investors, many novices.[216] As of 10 July 2015 efforts by the China Securities Finance Corporation, CFS, a firm created by China's commodities and stock exchanges to finance trades,[217] had apparently stabilized the market.[218][219] Major Chinese securities firms were required by the China Securities Regulatory Commission to buy, and hold, a substantial amount of securities affected by the downturn. Using funds supplied by the central bank and commercial banks the China Securities Finance Corporation purchased enough stocks to halt the slide acquiring as much as 5% of the stock in some firms. Lines of credit were extended by CFS to 21 securities firms, some of which also purchased up to 5% of some companies stocks. Some of the small cap stocks acquired may be overvalued.[217][220]
Chinese stocks fell about 10% during the last week of July 2015 with record breaking losses on Monday.[221]
Currency system
The renminbi ("people's currency") is the currency of China, denominated as the yuan, subdivided into 10 jiao or 100 fen. The renminbi is issued by the People's Bank of China, the monetary authority of China. The ISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". As of 2005, the yuan was generally considered by outside observers to be undervalued by about 30–40%.[222][223] However, in 2017, the IMF stated that the yuan was correctly valued.[224]
The renminbi is held in a floating exchange-rate system managed primarily against the US dollar. On 21 July 2005, China revalued its currency by 2.1% against the US dollar and, since then has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent.[citation needed]
The rate of exchange (Chinese yuan per US$1) on 31 July 2008, was RMB 6.846, in mid-2007 was RMB 7.45, while in early 2006 was RMB 8.07:US$1=8.2793 yuan (January 2000), 8.2783 (1999), 8.2790 (1998), 8.2898 (1997), 8.3142 (1996), 8.3514 (1995).[citation needed]
There is a complex relationship between China's balance of trade, inflation, measured by the consumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies. Inflation in 2007, reflecting sharply rising prices for meat and fuel, is probably related to the worldwide rise in commodities used as animal feed or as fuel. Thus rapid rises in the value of the yuan permitted in December 2007 are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more.[225] An article published in International Review of Economics & Finance in 2010 by Mete Feridun (University of Greenwich Business School) and his colleagues provide empirical evidence that financial development fosters economic growth in China.[226]
During the week of 10 August 2015, against the background of a slowing Chinese economy and appreciation of the U.S. dollar, the People's Bank of China devalued the renminbi by about 5%.[227] The devaluation was accomplished by pegging the official rate to closing market rates. A market-based "representative" exchange rate against the U.S. dollar is one of the requirements for designation of a currency as one with Special Drawing Rights (SDR) by the International Monetary Fund (IMF), one of China's goals.[228] Since the late-2000s, China has sought to internationalize the renminbi. As of 2013, the RMB is the 8th most widely traded currency in the world.[229] In November 2015 in advance of G-20 and IMF meetings, IMF director Christine Lagarde announced her support for adding the yuan to the SDR currency basket. The announcement gave 'green-light' to official approval at 30 November IMF meeting.[230] The internationalization of the Chinese economy continues to affect the standardized economic forecast officially launched in China by the Purchasing Managers Index in 2005. As China's economy grows, so does China's Renminbi, which undergoes the process needed for its internationalization.[231]
Sectors
Among the Fortune 500 companies in 2022, there are 136 in China.[232] As of 2022, China was home to 351 largest listed companies measured by revenue in the Fortune Global 2000, ranking second globally.[233] China is also home to more than two hundred privately held technology startups (tech unicorns), each with a valuation of over $1 billion, the highest number in the world.[234]
Agriculture
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China is the world's largest producer and consumer of agricultural products – and some 300 million Chinese farm workers are in the industry, mostly laboring on pieces of land about the size of U.S. farms. Virtually all arable land is used for food crops. China is the world's largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, potatoes, sorghum, peanuts, tea, millet, barley, oilseed, pork, and fish. Major non-food crops, including cotton, other fibers, and oilseeds, furnish China with a small proportion of its foreign trade revenue. Agricultural exports, such as vegetables and fruits, fish and shellfish, grain and meat products, are exported to Hong Kong. Yields are high because of intensive cultivation, for example, China's cropland area is only 75% of the U.S. total, but China still produces about 30% more crops and livestock than the United States. China hopes to further increase agricultural production through improved plant stocks, fertilizers, and technology.
According to the government statistics issued in 2005,[235] after a drop in the yield of farm crops in 2000, output has been increasing annually.
According to the United Nations World Food Program, in 2003, China fed twenty percent of the world's population with only seven percent of the world's arable land.[236] China ranks first worldwide in farm output, and, as a result of topographic and climatic factors, only about 10–15 percent of the total land area is suitable for cultivation. Of this, slightly more than half is unirrigated, and the remainder is divided roughly equally between paddy fields and irrigated areas. Nevertheless, about 60 percent of the population lives in the rural areas, and until the 1980s a high percentage of them made their living directly from farming. Since then, many have been encouraged to leave the fields and pursue other activities, such as light manufacturing, commerce, and transportation; and by the mid-1980s farming accounted for less than half of the value of rural output. Today, agriculture contributes only 13% of China's GDP.
Animal husbandry constitutes the second most important component of agricultural production. China is the world's leading producer of pigs, chickens, and eggs, and it also has sizable herds of sheep and cattle. Since the mid-1970s, greater emphasis has been placed on increasing the livestock output. China has a long tradition of ocean and freshwater fishing and of aquaculture. Pond raising has always been important and has been increasingly emphasized to supplement coastal and inland fisheries threatened by overfishing and to provide such valuable export commodities as prawns. China is also unmatched in the size and reach of its fishing armada with anywhere from 200,000 to 800,000 boats, some as far afield as Argentina. Fueled primarily by government subsidies, its growth and activities have largely gone unchecked.[237]
Environmental problems such as floods, drought, and erosion pose serious threats to farming in many parts of the country. The wholesale destruction of forests gave way to an energetic reforestation program that proved inadequate, and forest resources are still fairly meagre.[238] The principal forests are found in the Qin Mountains and the central mountains and on the Yunnan–Guizhou Plateau. Because they are inaccessible, the Qinling forests are not worked extensively, and much of the country's timber comes from Heilongjiang, Jilin, Sichuan, and Yunnan.
Western China, comprising Tibet, Xinjiang, and Qinghai, has little agricultural significance except for areas of floriculture and cattle raising. Rice, China's most important crop, is dominant in the southern provinces and many of the farms here yield two harvests a year. In the north, wheat is of the greatest importance, while in central China wheat and rice vie with each other for the top place. Millet and kaoliang (a variety of grain sorghum) are grown mainly in the northeast and some central provinces, which, together with some northern areas, also provide considerable quantities of barley. Most of the soybean crop is derived from the north and the northeast; corn (maize) is grown in the center and the north, while tea comes mainly from the warm and humid hilly areas of the south. Cotton is grown extensively in the central provinces, but it is also found to a lesser extent in the southeast and in the north. Tobacco comes from the center and parts of the south. Other important crops are potatoes, sugar beets, and oilseeds.
In the past decade, the government has been encouraging agricultural mechanization and land consolidation to raise yields and compensate for the loss of rural workers who have migrated to the cities.[239] According to the most recent statistics by the UN Food and Agriculture Organization, the annual growth rate of agricultural mechanization in China is 6.38 percent. By 2014, the integrated mechanization rate had risen to nearly 60 percent, with the rate for wheat surpassing 90 percent and that for maize approaching 80 percent.[240] In addition to standard agricultural equipment like tractors, China's agriculture cooperatives have begun using high-tech equipment, including unmanned aerial vehicles, which are used to spay crops with pesticides.[241] Good progress has been made in increasing water conservancy, and about half the cultivated land is under irrigation.
In the late 1970s and early 1980s, economic reforms were introduced. First of all this began with the shift of farming work to a system of household responsibility and a phasing out of collectivized agriculture. Later this expanded to include a gradual liberalization of price controls; fiscal decentralization; massive privatization of state enterprises, thereby allowing a wide variety of private enterprises in the services and light manufacturing; the foundation of a diversified banking system (but with large amounts of state control); the development of a stock market; and the opening of the economy to increased foreign trade and foreign investment.
Housing and construction
The real estate industry is about 20% of the Chinese economy.[242] Compared to other nations, investing in stock markets and other assets is harder due to currency controls within the country. As a result, many Chinese citizens own multiple properties, as they are one of the few ways in which it is comparatively easy to grow and preserve wealth. Due to this, many economists have speculated about a property bubble within the Chinese economy[243] On 16 July 2020, the Wall Street Journal reported that the housing market within the Chinese economy had grown to US$52 trillion, eclipsing the US 2008 housing market before the Financial Crisis.[244]
Despite the possibility of a housing bubble, many people still choose to invest their assets in real estate market. On 19 December 2021, according to a report by McKinsey Global Institute, China's net worth reached $120 trillion in 2020 to overtake the U.S.'s $89 trillion as a red-hot real estate market drove up property value.[245]
Energy and mineral resources
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- Production: 6.5 trillion kWh (2017)[246]
- Consumption: 2.8248 trillion kWh (2006)
- Exports: 18.7 billion kwh (2015)[247]
- Imports: 6.2 billion kwh (2015)[247]
Electricity – production by source:
- Thermal: 70.4 (67.1% from coal) (2017)[246]
- Hydro: 17.8% (2017)
- Renewables: 7.3% (2017)
- Nuclear: 3.8% (2017)
- Other: 0.7% (2017)
Oil:
- Production: 3,631,000 bbl/d (577,300 m3/d) (2005)
- Consumption: 6,534,000 bbl/d (1,038,800 m3/d) (2005) and expected 9,300,000 bbl/d (1,480,000 m3/d) in 2030
- Exports: 443,300 bbl/d (70,480 m3/d) (2005)
- Imports: 10,110,000 bbl/d (1,607,000 m3/d) (2019) [248]
- Net imports: 2,740,000 barrels per day (436,000 m3/d) (2005)
- Proved reserves: 16.3 Gbbl (2.59×109 m3) (1 January 2006)
Natural gas:
- Production: 47.88 km3 (2005 est.)
- Consumption: 44.93 km3 (2005 est.)
- Exports: 2.944 km3 (2005)
- Imports: 0 m3 (2005)
- Proved reserves: 1,448 km3 (1 January 2006 est.)
Since 1980, China's energy production has grown dramatically, as has the proportion allocated to domestic consumption. Some 80 percent of all power is generated from fossil fuel at thermal plants, with about 17 percent at hydroelectric installations; only about two percent is from nuclear energy, mainly from plants located in Guangdong and Zhejiang.[249] Though China has rich overall energy potential, most have yet to be developed. In addition, the geographical distribution of energy puts most of these resources relatively far from their major industrial users. Basically the northeast is rich in coal and oil, the central part of north China has abundant coal, and the southwest has immense hydroelectric potential. But the industrialized regions around Guangzhou and the Lower Yangtze region around Shanghai have too little energy, while there is relatively little heavy industry located near major energy resource areas other than in the southern part of the northeast.
Due in large part to environmental concerns, China has wanted to shift China's current energy mix from a heavy reliance on coal, which accounts for 70–75% of China's energy, toward greater reliance on oil, natural gas, renewable energy, and nuclear power. China has closed thousands of coal mines over the past five to ten years to cut overproduction. According to Chinese statistics, this has reduced coal production by over 25%.
Since 1993, China has been a net importer of oil, a large portion of which comes from the Middle East. Imported oil accounts for 20% of the processed crude in China. Net imports are expected to rise to 3.5 million barrels (560,000 m3) per day by 2010. China is interested in diversifying the sources of its oil imports and has invested in oil fields around the world. China is developing oil imports from Central Asia and has invested in Kazakhstani oil fields.[250] Beijing also plans to increase China's natural gas production, which currently accounts for only 3% of China's total energy consumption and incorporated a natural gas strategy in its 10th Five-Year Plan (2001–2005), with the goal of expanding gas use from a 2% share of total energy production to 4% by 2005 (gas accounts for 25% of U.S. energy production). Analysts expect China's consumption of natural gas to more than double by 2010.
The 11th Five-Year Program (2006–10), announced in 2005 and approved by the National People's Congress in March 2006, called for greater energy conservation measures, including development of renewable energy sources and increased attention to environmental protection. Guidelines called for a 20% reduction in energy consumption per unit of GDP by 2010. Moving away from coal towards cleaner energy sources including oil, natural gas, renewable energy, and nuclear power is an important component of China's development program. Beijing also intends to continue to improve energy efficiency and promote the use of clean coal technology. China has abundant hydroelectric resources; the Three Gorges Dam, for example, will have a total capacity of 18 gigawatts when fully on-line (projected for 2009). In addition, the share of electricity generated by nuclear power is projected to grow from 1% in 2000 to 5% in 2030. China's renewable energy law, which went into effect in 2006, calls for 10% of its energy to come from renewable energy sources by 2020.
As of 2021, China is facing its worst energy crisis in decades.[251] The Guardian reported that "Companies in the industrial heartlands have been told to limit consumption, residents have been subjected to rolling blackouts, and annual light shows have been cancelled."[252]
China has natural resources with an estimated worth of $23 trillion, 90% of which are coal and rare earth metals.[253]
Mining
Outdated mining and ore-processing technologies are being replaced with modern techniques, but China's rapid industrialization requires imports of minerals from abroad. In particular, iron ore imports from Australia and the United States have soared in the early 2000s as steel production rapidly outstripped domestic iron ore production. Also China has become increasingly active in several African countries to mine the reserves it requires for economic growth, particularly in countries such as the Democratic Republic of the Congo and Gabon.
The major areas of production in 2004 were coal (nearly two billion tons), iron ore (310 million tons), crude petroleum (175 million tons), natural gas (41 million cubic meters), antimony ore (110,000 tons), tin concentrates (110,000 tons), nickel ore (64,000 tons), tungsten concentrates (67,000 tons), unrefined salt (37 million tons), vanadium (40,000 tons), and molybdenum ore (29,000 tons). In order of magnitude, produced minerals were bauxite, gypsum, barite, magnesite, talc and related minerals, manganese ore, fluorspar, and zinc. In addition, China produced 2,450 tons of silver and 215 tons of gold in 2004. The mining sector accounted for less than 0.9% of total employment in 2002 but produced about 5.3% of total industrial production.
In 2019, the country was the world's largest producer of gold;[254] 3rd largest world producer of copper;[255] 3rd worldwide producer of silver;[256] the world's largest producer of sulfur;[257] the world's largest producer of phosphate;[258] the world's largest producer of molybdenum;[259] the world's largest producer of lead;[260] largest world producer of zinc;[261] the world's largest producer of vanadium;[262] largest world producer of tin;[263] the world's largest producer of titanium;[264] the world's largest producer of antimony;[265] 2nd largest worldwide producer of bauxite;[266] 3rd largest world producer of iron ore;[267] 6th largest world producer of manganese;[268] 7th largest world producer of nickel;[269] 10th largest world producer of cobalt;[270] in addition to being the world's largest producer of salt.[271] It was the world's 8th largest producer of uranium in 2018.[272] Furthermore, it is the largest world producer of jade and one of the world producers of topaz, tourmaline, peridot and diamond.
Until the end of 2019, a total of 173 types of minerals have been discovered in China, including 13 types of energy materials, 59 metals, 95 types of non-metallic minerals and six types of water and gases. In 2019, the newly discovered geological reserves of oil were 1.12 billion tonnes, of which, 160 million tonnes were proven technically recoverable reserves. The newly discovered geological reserves of shale gas were 764.42 billion cubic metres, of which, 183.84 billion cubic metres were proven reserves. With respect to non-oil and gas minerals, the evaluation states that China has great prospecting potential for 24 major minerals, including coal, iron ore, manganese, chromite, copper, lead, zinc, bauxite, tungsten, tin, molybdenum, antimony, nickel, gold, silver, lithium, pyrites, phosphate rock, potash, magnesite, fluorite, boron and barite.[273]
Hydroelectric resources
China has an abundant potential for hydroelectric power production due to its considerable river network and mountainous terrain. Most of the total hydroelectric capacity is situated in the southwest of the country, where coal supplies are poor but demand for energy is rising swiftly. The potential in the northeast is fairly small, but it was there that the first hydroelectric stations were built – by the Japanese during its occupation of Manchuria.[274]
Thirteen years in construction at a cost of $24 billion, the immense Three Gorges Dam across the Yangtze River was essentially completed in 2006 and produced more than 100TWh of energy in 2018.
Coal
China is well endowed with mineral resources,[275] the most important of which is coal. China's mineral resources include large reserves of coal and iron ore, plus adequate to abundant supplies of nearly all other industrial minerals. Although coal deposits are widely scattered (some coal is found in every province), most of the total is located in the northern part of the country. The province of Shanxi, in fact, is thought to contain about half of the total; other important coal-bearing provinces include Heilongjiang, Liaoning, Jilin, Hebei, and Shandong.[276] Apart from these northern provinces, significant quantities of coal are present in Sichuan, and there are some deposits of importance in Guangdong, Guangxi, Yunnan, and Guizhou.[276] A large part of the country's reserves consists of good bituminous coal, but there are also large deposits of lignite. Anthracite is present in several places (especially Liaoning, Guizhou, and Henan), but overall it is not very significant.[277]
To ensure a more even distribution of coal supplies and to reduce the strain on the less than adequate transportation network, the authorities pressed for the development of a large number of small, locally run mines throughout the country. This campaign was energetically pursued after the 1960s, with the result that thousands of small pits have been established, and they produce more than half the country's coal. This output, however, is typically expensive and is used for local consumption. It has also led to a less than stringent implementation of safety measures in these unregulated mines, which cause several thousands of deaths each year.[278]
Coal makes up the bulk of China's energy consumption (70% in 2005, 55% in 2021), and China is the largest producer and consumer of coal in the world. As China's economy continues to grow, China's coal demand is projected to rise significantly. Although coal's share of China's overall energy consumption will decrease, coal consumption will continue to rise in absolute terms. China's continued and increasing reliance on coal as a power source has contributed significantly to putting China on the path to becoming the world's largest emitter of acid rain-causing sulfur dioxide and greenhouse gases, including carbon dioxide.
As of 2015, falling coal prices resulted in layoffs at coal mines in the northeast.[279]
Oil and natural gas
China's onshore oil resources are mostly located in the Northeast and in Xinjiang, Gansu, Qinghai, Sichuan, Shandong, and Henan provinces. Oil shale is found in a number of places, especially at Fushun in Liaoning, where the deposits overlie the coal reserves, as well as in Guangdong. High quality light oil has been found in the Pearl River estuary of the South China Sea, the Qaidam Basin in Qinghai, and the Tarim Basin in Xinjiang. The country consumes most of its oil output but does export some crude oil and oil products. China has explored and developed oil deposits in the South China Sea and East China Sea, the Yellow Sea, the Gulf of Tonkin, and the Bohai Sea.
In 2013, the pace of China's economic growth exceeded the domestic oil capacity and floods damaged the nation's oil fields in the middle of the year. Consequently, China imported oil to compensate for the supply reduction and surpassed the US in September 2013 to become the world's largest importer of oil.[280]
The total extent of China's natural gas reserves is unknown, as relatively little exploration for natural gas has been done.[281] Sichuan accounts for almost half of the known natural gas reserves and production.[282] Most of the rest of China's natural gas is associated gas produced in the Northeast's major oil fields, especially Daqing oilfield. Other gas deposits have been found in the Qaidam Basin, Hebei, Jiangsu, Shanghai, and Zhejiang, and offshore to the southwest of Hainan Island.[283] According to an article published in Energy Economics in 2011 by economists Mete Feridun (University of Greenwich) and Abdul Jalil (Wuhan University in China), financial development in China has not taken place at the expense of environmental pollution and financial development has led to a decrease in environmental pollution. Authors conclude that carbon emissions are mainly determined by income, energy consumption and trade openness and their findings confirm the existence of an Environmental Kuznets Curve in the case of China.[284]
Metals and nonmetals
Iron ore reserves are found in most provinces, including Hainan. Gansu, Guizhou, southern Sichuan, and Guangdong provinces have rich deposits. The largest mined reserves are located north of the Yangtze River and supply neighboring iron and steel enterprises. With the exception of nickel, chromium, and cobalt, China is well supplied with ferroalloys and manganese. Reserves of tungsten are also known to be fairly large. Copper resources are moderate, and high-quality ore is present only in a few deposits. Discoveries have been reported from Ningxia. Lead and zinc are available, and bauxite resources are thought to be plentiful. China's antimony reserves are the largest in the world. Tin resources are plentiful, and there are fairly rich deposits of gold. China is the world's fifth largest producer of gold and in the early 21st century became an important producer and exporter of rare metals needed in high-technology industries.
China also produces a fairly wide range of nonmetallic minerals. One of the most important of these is salt, which is derived from coastal evaporation sites in Jiangsu, Hebei, Shandong, and Liaoning, as well as from extensive salt fields in Sichuan, Ningxia, and the Qaidam Basin. There are important deposits of phosphate rock in a number of areas; Jiangxi, Guangxi, Yunnan and Hubei. Production has been accelerating every year. As of 2013 China is producing 97,000,000 metric tons of phosphate rock a year.[285] Pyrites occur in several places; Liaoning, Hebei, Shandong, and Shanxi have the most important deposits. China also has large resources of fluorite (fluorspar), gypsum, asbestos, and has the world's largest reserves and production of cement, clinker and limestone.
Industry and manufacturing
As of 2017[update], industry accounts for 40.5% of China's GDP.[286] Between the years 2011 and 2013, China used more cement than the United States consumed during the entire 20th century.[287] In 2009 around 8% of the total manufacturing output in the world came from China itself and China ranked third worldwide in industrial output that year (first was EU and second United States). Research by IHS Global Insight states that in 2010 China contributed to 19.8% of world's manufacturing output and became the largest manufacturer in the world that year, after the US had held that position for about 110 years.[288][289]
In November 2012, the State Council of the People's Republic of China mandated a "social risk assessment" for all major industrial projects. This requirement followed mass public protests in some locations for planned projects or expansions.[290]
Major industries include mining and ore processing; iron and steel; aluminium; coal; machinery; armaments; textiles and apparel; petroleum; cement; chemical; fertilizers; food processing; automobiles and other transportation equipment including rail cars and locomotives, ships, and aircraft; consumer products including footwear, toys, and electronics; telecommunications and information technology. China has become a preferred destination for the relocation of global manufacturing facilities. Its strength as an export platform has contributed to incomes and employment in China.[citation needed]
Since the founding of the People's Republic, industrial development has been given considerable attention; as of 2011 46% of China's national output continued to be devoted to investment; a percentage far higher than any other nation.[291] Among the various industrial branches the machine-building and metallurgical industries have received the highest priority. These two areas alone now account for about 20–30 percent of the total gross value of industrial output.[292] In these, as in most other areas of industry, however, innovation has generally suffered at the hands of a system that has rewarded increases in gross output rather than improvements in variety, sophistication and quality. China, therefore, still imports significant quantities of specialized steels. Overall industrial output has grown at an average rate of more than ten percent per year, having surpassed all other sectors in economic growth and degree of modernization.[293] Some heavy industries and products deemed to be of national strategic importance remain state-owned, but an increasing proportion of lighter and consumer-oriented manufacturing firms are privately held or are private-state joint ventures.[citation needed]
The predominant focus of development in the chemical industry is to expand the output of chemical fertilizers, plastics, and synthetic fibers. The growth of this industry has placed China among the world's leading producers of nitrogenous fertilizers. In the consumer goods sector the main emphasis is on textiles and clothing, which also form an important part of China's exports. Textile manufacturing, a rapidly growing proportion of which consists of synthetics, account for about ten percent of the gross industrial output and continues to be important, but less so than before. The industry tends to be scattered throughout the country, but there are a number of important textile centers, including Shanghai, Guangzhou, and Harbin.[294][295] There is a growing consumer culture in China.
Steel industry
In 2020, China produced over 1053 million tonnes of steel, over half of the world total. This was an increase of 5.6% over the previous year as global steel production fell by 0.9%. China's share of global crude steel production increased from 53.3% in 2019 to 56.5% in 2020[296]
Iron ore production kept pace with steel production in the early 1990s but was soon outpaced by imported iron ore and other metals in the early 2000s. Steel production, an estimated 140 million tons in 2000 increased to 419 million tons in 2006 and 928 million tons by 2018. Much of the country's steel output comes from a large number of small-scale producing centers, one of the largest being Anshan in Liaoning.[citation needed]
China was the top exporter of steel in the world in 2018; export volumes in 2018 were 66.9 million tons, a nine percent decrease over the previous year.[297] The decline slowed China's decade-old steel export growth. As of 2012 steel exports faced widespread anti-dumping taxes and had not returned to pre-2008 levels. However, in 2015, China's steel exports reached a record high of 110 million metric tons.[298] Domestic demand remained strong, particularly in the developing west where steel production in Xinjiang was expanding.[299]
For the year 2018, China's steel industry reported profits of CNY 470 billion ($70 billion), which was 39% higher than the year before.[300]
Of the 45 largest steel producing companies in the world, 21 are Chinese, including the world's largest, China Baowu Steel Group.
Automotive industry
China is the world's largest automobile producer, manufacturing more than 27 million vehicles in 2018. For comparison, the corresponding numbers for the US and Japan were 11.3 million and 9.7 million respectively. By 2006 China had become the world's third largest automotive vehicle manufacturer (after US and Japan) and the second largest consumer (only after the US). However, four years later, in 2010, China was manufacturing more vehicles than the U.S. and Japan combined. Automobile manufacturing has soared during the reform period. In 1975 only 139,800 automobiles were produced annually, but by 1985 production had reached 443,377, then jumped to nearly 1.1 million by 1992 and increased fairly evenly each year up until 2001, when it reached 2.3 million. In 2002 production rose to nearly 3.25 million and then jumped to 4.44 million in 2003, 5.07 million in 2004, 5.71 million in 2005, 7.28 million in 2006, 8.88 million in 2007, 9.35 million in 2008 and 13.83 million in 2009. China has become the number-one automaker in the world as of 2009. Domestic sales have kept pace with production. After respectable annual increases in the mid- and late 1990s, passenger car sales soared in the early 2000s. In 2006, a total of 7.22 million automobiles were sold, including 5.18 million units of passenger cars and 2.00 million commercial vehicles.[citation needed]
In 2010, China became the world's largest automotive vehicle manufacturer as well as the largest consumer ahead of the United States with an estimated 18 million new cars sold.[301] However, new car sales grew only by an estimated 1% between 2011 and 2012 due to the escalation in the Spratly Islands dispute, which involved Japan, the world's third largest producer of vehicles.[302]
China's automotive industry has been so successful that it began exporting car parts in 1999. China began to plan major moves into the automobile and components export business starting in 2005. A new Honda factory in Guangzhou was built in 2004 solely for the export market and was expected to ship 30,000 passenger vehicles to Europe in 2005. By 2004, twelve major foreign automotive manufacturers had joint-venture plants in China. They produced a wide range of automobiles, minivans, sport utility vehicles, buses, and trucks. In 2003 China exported US$4.7 billion worth of vehicles and components. The vehicle export was 78,000 units in 2004, 173,000 units in 2005, and 340,000 units in 2006. The vehicle and component export is targeted to reach US$70 billion by 2010.[citation needed]
The market for domestically produced cars, under a local name, is likely to continue to grow both inside China and outside. Companies such as Geely, Qiantu and Chery are constantly evaluating new international locations, both in developing and developed countries.[303]
Electric vehicle industry
The electric vehicle industry in China is the largest in the world, accounting for around 57.4% of global production of EVs and around 500,000 exports in 2021.[304] In 2021, CAAM reported China had sold 3.34 million passenger electric vehicles, consisting 2.73 million BEVs (battery-only EVs) and 0.6 million PHEV (plug-in hybrid electric vehicles),[305] which is around 53% share of the global market of 6.23 million "new energy" passenger vehicles – BEVs, PHEVs, and HEVs.[306] China also dominates the plug-in electric bus and light commercial vehicle market, reaching over 500,000 buses (98% of global stock) and 247,500 electric commercial vehicles (65% of global stock) in 2019,[307] and recording new sales of 186,000 commercial EVs in 2021.[308]
Plug-in electric vehicle (BEV and PHEV) sales was 15% of the overall automotive sales in China in 2021.[309] NEV adoption rapidly increased to a record 28% in March 2022, and according to BYD chairman Wang Chuanfu could reach 35% by end of 2022, exceeding the government goal of 20% by 2025.[310] The plug-in market in China was dominated by Chinese companies, with BYD Auto and SAIC Motor occupying the top two spots, and 5 out of the top 7 spots.[311]
The battery industry is closely related to the EV industry as batteries constitute around 1/3 of the cost of EVs[312] and around 80% of lithium-ion batteries in the world are used in EVs.[313] The industry also has significant Chinese presence, with major players including world's largest CATL, BYD, CALB, Gotion, SVOLT and WeLion.[314]
Semiconductor industry
The Chinese semiconductor industry, including IC design and manufacturing, forms a major part of China's IT industry. China's semiconductor industry consists of a wide variety of companies, from integrated device manufacturers to pure-play foundries to fabless semiconductor companies. Integrated device manufacturers (IDMs) design and manufacture integrated circuits. Pure-play foundries only manufacture devices for other companies, without designing them, while fabless semiconductor companies only design devices. Examples of Chinese IDMs are YMTC and CXMT, examples of Chinese pure-play foundries are SMIC, Hua Hong Semiconductor and Wingtech, and examples of Chinese fabless companies are Zhaoxin, HiSilicon and UNISOC.
China is the currently the world's largest semiconductor market in terms of consumption. In 2020, China represented 53.7% of worldwide chip sales, or $239.45 billion out of $446.1 billion. However, a large percentage are imported from multinational suppliers. In 2020, imports took up 83.38% ($199.7 billion) of total chip sales. In response, the country has launched a number of initiatives to close the gap, including investing $150 billion into its domestic IC industry, with a "Made in China 2025" goal of 70% domestic production.[315][316]
China leads the world in terms of number of new fabs under construction, with 8 out of 19 worldwide in 2021, and 17 fabs in total are expected to start construction from 2021 to 2023. Total installed capacity of Chinese-owned chipmakers will also increase from 2.96 million wafers per month (wpm) in 2020 to 3.572 million wpm in 2021.[315]
Other industries
Substantial investments were made in the manufacture of solar panels and wind generators by a number of companies, supported by liberal loans by banks and local governments. However, by 2012 manufacturing capacity had far outstripped domestic and global demand for both products, particularly solar panels, which were subjected to anti-dumping penalties by both the United States and Europe. The global oversupply has resulted in bankruptcies and production cutbacks both inside and outside China. China has budgeted $50 billion to subsidize production of solar power over the two decades following 2015 but, even at the sharply reduced price resulting from oversupply, as of 2012 cost of solar power in China remained three times that of power produced by conventional coal-fired power plants.[317]
China is the world's biggest sex toy producer and accounts for 70% of the worldwide sex toys production.[318] In the country, 1,000 manufacturers are active in this industry, which generates about two billion dollars a year.[318]
As of 2011, China was the world's largest market for personal computers[319] Since 2019, Samsung Electronics, Hyundai Motors, Kia Motors and LG Electronics are moving some or all production out of China, in order to reduce overdependence on the Chinese market and avoid risks related with increased local competition, China's economic slowdown and the US-China trade war.[320][321]
Services
The output of China's services in 2015 ranks second worldwide after the United States. High power and telecom density has ensured that the country has remained on a high-growth trajectory over the long term. In 2015 the services sector produced 52.9% of China's annual GDP, second only to manufacturing. However, its proportion of GDP is still low compared to the ratio in more developed countries, and the agricultural sector still employs a larger workforce.[citation needed]
Prior to the onset of economic reforms in 1978, China's services sector was characterized by state-operated shops, rationing, and regulated prices – with reform came private markets, individual entrepreneurs, and a commercial sector. The wholesale and retail trade has expanded quickly, with numerous shopping malls, retail shops, restaurant chains and hotels constructed in urban areas. Public administration remains a main component of the service sector, while tourism has become a significant factor in employment and a source of foreign exchange.[322]
Telecommunications
China possesses a diversified communications system that links all parts of the country by Internet, telephone, telegraph, radio, and television.[citation needed]
The affordability of mobile phones and internet data in China has resulted in the number of mobile internet users in China surpassing the number of computer internet users.[323]: 178
China's number of Internet users or netizens topped 137 million by the end of 2006,[324] an increase of 23.4% from a year before and 162 million by June 2007, making China the second-largest Internet user after the United States, according to China's Ministry of Information Industry (MII). China's mobile phone penetration rate was 34% in 2007. In 2006, mobile phone users sent 429 billion text messages (on average 967 text messages per user). For 2006, the number of fixed-lines grew by 79%, mainly in the rural areas.[325]
Tourism
China hosts the world's largest number of World Heritage Sites (55). China's tourism industry is one of the fastest-growing industries in the national economy and is also one of the industries with a very distinct global competitive edge. According to the World Travel and Tourism Council, travel and tourism directly contributed CNY 1,362 billion (US$216 billion) to the Chinese economy (about 2.6% of GDP).[326] In 2011, total international tourist arrivals was 58 million, and international tourism receipts were US$48 billion.[327]
Domestic tourism market makes up more than 90% of the country's tourism traffic, and contributes more than 70% of total tourism revenue. In 2002, domestic tourists reached 878 million and tourism revenue was $46.9 billion. A large middle class with strong consumption power is emerging in China, especially in major cities. China's outbound tourists reached 20.22 million in 2003, overtaking Japan for the first time.[citation needed]
It is forecast by the World Tourism Organization that China's tourism industry will take up to 8.6% of world market share to become the world's top tourism industry by 2020.[citation needed]
Chinese business travel spending is also forecast to be the highest in the world by 2014, overtaking the United States. According to a Global Business Travel Association study, total business-travel spending is expected to reach US$195 billion in 2012.[328]
Luxury goods
Parts of this article (those related to Projections and trends regarding luxury goods) need to be updated. The reason given is: Statistics and projects on luxury goods are significantly dated, largely based on 2008 article. (August 2022) |
Luxury spending in China has skyrocketed, an indicator of the country's newfound wealth. For example, the Chinese bottled water industry is forecast to more than double in size in 2008, becoming a $10.5 billion industry. Counterfeiting is now estimated to account for 8% of China's gross domestic product. Many municipalities and towns in China depend upon counterfeiting to sustain their local economies. There are millions of people, perhaps tens of millions of people, involved in counterfeiting in China.[citation needed] There are hundreds of thousands of people involved in anti-counterfeiting. Meanwhile, as those who once had no recourse but low-quality tap water take advantage of its availability in supermarkets, those who had little or no running water are now capitalizing on its availability. Tap water production and supply is expected to grow by 29.3% in 2008, to $11.9 billion. China's automotive industry is expected to expand by 29.5% to nearly $200 billion. Also, consumption of chocolate and other confectionery is to increase by 24.3%, as the industry expands to $4.6 billion. Additionally China's fast food industry has been growing at a 20.8% annual rate. The LVMH Group, who own brands including Louis Vuitton apparel, Moët & Chandon wines and champagne and Hennessy cognacs, reported earnings growth of over 25% in 2007 in China, with the country accounting for around 16% of LVMH's global business.[329]
After an October 2012 ban on government agencies purchasing luxury goods, often used as "gifts", sales of luxury goods in China remained strong but slowed, even falling slightly for some luxury retailers in the 4th quarter of 2012,[330] with sales of shark fins and edible swallow nests (once staples of lavish government banquets) down sharply.[331]
Retail sales in China account for only 7% of global retail sales; however, Chinese buyers account for 25% of global retail sales of luxury consumer goods. Many shops in international travel destinations have specialized staff devoted to Chinese customers.[330]
Cybercrime
An academic study released in August 2012 by the University of California (UC) Institute on Global Conflict and Cooperation, claimed that China's "cyber black market" involved over 90,000 participants, cost the local economy 5.36 billion yuan (£536m), negatively impacted upon 110 million internet users (22%), and affected 1.1 million websites (20%) in 2011.[332] In July 2012, China's State Council released a set of information security guidelines as a measure to combat cyber crime that included increased auditing, security reporting, and monitoring, and a commitment to "reduce the number of internet connection points".[333]
Labor and welfare
One of the hallmarks of China's socialist economy was its promise of employment to all able and willing to work and job-security with virtually lifelong tenure. This socialist policy is known as the iron rice bowl.[citation needed]
In 1979–1980, the state reformed factories by giving wage increases to workers, which was immediately offset by sharply rising inflation rates of 6–7%. The reforms also dismantled the iron rice bowl, which meant it witnessed a rise in unemployment in the economy. In 1979–80 there were twenty million unemployed people.[334]
China's estimated employed labor force in 2005 totaled 791 million persons, about 60% of the total population. During 2003, 49% of the labor force worked in agriculture, forestry, and fishing; 22% in mining, manufacturing, energy, and construction industries; and 29% in the services sector and other categories. In 2004 some 25 million persons were employed by 743,000 private enterprises. Urban wages rose rapidly from 2004 to 2007, at a rate of 13 to 19% per year with average wages near $200/month in 2007.[336] By 2016 the average monthly wage for workers engaged in manufacturing goods for export was $424. This wage, combined with other costs of doing business in China, had, more or less, equalized any Chinese cost advantage with respect to developed economies.[337]
The All-China Federation of Trade Unions is the country's only legally-permissible trade union. Attempts to form trade unions independent of the ACFTU have been rare and short-lived. One notable example is the Beijing Workers' Autonomous Federation formed during the 1989 Tiananmen Square protests. Martial Law Command Headquarters issued a public notice declaring the BWAF an illegal organization and ordering it to disband on the grounds that Federation leaders were among "the main instigators and organizers in the capital of the counterrevolutionary rebellion.[338][339]
In 2010, the issues of manufacturing wages caused a wildcat strike at a Honda parts plant. This resulted in wage increases both at the struck plant and other industrial plants.[340][341][342][343][344]
The 2010 census found that China was now half urban and rapidly aging due to the one child policy. This is expected to lead to increased demand for labor to take care of an elderly population and a reduced supply of migrant labor from the countryside.[345]
Due to worsening pollution, the corruption and political uncertainties of the one-party state and the limited economic freedom in an economy dominated by large state-owned enterprises, many skilled professionals are either leaving the country or preparing safety nets for themselves abroad.[346][347][348] In the decade up to 2014, ten million Chinese emigrated to other countries, taking assets and their technical skills.[349] Perceived corruption continued to grow worse in China as it dropped from 75th to 80th place in Transparency International's index of state corruption.[citation needed]
A law approved February 2013 will mandate a nationwide minimum wage at 40% average urban salaries to be phased in fully by 2015.[350]
External trade
This section needs additional citations for verification. economy, china, this, article, about, economy, people, republic, china, economy, republic, china, economy, taiwan, other, uses, disambiguation, china, upper, middle, income, developing, mixed, socialist, market, economy, that, incorporates, industrial, policie. This article is about the economy of the People s Republic of China For the economy of the Republic of China see Economy of Taiwan For other uses see Economy of China disambiguation China has an upper middle income developing mixed socialist market economy that incorporates industrial policies and strategic five year plans 32 It is the world s second largest economy by nominal GDP and the world s largest economy since 2016 when measured by purchasing power parity PPP n 1 33 Due to a volatile currency exchange rate China s GDP as measured in dollars fluctuates sharply 34 China accounted for 18 6 of global economy in 2022 in PPP terms 35 36 and around 18 in nominal terms in 2022 35 37 Historically China was one of the world s foremost economic powers for most of the two millennia from the 1st until the 19th century 38 39 The economy consists of public sector enterprise state owned enterprises SOEs and mixed ownership enterprises as well as a large domestic private sector and openness to foreign businesses in a system It recently overtook the economy of the European Union in 2021 40 Private investment and exports are the main drivers of economic growth in China but in recent years the Chinese government has been emphasising domestic consumption 41 Economy of ChinaShanghai the financial center of ChinaCurrencyRenminbi CNY Fiscal yearCalendar yearTrade organizationsWTO BRICS SCO APEC RCEP G 20 G77 and othersCountry groupDeveloping Emerging market economy 1 Upper middle income country 2 StatisticsPopulation1 411 750 000 31 December 2022 est GDP 19 373 trillion nominal 2023 est 3 33 014 trillion PPP 2023 est 3 GDP rank2nd nominal 2023 1st PPP 2023 GDP growth8 4 2021 4 3 0 2022 4 5 2 2023f 4 4 5 2024f 4 GDP per capita 13 721 nominal 2023 est 3 23 382 PPP 2023 est 3 GDP per capita rank63rd nominal 2023 73rd PPP 2023 GDP by sectorAgriculture 7 9 Industry 40 5 Services 51 6 2017 5 GDP by componentPrivate consumption 38 37 Government consumption 15 92 Gross capital formation 42 84 Exports of goods and services 20 04 Imports of goods and services 17 43 Others 2 61 2022 6 Inflation CPI 2 8 2022 3 Population below poverty line0 1 at national poverty line 2 30 day 2019 7 note 1 25 on less than 6 85 day 2019 8 Gini coefficient38 2 medium 2019 9 note 2 Human Development Index0 768 high 2021 10 79th 0 651 medium 67th 2021 11 Labor force812 081 113 2021 12 1st 69 1 employment rate 2022 13 Labor force by occupationAgriculture 25 Industry 27 Services 47 FY 2019 14 Unemployment5 3 2022 3 18 7 youth unemployment August 2022 15 note 3 Average gross salary 8 904 US 1380 per month 2021Average net salary 6 841 US 1060 per month 2021Gross savings46 395 of GDP 2022 16 Yield curve10 Year Bond 2 831 April 2023 17 Purchasing Managers Index52 60 Manufacturing Feb 2023 18 56 30 Non Manufacturing Feb 2023 19 Main industriesmining and ore processing iron steel aluminum and other metals coal machine building armaments textiles and apparel petroleum cement chemicals fertilizer consumer products including footwear toys and electronics food processing transportation equipment including automobiles railcars and locomotives ships aircraft telecommunications equipment commercial space launch vehicles satellitesEase of doing business rank31st very easy 2020 20 ExternalExports 3 593 trillion 2022 21 Export goodsAgricultural products 2 2 Fuels and mining products 2 4 Manufacturers 74 3 Others 0 1 22 Main export partners United States 16 1 ASEAN 15 8 European Union 15 6 Hong Kong 8 27 Japan 4 81 South Korea 4 52 India 3 30 United Kingdom 2 27 Others 29 33 21 Imports 2 716 trillion 2022 21 Import goodsAgricultural products 7 5 Fuels and mining products 21 3 Manufacturers 64 4 Others 4 8 22 Main import partners ASEAN 15 03 European Union 10 50 Taiwan 8 77 South Korea 7 35 Japan 6 79 United States 6 54 Australia 5 23 Russia 4 20 Others 35 59 21 FDI stockInward 181 billion 2021 23 Outward 145 billion 2021 23 Current account 329 6 billion 2022 16 1 8 of GDP 2022 16 Gross external debt 2 64 trillion June 2022 24 14 39 of GDP Public financesPublic debt 94 732 trillion 76 9 of GDP 2022 16 Budget balance2 8 of GDP 2022 25 Revenues 30 624 trillion 16 24 8 of GDP 2022 Expenses 41 591 trillion 16 33 7 of GDP 2022 Credit ratingStandard amp Poor s 26 A Domestic A Foreign A T amp C Assessment Outlook StableMoody s 27 A1 Outlook StableFitch 28 A Outlook StableScope 29 A Outlook NegativeForeign reserves 3 3 trillion December 2022 30 31 1st Main data source CIA World Fact Book All values unless otherwise stated are in US dollars China is the world s largest manufacturing economy and exporter of goods 42 It is also the world s fastest growing consumer market and second largest importer of goods 43 China is also the world s largest consumer of numerous commodities and accounts for about half of global consumption of metals 44 China is a net importer of services products 45 It is the largest trading nation in the world and plays a prominent role in international trade 46 47 China is the largest recipient of foreign direct investment in the world as of 2020 receiving inflows of 163 billion 48 It has the second largest outward foreign direct investment at US 136 91 billion for 2019 alone following Japan at US 226 65 billion for the same period 49 As of 2022 China was second in the world in total number of billionaires 50 In 2018 it was second in millionaires with 3 5 million 51 According to the 2019 Global Wealth Report by Credit Suisse Group China surpassed the US in the wealth of the top ten percent of the world s population 52 note 4 China has the world s largest foreign exchange reserves worth 3 1 trillion 53 but if the foreign assets of China s state owned commercial banks are included the value of China s reserves rises to nearly 4 trillion 54 China faced a mild economic slowdown during the 2007 2008 financial crisis and initiated a massive stimulus package which helped to regain its economic growth With 778 million workers the Chinese labor force was the world s largest as of 2020 It ranks 28th on the Global Competitiveness Report 55 Per the Global Innovation Index in 2022 China was ranked 11th in the world 3rd in Asia amp Oceania region and 2nd for countries with a population of over 100 million It is the only middle income economy and the only newly industrialized economy in the top 30 56 57 It is often ranked among the world s most innovative countries leading several measures of global patent filings 58 59 China has the second largest financial assets in the world valued at 17 9 trillion as of 2021 60 It also has two Shenzhen Hong Kong Guangzhou and Beijing in the 2nd and 3rd spots respectively of the global top 5 science and technology clusters which is more than any other country 56 61 As of March 2022 China has over 500 million 5G users and 1 45 million base stations installed 62 63 Almost 493 million Chinese people are categorised as middle class and 242 million are upper middle class according to a 2021 Pew Research Center survey 64 In 2022 mainland China s ten largest trading partners were European Union United States South Korea Japan Taiwan Hong Kong Vietnam Australia Malaysia and Russia 65 China has free trade agreements with many nations some of which are already in force such as RCEP the largest trading bloc in history or are still in the negotiation phase 66 Although widely regarded as the powerhouse of manufacturing or the factory of the world 67 exports contribute only a comparatively small proportion of the Chinese economy at just 18 5 in 2020 Of the world s 500 largest companies 145 are headquartered in China 68 It has four of the world s top ten most competitive financial centers 69 and three of the world s ten largest stock exchanges both by market capitalization and by trade volume 70 China s economy is both a contributor to rising global greenhouse gas GHG emissions causing climate change and severely affected by its adverse impacts although its per capita emissions are still much lower than developed economies such as the United States 71 Contents 1 History 2 Wealth in China 3 State owned enterprises 4 Regional economies for China 4 1 GDP by administrative division 4 2 Hong Kong and Macau 5 Development 5 1 Disputes over economic data 5 1 1 Overestimating 5 1 2 Issues with underestimating 5 2 Regional development 6 Macroeconomic trends 6 1 Inflation 6 2 Investment cycles 7 Macroeconomic issues 7 1 Environmental transition 7 2 National debt 7 3 Regulatory environment and government revenues 8 Financial and banking system 8 1 Stock markets 8 2 Currency system 9 Sectors 9 1 Agriculture 9 2 Housing and construction 9 3 Energy and mineral resources 9 3 1 Mining 9 3 2 Hydroelectric resources 9 3 3 Coal 9 3 4 Oil and natural gas 9 3 5 Metals and nonmetals 9 4 Industry and manufacturing 9 4 1 Steel industry 9 4 2 Automotive industry 9 4 3 Electric vehicle industry 9 4 4 Semiconductor industry 9 4 5 Other industries 9 5 Services 9 5 1 Telecommunications 9 5 2 Tourism 9 5 3 Luxury goods 9 5 4 Cybercrime 10 Labor and welfare 11 External trade 12 Foreign investment 12 1 Chinese investment abroad 12 2 Mergers and acquisitions 13 Demographics 13 1 Labor force 14 Transportation and infrastructure 15 Science and technology 16 Anti monopoly and competition 17 See also 18 Notes 19 References 20 Further readingHistory EditMain articles Economic history of China before 1912 Economic history of China 1912 1949 and Economic history of China 1949 present GDP per capita in China from 1000 to 2018 Historically China was one of the world s foremost economic powers for most of the two millennia from the 1st until the 19th century 38 72 73 74 75 China accounted for around one quarter of the global GDP until the late 1700s and approximately one third of the global GDP in 1820 as the Industrial Revolution was beginning in Great Britain 76 77 78 79 China s GDP in 1820 was six times as large as Britain s the largest economy in Europe and almost twenty times the GDP of the nascent United States 80 The government began its economic reforms in 1978 under the leadership of Deng Xiaoping 5 81 As a result China has the world s fastest growing major economy with growth rates averaging 10 over 30 years 82 83 Currently many scholars consider the Chinese economic model as an example of authoritarian capitalism 84 85 state capitalism 86 or party state capitalism 87 88 China sustained growth due to export relations its manufacturing sector and low wage workers 5 It is the only major economy to have avoided the COVID 19 economic decline 5 However China posted one of its worst economic performances in decades because of Covid in 2022 89 In 2023 IMF predicted China to continue being one of the fastest growing major economies 4 Wealth in China EditSee also List of Chinese administrative divisions by GDP List of Chinese administrative divisions by GDP per capita and List of Chinese prefecture level cities by GDP per capita China s real GDP growth by decade since 1960s with estimated rate for 2020s from the Bloomberg Terminal WRGDCHIN China has had the world s largest middle class population since 2015 90 and the middle class grew to a size of 400 million by 2018 91 and is projected to reach 1 2 billion by 2027 making up one fourth of the world total 92 As of 2018 China was first in the world in total number of billionaires and second in millionaires there were 658 Chinese billionaires 93 and 3 5 million millionaires 94 In 2019 China overtook the US as the home to the highest number of rich people in the world according to the global wealth report by Credit Suisse 95 96 In other words as of 2019 a hundred million Chinese are in the top ten percent of the wealthiest individuals in the world those who have a net personal wealth of at least 110 000 97 In 2020 China has the world s highest number of billionaires which is more than the US and India combined 98 and as of March 2021 the number of billionaires in China reach 1 058 with the combined wealth of US 4 5 trillion 99 According to the Hurun Global Rich List 2021 China is home to six of the world s top ten cities Beijing Shanghai Shenzhen Hong Kong Hangzhou and Guangzhou in the 1st 2nd 4th 5th 8th and 9th spots respectively by the highest number of billionaires which is more than any other country 99 As of January 2021 China had 85 female billionaires two thirds of the global total 100 According to the IMF on a per capita income basis China ranked 59th by GDP nominal and 73rd by GDP PPP in 2020 101 102 China ranked 3rd by GDP per capita nominal and 5th by GDP per capita PPP among countries with a population of over 100 million State owned enterprises EditMain article State owned enterprises of China China s SOEs perform important functions that benefit the state 103 Academic Wendy Leutert writes They contribute to central and local governments revenues through dividends and taxes support urban employment keep key input prices low channel capital towards targeted industries and technologies support sub national redistribution to poorer interior and western provinces and aid the state s response to natural disasters financial crises and social instability 103 As of 2017 China has more SOEs than any other country and the most SOEs among large national companies 103 State owned enterprises accounted for over 60 of China s market capitalization in 2019 104 and generated 40 of China s GDP of US 15 98 trillion dollars 101 36 trillion yuan in 2020 with domestic and foreign private businesses and investment accounting for the remaining 60 105 106 As of the end of 2019 the total assets of all China s SOEs including those operating in the financial sector reached US 58 97 trillion In 2015 107 Ninety one 91 of these SOEs belong to the 2020 Fortune Global 500 companies 108 Regional economies for China EditSee also Megalopolises in China and List of cities in China Distribution of GDP in Mainland China China s unequal transportation system combined with important differences in the availability of natural and human resources and in industrial infrastructure has produced significant variations in the regional economies of China 109 Economic development has generally been more rapid in coastal provinces than in the interior and there are large disparities in per capita income between regions The three wealthiest regions are the Yangtze River Delta in East China the Pearl River Delta in South China and Jingjinji region in North China It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions By 2035 China s four cities Shanghai Beijing Guangzhou and Shenzhen are projected to be among the global top ten largest cities by nominal GDP according to a report by Oxford Economics 110 GDP by administrative division Edit Main article List of Chinese administrative divisions by GDP List of Chinese provinces and SARs by GDP in billions of US 111 112 preliminary estimation average rate CN 6 3527 per U S dollarProvinces SARs Rank GDP CN Nominal GDP US China mainland 113 774 31 113 17 909 60 113 Guangdong 1 12 369 67 1 947 15Jiangsu 2 11 636 42 1 831 73Shandong 3 8 309 59 1 308 04Zhejiang 4 7 351 58 1 157 23Henan 5 5 888 74 926 97Sichuan 6 5 385 08 847 68Hubei 7 5 001 29 787 27Fujian 8 4 881 04 768 34Hunan 9 4 606 31 725 09Shanghai 10 4 321 48 680 27Anhui 11 4 295 92 676 23Hebei 12 4 039 13 635 81Beijing 13 4 026 96 633 90Shaanxi 14 2 980 09 469 11Jiangxi 15 2 961 97 466 25Chongqing 16 2 789 40 439 09Liaoning 17 2 758 41 434 21Yunnan 18 2 714 68 427 33Guangxi 19 2 474 09 389 45Hong Kong 20 2 385 29 369 72Shanxi 21 2 259 02 355 60Inner Mongolia 22 2 051 42 322 92Guizhou 23 1 958 64 308 32Xinjiang 24 1 598 37 251 60Tianjin 25 1 569 51 247 06Heilongjiang 26 1 487 92 234 22Jilin 27 1 323 56 208 35Gansu 28 1 024 33 161 24Hainan 29 647 52 101 92Ningxia 30 452 23 71 19Qinghai 31 334 66 52 68Tibet 32 208 02 32 75Macau 33 188 51 29 22Hong Kong and Macau Edit Main articles Economy of Hong Kong and Economy of Macau In accordance with the One country two systems policy the economies of the former British colony of Hong Kong and Portuguese colony of Macau are separate from the rest of China and each other Both Hong Kong and Macau are free to conduct and engage in economic negotiations with foreign countries as well as participating as full members in various international economic organizations such as the World Customs Organization the World Trade Organization and the Asia Pacific Economic Cooperation forum often under the names Hong Kong China and Macau China citation needed Development EditSee also List of administrative divisions of Greater China by Human Development Index China and other major developing economies by GDP per capita at purchasing power parity 1990 2013 as the rapid economic growth of China blue is readily apparent 114 The economic reforms implemented in 1978 helped to propel China into the ranks of the world s major economic powers The economic development of Shenzhen has caused the city to be referred to as the world s next Silicon Valley 115 116 117 118 The provinces in the coastal regions of China 119 tend to be more industrialized while regions in the hinterland are less developed China vs World by Nominal GDP per capita in 2020 120 To guide economic development the Chinese central government adopts five year plans that detail its economic priorities and essential policies The Fourteenth Five Year Plan 2021 2025 is currently being implemented placing an emphasis on consumption driven growth and technological self sufficiency while China transitions from being an upper middle income economy to a high income economy 121 The public sector plays a central role in China s economy 122 This development is also in line with the planning goals of the Chinese central government to achieve the Two Centenaries namely the material goal of China becoming a moderately prosperous society in all respects by 2021 and the modernization goal of China becoming a fully developed nation by 2049 the 100th anniversary of the founding of the People s Republic 123 Worlds regions by total wealth in trillions USD 2018 China s share of global export 1990 2019 Like Japan and South Korea before it China s economy has grown rapidly raising the income levels and living standards of its citizens while producing goods that are consumed globally Between 1981 and 2019 the percentage of the population living in extreme poverty decreased from 88 1 to 0 2 7 Its current account surplus increased by a factor of 53 between 1982 and 2015 from 5 7 billion to 304 billion 124 During this time China also became an industrial powerhouse moving beyond initial successes in low wage sectors like clothing and footwear to the increasingly sophisticated production of computers pharmaceuticals and automobiles China s factories generated 3 7 trillion real manufacturing value added more than the US South Korea Germany and the UK combined China s manufacturing sector benefits from the world s largest domestic market immense manufacturing scale and highly developed manufacturing supply chains 125 In mid 2014 China announced it was taking steps to boost the economy which at the time was running at a rate 7 4 per annum but was slowing The measures included plans to build a multi tier transport network comprising railways roads and airports to create a new economic belt alongside the Yangtze River 126 In 2021 it was reported that China s GDP could continue to grow on an average of 5 9 annually until 2025 according to the Centre for Economic and Business Research which also predicts that China will overtake the US economy by the end of the decade 127 Disputes over economic data Edit There exists disputes over reliability of official economic data Foreign and some Chinese sources have claimed that official Chinese government statistics overstate China s economic growth 128 However several Western academics and institutions have stated that China s economic growth is higher than indicated by official figures 129 Others such as the Economist Intelligence Unit state that while there s evidence China s GDP data is smoothed they believe that China s nominal and real GDP data are broadly accurate 130 Overestimating Edit Chinese provinces and cities have long been suspected of cooking their numbers with the focus on local government officials whose performance are often assessed based on how well their respective economies have performed 131 In recent years China claimed growth numbers have come under increased scrutiny with both domestic and international observers alleging the government has been inflating its economic output 128 132 A 2015 survey by The Wall Street Journal of 64 select economists found that 96 of respondents think China s GDP estimates don t accurately reflect the state of the Chinese economy 133 However more than half the economists in the survey estimated that China s annual growth was somewhere in the 5 to 7 range which represents robust growth Chinese premier Li Keqiang has said he is far from confident in the country s GDP estimates calling them man made and unreliable according to a leaked document from 2007 obtained by WikiLeaks He said government data releases especially the GDP numbers should be used for reference only 134 Analysts like Wilbur Ross and Donald Straszheim believe China s recent economic growth has been overstated and estimate a growth rate at around 4 or less 135 According to Chang Tai Hsieh an economist at the University of Chicago Booth School of Business and research associate at the National Bureau of Economic Research Michael Zheng Song an economics professor at the Chinese University of Hong Kong and coauthors China s economy was smaller than what the Chinese government stated in 2016 In their research paper published by the Brookings Institution they adjusted the historical GDP time series using value added tax data which they said are highly resistant to fraud and tampering 136 137 They found that China s economic growth may have been overstated by 1 7 percent each year between 2008 and 2016 meaning that the government may have been overstating the size of the Chinese economy by 12 16 percent in 2016 137 138 Issues with underestimating Edit Several Western academics and institutions have supported the claim that China s economy is likely to be underestimated 139 140 141 129 142 143 144 A paper by the US based National Bureau of Economic Research claimed that China s economic growth may be higher than what is reported by official statistics 145 An article by Hunter Clarka Maxim Pinkovskiya and Xavier Sala i Martin published by the Elsevier Science Direct in 2018 employs an innovative method of satellite recorded nighttime lights which the authors claim to be a best unbiased predictor of the economic growth in Chinese cities The results suggest that the Chinese economic growth rate is higher than the official reported data 139 The Li Keqiang index is an alternative measurement of Chinese economic performance that uses three variables Li preferred 146 Satellite measurements of light pollution are used by some analysts to model Chinese economic growth and suggest recent growth rate numbers in Chinese official data are more reliable although are likely to be smoothed 147 According to an article by the Federal Reserve Bank of St Louis China s official statistics are of a high quality compared to other developing middle income and low income countries In 2016 China was at the 83rd percentile of middle and low income countries up from the 38th percentile in 2004 148 A study by the Federal Reserve Bank of San Francisco found that China s official GDP statistics are significantly and positively correlated with externally verifiable measures of economic activity such as import and export data from China s trade partners suggesting that China s economic growth was no slower than the official figures indicated 129 The study by Daniel Rosen and Beibei Bao published by the Center for Strategic and International Studies in 2015 showed that GDP in 2008 was actually 13 16 percent bigger than the official data while 2013 GDP was accurately at 10 5 trillion rather than the official figure at 9 5 trillion 142 According to a research conducted by Arvind Subramanian a former economist at the International Money Fund IMF and a senior fellow at the Peterson Institute for International Economics the size of the Chinese economy by Purchasing Power Parity in 2010 was about 14 8 trillion rather than an official estimate at 10 1 trillion by IMF meaning that China s GDP was underestimated by 47 percent 149 Regional development Edit The East Coast w existing development programmes Rise of Central China Revitalize Northeast China China Western Development These strategies are aimed at the relatively poorer regions in China in an attempt to prevent widening inequalities China Western Development designed to increase the economic situation of the western provinces through investment and development of natural resources Revitalize Northeast China to rejuvenate the industrial bases in Northeast China It covers the three provinces of Heilongjiang Jilin and Liaoning as well as the five eastern prefectures of Inner Mongolia Rise of Central China Plan to accelerate the development of its central regions It covers six provinces Shanxi Henan Anhui Hubei Hunan and Jiangxi Third Front focused on the southwestern provinces Foreign investment abroad Go Global to encourage its enterprises to invest overseas Macroeconomic trends EditSee also Historical GDP of China The following table shows the main economic indicators in 1980 2021 with IMF staff stimtates in 2022 2027 Inflation below 5 is in green 150 Year GDP in Bil US PPP GDP per capita in US PPP GDP in Bil US nominal GDP per capita in US nominal GDP growth real Inflation rate in Percent Unemployment in Percent Government debt in of GDP 1980 302 8 306 7 303 0 307 0 7 9 n a 4 9 n a1981 348 3 348 1 288 7 288 5 5 1 2 5 3 8 n a1982 403 1 396 6 284 6 280 0 9 0 2 0 3 2 n a1983 464 1 450 6 305 4 296 5 10 8 2 0 2 3 n a1984 554 0 530 9 314 2 301 1 15 2 2 7 1 9 n a1985 648 7 612 8 310 1 293 0 13 5 9 3 1 8 n a1986 718 6 668 4 300 9 279 9 8 6 6 5 2 0 n a1987 822 5 752 6 327 7 299 8 11 7 7 3 2 0 n a1988 946 9 852 9 408 7 368 1 11 2 18 8 2 0 n a1989 1 025 4 909 8 458 2 406 5 4 2 18 0 2 6 n a1990 1 105 1 966 6 396 6 346 9 3 9 3 1 2 5 n a1991 1 248 7 1 078 1 413 2 356 8 9 3 3 4 2 3 n a1992 1 459 6 1 245 7 492 1 420 0 14 3 6 4 2 3 n a1993 1 701 5 1 435 7 617 4 521 0 13 9 14 7 2 6 n a1994 1 964 3 1 639 0 561 7 468 7 13 0 24 1 2 8 n a1995 2 225 5 1 837 4 731 0 603 5 11 0 17 1 2 9 21 6 1996 2 491 0 2 035 3 860 5 703 1 9 9 8 3 3 0 21 4 1997 2 768 3 2 239 3 958 0 774 9 9 2 2 8 3 1 20 6 1998 3 019 4 2 420 1 1 024 2 820 9 7 9 0 8 3 1 20 7 1999 3 297 1 2 621 2 1 088 3 865 2 7 7 1 4 3 1 21 9 2000 3 657 5 2 885 7 1 205 5 951 2 8 5 0 4 3 1 23 0 2001 4 051 0 3 174 1 1 333 6 1 045 0 8 3 0 7 3 6 24 6 2002 4 489 1 3 494 7 1 465 8 1 141 1 9 1 0 8 4 0 25 9 2003 5 036 5 3 897 4 1 657 0 1 282 2 10 0 1 2 4 3 26 8 2004 5 694 7 4 381 0 1 949 4 1 499 7 10 1 3 9 4 2 26 4 2005 6 542 3 5 003 4 2 290 0 1 751 4 11 4 1 8 4 2 26 3 2006 7 601 3 5 782 8 2 754 1 2 095 2 12 7 1 5 4 1 25 6 2007 8 918 9 6 750 2 3 555 7 2 691 0 14 2 4 8 4 0 29 2 2008 9 961 9 7 501 3 4 577 3 3 446 7 9 6 5 9 4 2 27 2 2009 10 972 8 8 222 4 5 089 0 3 813 4 9 4 0 7 4 3 34 6 2010 12 283 0 9 160 2 6 033 8 4 499 8 10 6 3 3 4 1 33 9 2011 13 735 7 10 180 9 7 492 2 5 553 2 9 6 5 4 4 1 33 8 2012 15 137 5 11 136 9 8 539 6 6 282 7 7 8 2 6 4 1 34 4 2013 16 277 4 11 905 1 9 624 9 7 039 6 7 8 2 6 4 1 37 0 2014 17 200 7 12 496 3 10 524 2 7 645 9 7 4 2 0 4 1 40 0 2015 17 880 3 12 926 2 11 113 5 8 034 3 7 0 1 4 4 1 41 5 2016 18 701 7 13 432 0 11 226 9 8 063 4 6 9 2 0 4 0 48 2 2017 19 814 1 14 151 8 12 265 3 8 760 3 6 9 1 6 3 9 51 7 2018 21 657 0 15 409 7 13 841 8 9 848 9 6 8 2 1 3 8 53 8 2019 23 356 2 16 563 8 14 340 6 10 170 1 6 0 2 9 3 6 57 2 2020 24 168 0 17 114 7 14 862 6 10 525 0 2 2 2 4 4 2 68 1 2021 27 206 1 19 259 6 17 744 6 12 561 7 8 1 0 9 4 0 71 5 2022 30 074 4 21 290 9 18 321 2 12 970 3 3 2 2 2 4 2 76 9 2023 32 529 2 23 038 3 19 244 0 13 629 3 4 4 2 2 4 1 84 1 2024 34 705 7 24 599 3 20 699 1 14 671 5 4 5 1 9 3 9 89 8 2025 36 988 5 26 248 0 22 404 0 15 898 5 4 6 2 0 3 8 94 8 2026 39 427 3 28 022 1 24 295 4 17 267 4 4 6 2 0 3 7 99 2 2027 42 050 2 29 943 8 26 437 7 18 826 2 4 6 2 0 3 6 102 8 Inflation Edit Chinese inflation 1987 2022 During the winter of 2007 2008 inflation ran about 7 on an annual basis rising to 8 7 in statistics for February 2008 released in March 2008 151 152 153 Shortages of gasoline and diesel fuel developed in the fall of 2007 due to reluctance of refineries to produce fuel at low prices set by the state These prices were slightly increased in November 2007 with fuel selling for 2 65 a gallon still slightly below world prices Price controls were in effect on numerous basic products and services but were ineffective with food prices of which were rising at an annual rate of 18 2 in November 2007 154 155 The problem of inflation has caused concern at the highest levels of the Chinese government On 9 January 2008 the government issued the following statement on its official website The Chinese government decided on Wednesday to take further measures to stabilize market prices and increase the severity of punishments for those guilty of driving up prices through hoarding or cheating 156 157 Pork is an important part of the Chinese economy with a per capita consumption of 90 grams per day The worldwide rise in the price of animal feed associated with increased production of ethanol from corn resulted in steep rises in pork prices in China in 2007 Increased cost of production interacted badly with increased demand resulting from rapidly rising wages The state responded by subsidizing pork prices for students and the urban poor and called for increased production Release of pork from the nation s strategic pork reserve was considered 158 By January 2008 the inflation rate rose to 7 1 which BBC News described as the highest inflation rate since 1997 due to the winter storms that month 159 China s inflation rate jumped to a new decade high of 8 7 percent in February 2008 after severe winter storms disrupted the economy and worsened food shortages the government said 11 March 2008 160 Throughout the summer and fall however inflation fell again to a low of 6 6 in October 2008 161 By November 2010 the inflation rate rose up to 5 1 driven by an 11 7 increase in food prices year on year According to the bureau industrial output went up 13 3 percent As supplies have run short prices for fuel and other commodities have risen 162 Investment cycles Edit Beijing Financial Street Chinese investment has always been highly cyclical 163 Ever since the 1958 Great Leap Forward growth in fixed capital formation has typically peaked about every five years Recent peaks occurred in 1978 1984 1988 1993 2003 and 2009 The corresponding troughs were in 1981 1986 1989 1997 and 2005 citation needed In China the majority of investment is carried out by entities that are at least partially state owned Most of these are under the control of local governments Thus booms are primarily the result of perverse incentives at the local government level 164 Unlike entrepreneurs in a free enterprise economy Chinese local officials are motivated primarily by political considerations As their performance evaluations are based to a large extent on GDP growth within their jurisdictions they have a strong incentive to promote large scale investment projects 165 166 They also don t face any real bankruptcy risk When localities get into trouble they are invariably bailed out by state owned banks Under these circumstances overinvestment is inevitable citation needed A typical cycle begins with a relaxation of central government credit and industrial policy This allows local governments to push investment aggressively both through state sector entities they control directly and by offering investment promotion incentives to private investors and enterprises outside their jurisdictions 167 The resulting boom puts upward pressure on prices and may also result in shortages of key inputs such as coal and electricity as was the case in 2003 168 Once inflation has risen to a level at which it begins to threaten social stability the central government will intervene by tightening enforcement of industrial and credit policy Projects that went ahead without required approvals will be halted Bank lending to particular types of investors will be restricted Credit then becomes tight and investment growth begins to decline 169 Eventually such centrally imposed busts alleviate shortages and bring inflation down to acceptable levels At that point the central government yields to local government demands for looser policy and the cycle begins again citation needed Macroeconomic issues EditSee also Chinese economic reform Environmental transition Edit Main articles Environmental policy in China Water supply and sanitation in China and health in China Historical annual CO2 emissions for the top six countries and confederations Over the years large subsidies were built into the price structure of certain commodities and these subsidies grew substantially in the late 1970s and 1980s 170 By 2010 rapidly rising wages and a general increase in the standard of living had put increased energy use on a collision course with the need to reduce carbon emissions in order to control global warming 171 There were diligent efforts to increase energy efficiency and increase use of renewable sources over 1 000 inefficient power plants had been closed but projections continued to show a dramatic rise in carbon emissions from burning fossil fuels 172 Since the late 2010s a reduction of state backed subsidies has negatively impacted several Chinese companies with BYD Auto being one of them 173 174 175 176 While not the largest source of historical cumulative emissions today China accounts for one quarter of global greenhouse gas emissions 177 On a per capita basis China s emissions in 2019 9 tonnes CO2 equivalent tCO2e per year surpass those of the European Union 7 6 tCO2e but remain slightly below the Organisation for Economic Co operation and Development OECD average 10 7 tCO2e and well below the United States average 17 6 tCO2e However the carbon intensity of China s GDP the amount of carbon used to generate a unit of output remains relatively high 71 To avoid the long term socioeconomic cost 178 of environmental pollution in China 179 180 it has been suggested by Nicholas Stern and Fergus Green of the Grantham Research Institute on Climate Change and the Environment that the economy of China be shifted to more advanced industrial development with low carbon dioxide emissions and better allocation of national resources to innovation and R amp D for sustainable economic growth in order to reduce the impact of China s heavy industry This is in accord with the planning goals of the central government 181 Chinese leader and Communist Party general secretary Xi Jinping s Chinese Dream is described as achieving the Two Centenaries namely the material goal of China becoming a moderately prosperous society by 2021 and the modernization goal of China becoming a fully developed nation by 2049 the 100th anniversary of the founding of the People s Republic 182 National debt Edit Main article National debt of China In 2014 many analysts expressed concern over the overall size of China s government debt 183 184 185 186 At the end of 2014 the International Monetary Fund reported that China s general government gross debt to GDP ratio was 41 44 percent 187 188 In 2015 a report by the International Monetary Fund concluded that China s public debt is relatively low and on a stable path in all standard stress tests except for the scenario with contingent liability shocks such as a large scale bank recapitalization or financial system bailout to deal for example with a potential rise in NPLs from deleveraging 189 Chinese authorities have dismissed analysts worries insisting the country still has room to increase government debt 190 Former Fed Chairman Ben Bernanke earlier in 2016 commented that the debt pile facing China is an internal problem given the majority of the borrowings was issued in local currency 191 Many economists have expressed the same views as Bernanke 192 A 2019 survey by the OECD found that China s corporate debt is higher than other major countries 193 Shadow banking has risen in China posing risks to the financial system 194 195 As of 2020 China s total government debt stands at approximately RMB 46 trillion US 7 0 trillion equivalent to about 45 of GDP 196 In comparison the United States had a government debt of about 28 trillion at the end of 2020 approximately 128 of GDP 197 Regulatory environment and government revenues Edit Main article Taxation in China Though China s economy has expanded rapidly its regulatory environment has not kept pace Since Deng Xiaoping s open market reforms the growth of new businesses has outpaced the government s ability to regulate them This has created a situation where businesses faced with mounting competition and poor oversight take drastic measures to increase profit margins often at the expense of consumer safety This issue became more prominent in 2007 with a number of restrictions being placed on problematic Chinese exports by the United States 198 From the 1950s to the 1980s the central government s revenues derived chiefly from the profits of the state enterprises which were remitted to the state Some government revenues also came from taxes of which the most important was the general industrial and commercial tax citation needed The trend however has been for remitted profits of the state enterprises to be replaced with taxes on those profits Initially this tax system was adjusted so as to allow for differences in the market capitalization and pricing situations of various firms but more uniform tax schedules were introduced in the early 1990s In addition personal income and value added taxes were implemented at that time citation needed Financial and banking system Edit China bond yields 30 year bond 10 year bond 2 year bond 1 year bond Main articles Banking in China Foreign exchange reserves of China Hedge fund industry in China and China Venture Capital Association Most of China s financial institutions are state owned and governed 199 The chief instruments of financial and fiscal control are the People s Bank of China PBC and the Ministry of Finance both under the authority of the State Council The People s Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks It fulfills many of the functions of other central and commercial banks It issues the currency controls circulation and plays an important role in disbursing budgetary expenditures Additionally it administers the accounts payments and receipts of government organizations and other bodies which enables it to exert thorough supervision over their financial and general performances in consideration of the government s economic plans The PBC is also responsible for international trade and other overseas transactions Remittances by overseas Chinese are managed by the Bank of China BOC which has a number of branch offices in several countries citation needed Other financial institutions that are crucial include the China Development Bank CDB which funds economic development and directs foreign investment the Agricultural Bank of China ABC which provides for the agricultural sector the China Construction Bank CCB which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises and the Industrial and Commercial Bank of China ICBC which conducts ordinary commercial transactions and acts as a savings bank for the public citation needed China initiated the founding of the Asian Infrastructure Investment Bank in 2015 and the Silk Road Fund in 2014 an investment fund of the Chinese government to foster increased investment and provide financial supports in countries along the One Belt One Road 200 Shanghai Stock Exchange SSE China s economic reforms greatly increased the economic role of the banking system In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan in practice 75 of state bank loans go to State Owned Enterprises SOEs 201 Even though nearly all investment capital was previously provided on a grant basis according to the state plan policy has since the start of the reform shifted to a loan basis through the various state directed financial institutions It is estimated that as of 2011 14 trillion Yuan in loans was outstanding to local governments Much of that total is believed by outside observers to be nonperforming 202 Increasing amounts of funds are made available through the banks for economic and commercial purposes Foreign sources of capital have also increased China has received loans from the World Bank and several United Nations programs as well as from countries particularly Japan and to a lesser extent commercial banks Hong Kong has been a major conduit of this investment as well as a source itself On 23 February 2012 the PBC evinced its inclination to liberalise its capital markets when it circulated a telling ten year timetable 203 Following on the heels of this development Shenzhen banks were able to launch cross border yuan remittances for individuals a significant shift in the PBC s capital control strictures since Chinese nationals had been previously barred from transferring their yuan to overseas account 204 China has four of the world s top ten most competitive financial centers Shanghai Hong Kong Beijing and Shenzhen more than any other country 69 China has three of the world s ten largest stock exchanges Shanghai Hong Kong and Shenzhen both by market capitalization and by trade volume 70 205 As of 12 October 2020 the total market capitalization of Mainland Chinese stock markets consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange topped US 10 trillion excluding the Hong Kong Stock Exchange with about US 5 9 trillion 206 As of the end of June 2020 foreign investors had bought a total of US 440 billion in Chinese stocks representing about 2 9 of the total value and indicating that foreign investors scooped up a total of US 156 6 billion in the stocks just in the first half of 2020 207 The total value of China s bond market topped US 15 4 trillion ranked above that of Japan and the U K and second only to that of the U S with US 40 trillion as of the beginning of September 2020 208 As of the end of September 2020 foreign holdings of Chinese bonds reached US 388 billion or 2 5 of the total value notwithstanding an increase by 44 66 year on year 209 China has the world s largest total banking sector assets of around 45 838 trillion 309 41 trillion CNY with 42 063 trillion in total deposits and other liabilities 210 211 Stock markets Edit Shanghai Composite Index 1991 2022 This section needs to be updated The reason given is primarily focused on stock market activity during 2014 2015 Please help update this article to reflect recent events or newly available information August 2022 Further information 2015 2016 Chinese stock market turbulence and Chinese stock bubble of 2007 Cartoon that sometimes accompanied reprints of the People s Daily commentary published 21 April 2015 touting the Chinese bull market What s a bubble Tulips and Bitcoins are bubbles 212 As of 2014 and the first quarter of 2015 the financial industry had been providing about 1 5 of China s 7 annual growth rate 213 Despite slowing of the economy as of June 2015 the Chinese stock index the CSI 300 Index which is based on 300 stocks traded in the Shanghai and Shenzhen stock exchanges had risen nearly 150 over the past twelve months In an effort to forestall damage from collapse of a possible economic bubble fueled by margin trading the central government raised requirements for margin lending Economic damage from a crash in 2007 2008 was limited due to margin lending being highly restricted 214 In early July after a fall in the markets of nearly 30 from their 12 June highs there were efforts by blue chip often state owned firms the Chinese securities industry and the central government to stabilize the market by buying back stock and increasing purchases of the stock of established firms however much of the volatility has been in smaller less established firms that had been heavily invested in by unsophisticated often working class investors who had purchased stock based solely on its rapid increase in valuation 215 80 of Chinese stocks are owned by individual investors many novices 216 As of 10 July 2015 efforts by the China Securities Finance Corporation CFS a firm created by China s commodities and stock exchanges to finance trades 217 had apparently stabilized the market 218 219 Major Chinese securities firms were required by the China Securities Regulatory Commission to buy and hold a substantial amount of securities affected by the downturn Using funds supplied by the central bank and commercial banks the China Securities Finance Corporation purchased enough stocks to halt the slide acquiring as much as 5 of the stock in some firms Lines of credit were extended by CFS to 21 securities firms some of which also purchased up to 5 of some companies stocks Some of the small cap stocks acquired may be overvalued 217 220 Chinese stocks fell about 10 during the last week of July 2015 with record breaking losses on Monday 221 Currency system Edit See also Renminbi USD CNY exchange rate 1981 2022 The renminbi people s currency is the currency of China denominated as the yuan subdivided into 10 jiao or 100 fen The renminbi is issued by the People s Bank of China the monetary authority of China The ISO 4217 abbreviation is CNY although also commonly abbreviated as RMB As of 2005 the yuan was generally considered by outside observers to be undervalued by about 30 40 222 223 However in 2017 the IMF stated that the yuan was correctly valued 224 The renminbi is held in a floating exchange rate system managed primarily against the US dollar On 21 July 2005 China revalued its currency by 2 1 against the US dollar and since then has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent citation needed The rate of exchange Chinese yuan per US 1 on 31 July 2008 was RMB 6 846 in mid 2007 was RMB 7 45 while in early 2006 was RMB 8 07 US 1 8 2793 yuan January 2000 8 2783 1999 8 2790 1998 8 2898 1997 8 3142 1996 8 3514 1995 citation needed There is a complex relationship between China s balance of trade inflation measured by the consumer price index and the value of its currency Despite allowing the value of the yuan to float China s central bank has decisive ability to control its value with relationship to other currencies Inflation in 2007 reflecting sharply rising prices for meat and fuel is probably related to the worldwide rise in commodities used as animal feed or as fuel Thus rapid rises in the value of the yuan permitted in December 2007 are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more 225 An article published in International Review of Economics amp Finance in 2010 by Mete Feridun University of Greenwich Business School and his colleagues provide empirical evidence that financial development fosters economic growth in China 226 During the week of 10 August 2015 against the background of a slowing Chinese economy and appreciation of the U S dollar the People s Bank of China devalued the renminbi by about 5 227 The devaluation was accomplished by pegging the official rate to closing market rates A market based representative exchange rate against the U S dollar is one of the requirements for designation of a currency as one with Special Drawing Rights SDR by the International Monetary Fund IMF one of China s goals 228 Since the late 2000s China has sought to internationalize the renminbi As of 2013 the RMB is the 8th most widely traded currency in the world 229 In November 2015 in advance of G 20 and IMF meetings IMF director Christine Lagarde announced her support for adding the yuan to the SDR currency basket The announcement gave green light to official approval at 30 November IMF meeting 230 The internationalization of the Chinese economy continues to affect the standardized economic forecast officially launched in China by the Purchasing Managers Index in 2005 As China s economy grows so does China s Renminbi which undergoes the process needed for its internationalization 231 Sectors EditAmong the Fortune 500 companies in 2022 there are 136 in China 232 As of 2022 China was home to 351 largest listed companies measured by revenue in the Fortune Global 2000 ranking second globally 233 China is also home to more than two hundred privately held technology startups tech unicorns each with a valuation of over 1 billion the highest number in the world 234 Agriculture Edit Main article Agriculture in China This section needs additional citations for verification Please help improve this article by adding citations to reliable sources in this section Unsourced material may be challenged and removed January 2021 Learn how and when to remove this template message Peanut harvest in Jiangxia District Hubei China is the world s largest producer and consumer of agricultural products and some 300 million Chinese farm workers are in the industry mostly laboring on pieces of land about the size of U S farms Virtually all arable land is used for food crops China is the world s largest producer of rice and is among the principal sources of wheat corn maize tobacco soybeans potatoes sorghum peanuts tea millet barley oilseed pork and fish Major non food crops including cotton other fibers and oilseeds furnish China with a small proportion of its foreign trade revenue Agricultural exports such as vegetables and fruits fish and shellfish grain and meat products are exported to Hong Kong Yields are high because of intensive cultivation for example China s cropland area is only 75 of the U S total but China still produces about 30 more crops and livestock than the United States China hopes to further increase agricultural production through improved plant stocks fertilizers and technology According to the government statistics issued in 2005 235 after a drop in the yield of farm crops in 2000 output has been increasing annually Production of wheat from 1961 to 2004 data from FAO in 2005 y axis production in metric tons According to the United Nations World Food Program in 2003 China fed twenty percent of the world s population with only seven percent of the world s arable land 236 China ranks first worldwide in farm output and as a result of topographic and climatic factors only about 10 15 percent of the total land area is suitable for cultivation Of this slightly more than half is unirrigated and the remainder is divided roughly equally between paddy fields and irrigated areas Nevertheless about 60 percent of the population lives in the rural areas and until the 1980s a high percentage of them made their living directly from farming Since then many have been encouraged to leave the fields and pursue other activities such as light manufacturing commerce and transportation and by the mid 1980s farming accounted for less than half of the value of rural output Today agriculture contributes only 13 of China s GDP Animal husbandry constitutes the second most important component of agricultural production China is the world s leading producer of pigs chickens and eggs and it also has sizable herds of sheep and cattle Since the mid 1970s greater emphasis has been placed on increasing the livestock output China has a long tradition of ocean and freshwater fishing and of aquaculture Pond raising has always been important and has been increasingly emphasized to supplement coastal and inland fisheries threatened by overfishing and to provide such valuable export commodities as prawns China is also unmatched in the size and reach of its fishing armada with anywhere from 200 000 to 800 000 boats some as far afield as Argentina Fueled primarily by government subsidies its growth and activities have largely gone unchecked 237 Timber transported from a woodlot in the hills of Zhangpu County Fujian Environmental problems such as floods drought and erosion pose serious threats to farming in many parts of the country The wholesale destruction of forests gave way to an energetic reforestation program that proved inadequate and forest resources are still fairly meagre 238 The principal forests are found in the Qin Mountains and the central mountains and on the Yunnan Guizhou Plateau Because they are inaccessible the Qinling forests are not worked extensively and much of the country s timber comes from Heilongjiang Jilin Sichuan and Yunnan Western China comprising Tibet Xinjiang and Qinghai has little agricultural significance except for areas of floriculture and cattle raising Rice China s most important crop is dominant in the southern provinces and many of the farms here yield two harvests a year In the north wheat is of the greatest importance while in central China wheat and rice vie with each other for the top place Millet and kaoliang a variety of grain sorghum are grown mainly in the northeast and some central provinces which together with some northern areas also provide considerable quantities of barley Most of the soybean crop is derived from the north and the northeast corn maize is grown in the center and the north while tea comes mainly from the warm and humid hilly areas of the south Cotton is grown extensively in the central provinces but it is also found to a lesser extent in the southeast and in the north Tobacco comes from the center and parts of the south Other important crops are potatoes sugar beets and oilseeds Fish ponds near Daye Hubei In the past decade the government has been encouraging agricultural mechanization and land consolidation to raise yields and compensate for the loss of rural workers who have migrated to the cities 239 According to the most recent statistics by the UN Food and Agriculture Organization the annual growth rate of agricultural mechanization in China is 6 38 percent By 2014 the integrated mechanization rate had risen to nearly 60 percent with the rate for wheat surpassing 90 percent and that for maize approaching 80 percent 240 In addition to standard agricultural equipment like tractors China s agriculture cooperatives have begun using high tech equipment including unmanned aerial vehicles which are used to spay crops with pesticides 241 Good progress has been made in increasing water conservancy and about half the cultivated land is under irrigation In the late 1970s and early 1980s economic reforms were introduced First of all this began with the shift of farming work to a system of household responsibility and a phasing out of collectivized agriculture Later this expanded to include a gradual liberalization of price controls fiscal decentralization massive privatization of state enterprises thereby allowing a wide variety of private enterprises in the services and light manufacturing the foundation of a diversified banking system but with large amounts of state control the development of a stock market and the opening of the economy to increased foreign trade and foreign investment Housing and construction Edit Main article Real estate in China The real estate industry is about 20 of the Chinese economy 242 Compared to other nations investing in stock markets and other assets is harder due to currency controls within the country As a result many Chinese citizens own multiple properties as they are one of the few ways in which it is comparatively easy to grow and preserve wealth Due to this many economists have speculated about a property bubble within the Chinese economy 243 On 16 July 2020 the Wall Street Journal reported that the housing market within the Chinese economy had grown to US 52 trillion eclipsing the US 2008 housing market before the Financial Crisis 244 Despite the possibility of a housing bubble many people still choose to invest their assets in real estate market On 19 December 2021 according to a report by McKinsey Global Institute China s net worth reached 120 trillion in 2020 to overtake the U S s 89 trillion as a red hot real estate market drove up property value 245 Energy and mineral resources Edit See also Energy policy of China This section needs additional citations for verification Please help improve this article by adding citations to reliable sources in this section Unsourced material may be challenged and removed January 2021 Learn how and when to remove this template message Electricity production in China 1980 2019 Electricity Production 6 5 trillion kWh 2017 246 Consumption 2 8248 trillion kWh 2006 Exports 18 7 billion kwh 2015 247 Imports 6 2 billion kwh 2015 247 Electricity production by source Thermal 70 4 67 1 from coal 2017 246 Hydro 17 8 2017 Renewables 7 3 2017 Nuclear 3 8 2017 Other 0 7 2017 Oil Production 3 631 000 bbl d 577 300 m3 d 2005 Consumption 6 534 000 bbl d 1 038 800 m3 d 2005 and expected 9 300 000 bbl d 1 480 000 m3 d in 2030 Exports 443 300 bbl d 70 480 m3 d 2005 Imports 10 110 000 bbl d 1 607 000 m3 d 2019 248 Net imports 2 740 000 barrels per day 436 000 m3 d 2005 Proved reserves 16 3 Gbbl 2 59 10 9 m3 1 January 2006 Natural gas Production 47 88 km3 2005 est Consumption 44 93 km3 2005 est Exports 2 944 km3 2005 Imports 0 m3 2005 Proved reserves 1 448 km3 1 January 2006 est Since 1980 China s energy production has grown dramatically as has the proportion allocated to domestic consumption Some 80 percent of all power is generated from fossil fuel at thermal plants with about 17 percent at hydroelectric installations only about two percent is from nuclear energy mainly from plants located in Guangdong and Zhejiang 249 Though China has rich overall energy potential most have yet to be developed In addition the geographical distribution of energy puts most of these resources relatively far from their major industrial users Basically the northeast is rich in coal and oil the central part of north China has abundant coal and the southwest has immense hydroelectric potential But the industrialized regions around Guangzhou and the Lower Yangtze region around Shanghai have too little energy while there is relatively little heavy industry located near major energy resource areas other than in the southern part of the northeast Due in large part to environmental concerns China has wanted to shift China s current energy mix from a heavy reliance on coal which accounts for 70 75 of China s energy toward greater reliance on oil natural gas renewable energy and nuclear power China has closed thousands of coal mines over the past five to ten years to cut overproduction According to Chinese statistics this has reduced coal production by over 25 Since 1993 China has been a net importer of oil a large portion of which comes from the Middle East Imported oil accounts for 20 of the processed crude in China Net imports are expected to rise to 3 5 million barrels 560 000 m3 per day by 2010 China is interested in diversifying the sources of its oil imports and has invested in oil fields around the world China is developing oil imports from Central Asia and has invested in Kazakhstani oil fields 250 Beijing also plans to increase China s natural gas production which currently accounts for only 3 of China s total energy consumption and incorporated a natural gas strategy in its 10th Five Year Plan 2001 2005 with the goal of expanding gas use from a 2 share of total energy production to 4 by 2005 gas accounts for 25 of U S energy production Analysts expect China s consumption of natural gas to more than double by 2010 The 11th Five Year Program 2006 10 announced in 2005 and approved by the National People s Congress in March 2006 called for greater energy conservation measures including development of renewable energy sources and increased attention to environmental protection Guidelines called for a 20 reduction in energy consumption per unit of GDP by 2010 Moving away from coal towards cleaner energy sources including oil natural gas renewable energy and nuclear power is an important component of China s development program Beijing also intends to continue to improve energy efficiency and promote the use of clean coal technology China has abundant hydroelectric resources the Three Gorges Dam for example will have a total capacity of 18 gigawatts when fully on line projected for 2009 In addition the share of electricity generated by nuclear power is projected to grow from 1 in 2000 to 5 in 2030 China s renewable energy law which went into effect in 2006 calls for 10 of its energy to come from renewable energy sources by 2020 As of 2021 China is facing its worst energy crisis in decades 251 The Guardian reported that Companies in the industrial heartlands have been told to limit consumption residents have been subjected to rolling blackouts and annual light shows have been cancelled 252 China has natural resources with an estimated worth of 23 trillion 90 of which are coal and rare earth metals 253 Mining Edit See also Gold mining in China Outdated mining and ore processing technologies are being replaced with modern techniques but China s rapid industrialization requires imports of minerals from abroad In particular iron ore imports from Australia and the United States have soared in the early 2000s as steel production rapidly outstripped domestic iron ore production Also China has become increasingly active in several African countries to mine the reserves it requires for economic growth particularly in countries such as the Democratic Republic of the Congo and Gabon The major areas of production in 2004 were coal nearly two billion tons iron ore 310 million tons crude petroleum 175 million tons natural gas 41 million cubic meters antimony ore 110 000 tons tin concentrates 110 000 tons nickel ore 64 000 tons tungsten concentrates 67 000 tons unrefined salt 37 million tons vanadium 40 000 tons and molybdenum ore 29 000 tons In order of magnitude produced minerals were bauxite gypsum barite magnesite talc and related minerals manganese ore fluorspar and zinc In addition China produced 2 450 tons of silver and 215 tons of gold in 2004 The mining sector accounted for less than 0 9 of total employment in 2002 but produced about 5 3 of total industrial production In 2019 the country was the world s largest producer of gold 254 3rd largest world producer of copper 255 3rd worldwide producer of silver 256 the world s largest producer of sulfur 257 the world s largest producer of phosphate 258 the world s largest producer of molybdenum 259 the world s largest producer of lead 260 largest world producer of zinc 261 the world s largest producer of vanadium 262 largest world producer of tin 263 the world s largest producer of titanium 264 the world s largest producer of antimony 265 2nd largest worldwide producer of bauxite 266 3rd largest world producer of iron ore 267 6th largest world producer of manganese 268 7th largest world producer of nickel 269 10th largest world producer of cobalt 270 in addition to being the world s largest producer of salt 271 It was the world s 8th largest producer of uranium in 2018 272 Furthermore it is the largest world producer of jade and one of the world producers of topaz tourmaline peridot and diamond Until the end of 2019 a total of 173 types of minerals have been discovered in China including 13 types of energy materials 59 metals 95 types of non metallic minerals and six types of water and gases In 2019 the newly discovered geological reserves of oil were 1 12 billion tonnes of which 160 million tonnes were proven technically recoverable reserves The newly discovered geological reserves of shale gas were 764 42 billion cubic metres of which 183 84 billion cubic metres were proven reserves With respect to non oil and gas minerals the evaluation states that China has great prospecting potential for 24 major minerals including coal iron ore manganese chromite copper lead zinc bauxite tungsten tin molybdenum antimony nickel gold silver lithium pyrites phosphate rock potash magnesite fluorite boron and barite 273 Hydroelectric resources Edit Main article Hydroelectricity in China Three Gorges Dam China has an abundant potential for hydroelectric power production due to its considerable river network and mountainous terrain Most of the total hydroelectric capacity is situated in the southwest of the country where coal supplies are poor but demand for energy is rising swiftly The potential in the northeast is fairly small but it was there that the first hydroelectric stations were built by the Japanese during its occupation of Manchuria 274 Thirteen years in construction at a cost of 24 billion the immense Three Gorges Dam across the Yangtze River was essentially completed in 2006 and produced more than 100TWh of energy in 2018 Coal Edit Main article Coal in China Coal mining in Inner Mongolia China is well endowed with mineral resources 275 the most important of which is coal China s mineral resources include large reserves of coal and iron ore plus adequate to abundant supplies of nearly all other industrial minerals Although coal deposits are widely scattered some coal is found in every province most of the total is located in the northern part of the country The province of Shanxi in fact is thought to contain about half of the total other important coal bearing provinces include Heilongjiang Liaoning Jilin Hebei and Shandong 276 Apart from these northern provinces significant quantities of coal are present in Sichuan and there are some deposits of importance in Guangdong Guangxi Yunnan and Guizhou 276 A large part of the country s reserves consists of good bituminous coal but there are also large deposits of lignite Anthracite is present in several places especially Liaoning Guizhou and Henan but overall it is not very significant 277 To ensure a more even distribution of coal supplies and to reduce the strain on the less than adequate transportation network the authorities pressed for the development of a large number of small locally run mines throughout the country This campaign was energetically pursued after the 1960s with the result that thousands of small pits have been established and they produce more than half the country s coal This output however is typically expensive and is used for local consumption It has also led to a less than stringent implementation of safety measures in these unregulated mines which cause several thousands of deaths each year 278 Coal makes up the bulk of China s energy consumption 70 in 2005 55 in 2021 and China is the largest producer and consumer of coal in the world As China s economy continues to grow China s coal demand is projected to rise significantly Although coal s share of China s overall energy consumption will decrease coal consumption will continue to rise in absolute terms China s continued and increasing reliance on coal as a power source has contributed significantly to putting China on the path to becoming the world s largest emitter of acid rain causing sulfur dioxide and greenhouse gases including carbon dioxide As of 2015 falling coal prices resulted in layoffs at coal mines in the northeast 279 Oil and natural gas Edit Main article Petroleum industry in China Chinese oil reserves China s onshore oil resources are mostly located in the Northeast and in Xinjiang Gansu Qinghai Sichuan Shandong and Henan provinces Oil shale is found in a number of places especially at Fushun in Liaoning where the deposits overlie the coal reserves as well as in Guangdong High quality light oil has been found in the Pearl River estuary of the South China Sea the Qaidam Basin in Qinghai and the Tarim Basin in Xinjiang The country consumes most of its oil output but does export some crude oil and oil products China has explored and developed oil deposits in the South China Sea and East China Sea the Yellow Sea the Gulf of Tonkin and the Bohai Sea In 2013 the pace of China s economic growth exceeded the domestic oil capacity and floods damaged the nation s oil fields in the middle of the year Consequently China imported oil to compensate for the supply reduction and surpassed the US in September 2013 to become the world s largest importer of oil 280 The total extent of China s natural gas reserves is unknown as relatively little exploration for natural gas has been done 281 Sichuan accounts for almost half of the known natural gas reserves and production 282 Most of the rest of China s natural gas is associated gas produced in the Northeast s major oil fields especially Daqing oilfield Other gas deposits have been found in the Qaidam Basin Hebei Jiangsu Shanghai and Zhejiang and offshore to the southwest of Hainan Island 283 According to an article published in Energy Economics in 2011 by economists Mete Feridun University of Greenwich and Abdul Jalil Wuhan University in China financial development in China has not taken place at the expense of environmental pollution and financial development has led to a decrease in environmental pollution Authors conclude that carbon emissions are mainly determined by income energy consumption and trade openness and their findings confirm the existence of an Environmental Kuznets Curve in the case of China 284 Metals and nonmetals Edit Iron ore reserves are found in most provinces including Hainan Gansu Guizhou southern Sichuan and Guangdong provinces have rich deposits The largest mined reserves are located north of the Yangtze River and supply neighboring iron and steel enterprises With the exception of nickel chromium and cobalt China is well supplied with ferroalloys and manganese Reserves of tungsten are also known to be fairly large Copper resources are moderate and high quality ore is present only in a few deposits Discoveries have been reported from Ningxia Lead and zinc are available and bauxite resources are thought to be plentiful China s antimony reserves are the largest in the world Tin resources are plentiful and there are fairly rich deposits of gold China is the world s fifth largest producer of gold and in the early 21st century became an important producer and exporter of rare metals needed in high technology industries China also produces a fairly wide range of nonmetallic minerals One of the most important of these is salt which is derived from coastal evaporation sites in Jiangsu Hebei Shandong and Liaoning as well as from extensive salt fields in Sichuan Ningxia and the Qaidam Basin There are important deposits of phosphate rock in a number of areas Jiangxi Guangxi Yunnan and Hubei Production has been accelerating every year As of 2013 China is producing 97 000 000 metric tons of phosphate rock a year 285 Pyrites occur in several places Liaoning Hebei Shandong and Shanxi have the most important deposits China also has large resources of fluorite fluorspar gypsum asbestos and has the world s largest reserves and production of cement clinker and limestone Industry and manufacturing Edit Made in China redirects here For other uses see Made in China disambiguation Further information Industry of China and Technological and industrial history of China China Railway HXD1B Manufactured by CRRC Fuxing high speed train produced by CRRC As of 2017 update industry accounts for 40 5 of China s GDP 286 Between the years 2011 and 2013 China used more cement than the United States consumed during the entire 20th century 287 In 2009 around 8 of the total manufacturing output in the world came from China itself and China ranked third worldwide in industrial output that year first was EU and second United States Research by IHS Global Insight states that in 2010 China contributed to 19 8 of world s manufacturing output and became the largest manufacturer in the world that year after the US had held that position for about 110 years 288 289 C919 developed by Chinese aerospace manufacturer Comac In November 2012 the State Council of the People s Republic of China mandated a social risk assessment for all major industrial projects This requirement followed mass public protests in some locations for planned projects or expansions 290 Major industries include mining and ore processing iron and steel aluminium coal machinery armaments textiles and apparel petroleum cement chemical fertilizers food processing automobiles and other transportation equipment including rail cars and locomotives ships and aircraft consumer products including footwear toys and electronics telecommunications and information technology China has become a preferred destination for the relocation of global manufacturing facilities Its strength as an export platform has contributed to incomes and employment in China citation needed Since the founding of the People s Republic industrial development has been given considerable attention as of 2011 46 of China s national output continued to be devoted to investment a percentage far higher than any other nation 291 Among the various industrial branches the machine building and metallurgical industries have received the highest priority These two areas alone now account for about 20 30 percent of the total gross value of industrial output 292 In these as in most other areas of industry however innovation has generally suffered at the hands of a system that has rewarded increases in gross output rather than improvements in variety sophistication and quality China therefore still imports significant quantities of specialized steels Overall industrial output has grown at an average rate of more than ten percent per year having surpassed all other sectors in economic growth and degree of modernization 293 Some heavy industries and products deemed to be of national strategic importance remain state owned but an increasing proportion of lighter and consumer oriented manufacturing firms are privately held or are private state joint ventures citation needed The predominant focus of development in the chemical industry is to expand the output of chemical fertilizers plastics and synthetic fibers The growth of this industry has placed China among the world s leading producers of nitrogenous fertilizers In the consumer goods sector the main emphasis is on textiles and clothing which also form an important part of China s exports Textile manufacturing a rapidly growing proportion of which consists of synthetics account for about ten percent of the gross industrial output and continues to be important but less so than before The industry tends to be scattered throughout the country but there are a number of important textile centers including Shanghai Guangzhou and Harbin 294 295 There is a growing consumer culture in China Steel industry Edit Main articles Steel industry in China List of steel producers and List of countries by steel production Skyscrapers of Guangzhou In 2020 China produced over 1053 million tonnes of steel over half of the world total This was an increase of 5 6 over the previous year as global steel production fell by 0 9 China s share of global crude steel production increased from 53 3 in 2019 to 56 5 in 2020 296 Iron ore production kept pace with steel production in the early 1990s but was soon outpaced by imported iron ore and other metals in the early 2000s Steel production an estimated 140 million tons in 2000 increased to 419 million tons in 2006 and 928 million tons by 2018 Much of the country s steel output comes from a large number of small scale producing centers one of the largest being Anshan in Liaoning citation needed China was the top exporter of steel in the world in 2018 export volumes in 2018 were 66 9 million tons a nine percent decrease over the previous year 297 The decline slowed China s decade old steel export growth As of 2012 steel exports faced widespread anti dumping taxes and had not returned to pre 2008 levels However in 2015 China s steel exports reached a record high of 110 million metric tons 298 Domestic demand remained strong particularly in the developing west where steel production in Xinjiang was expanding 299 For the year 2018 China s steel industry reported profits of CNY 470 billion 70 billion which was 39 higher than the year before 300 Of the 45 largest steel producing companies in the world 21 are Chinese including the world s largest China Baowu Steel Group Automotive industry Edit Main article Automotive industry in China China is the world s largest automobile producer manufacturing more than 27 million vehicles in 2018 For comparison the corresponding numbers for the US and Japan were 11 3 million and 9 7 million respectively By 2006 China had become the world s third largest automotive vehicle manufacturer after US and Japan and the second largest consumer only after the US However four years later in 2010 China was manufacturing more vehicles than the U S and Japan combined Automobile manufacturing has soared during the reform period In 1975 only 139 800 automobiles were produced annually but by 1985 production had reached 443 377 then jumped to nearly 1 1 million by 1992 and increased fairly evenly each year up until 2001 when it reached 2 3 million In 2002 production rose to nearly 3 25 million and then jumped to 4 44 million in 2003 5 07 million in 2004 5 71 million in 2005 7 28 million in 2006 8 88 million in 2007 9 35 million in 2008 and 13 83 million in 2009 China has become the number one automaker in the world as of 2009 Domestic sales have kept pace with production After respectable annual increases in the mid and late 1990s passenger car sales soared in the early 2000s In 2006 a total of 7 22 million automobiles were sold including 5 18 million units of passenger cars and 2 00 million commercial vehicles citation needed In 2010 China became the world s largest automotive vehicle manufacturer as well as the largest consumer ahead of the United States with an estimated 18 million new cars sold 301 However new car sales grew only by an estimated 1 between 2011 and 2012 due to the escalation in the Spratly Islands dispute which involved Japan the world s third largest producer of vehicles 302 China s automotive industry has been so successful that it began exporting car parts in 1999 China began to plan major moves into the automobile and components export business starting in 2005 A new Honda factory in Guangzhou was built in 2004 solely for the export market and was expected to ship 30 000 passenger vehicles to Europe in 2005 By 2004 twelve major foreign automotive manufacturers had joint venture plants in China They produced a wide range of automobiles minivans sport utility vehicles buses and trucks In 2003 China exported US 4 7 billion worth of vehicles and components The vehicle export was 78 000 units in 2004 173 000 units in 2005 and 340 000 units in 2006 The vehicle and component export is targeted to reach US 70 billion by 2010 citation needed The market for domestically produced cars under a local name is likely to continue to grow both inside China and outside Companies such as Geely Qiantu and Chery are constantly evaluating new international locations both in developing and developed countries 303 Electric vehicle industry Edit Main articles Electric vehicle industry in China and New energy vehicles in China BYD with Dual Mode hybrid engine The electric vehicle industry in China is the largest in the world accounting for around 57 4 of global production of EVs and around 500 000 exports in 2021 304 In 2021 CAAM reported China had sold 3 34 million passenger electric vehicles consisting 2 73 million BEVs battery only EVs and 0 6 million PHEV plug in hybrid electric vehicles 305 which is around 53 share of the global market of 6 23 million new energy passenger vehicles BEVs PHEVs and HEVs 306 China also dominates the plug in electric bus and light commercial vehicle market reaching over 500 000 buses 98 of global stock and 247 500 electric commercial vehicles 65 of global stock in 2019 307 and recording new sales of 186 000 commercial EVs in 2021 308 Plug in electric vehicle BEV and PHEV sales was 15 of the overall automotive sales in China in 2021 309 NEV adoption rapidly increased to a record 28 in March 2022 and according to BYD chairman Wang Chuanfu could reach 35 by end of 2022 exceeding the government goal of 20 by 2025 310 The plug in market in China was dominated by Chinese companies with BYD Auto and SAIC Motor occupying the top two spots and 5 out of the top 7 spots 311 The battery industry is closely related to the EV industry as batteries constitute around 1 3 of the cost of EVs 312 and around 80 of lithium ion batteries in the world are used in EVs 313 The industry also has significant Chinese presence with major players including world s largest CATL BYD CALB Gotion SVOLT and WeLion 314 Semiconductor industry Edit Main article Semiconductor industry in China The Chinese semiconductor industry including IC design and manufacturing forms a major part of China s IT industry China s semiconductor industry consists of a wide variety of companies from integrated device manufacturers to pure play foundries to fabless semiconductor companies Integrated device manufacturers IDMs design and manufacture integrated circuits Pure play foundries only manufacture devices for other companies without designing them while fabless semiconductor companies only design devices Examples of Chinese IDMs are YMTC and CXMT examples of Chinese pure play foundries are SMIC Hua Hong Semiconductor and Wingtech and examples of Chinese fabless companies are Zhaoxin HiSilicon and UNISOC China is the currently the world s largest semiconductor market in terms of consumption In 2020 China represented 53 7 of worldwide chip sales or 239 45 billion out of 446 1 billion However a large percentage are imported from multinational suppliers In 2020 imports took up 83 38 199 7 billion of total chip sales In response the country has launched a number of initiatives to close the gap including investing 150 billion into its domestic IC industry with a Made in China 2025 goal of 70 domestic production 315 316 China leads the world in terms of number of new fabs under construction with 8 out of 19 worldwide in 2021 and 17 fabs in total are expected to start construction from 2021 to 2023 Total installed capacity of Chinese owned chipmakers will also increase from 2 96 million wafers per month wpm in 2020 to 3 572 million wpm in 2021 315 Other industries Edit Further information Telecommunications industry in China Electronics industry in China Pharmaceutical industry in China and Shipping industry of China Substantial investments were made in the manufacture of solar panels and wind generators by a number of companies supported by liberal loans by banks and local governments However by 2012 manufacturing capacity had far outstripped domestic and global demand for both products particularly solar panels which were subjected to anti dumping penalties by both the United States and Europe The global oversupply has resulted in bankruptcies and production cutbacks both inside and outside China China has budgeted 50 billion to subsidize production of solar power over the two decades following 2015 but even at the sharply reduced price resulting from oversupply as of 2012 cost of solar power in China remained three times that of power produced by conventional coal fired power plants 317 Huawei MateBook series at a World Mobile Congress China is the world s biggest sex toy producer and accounts for 70 of the worldwide sex toys production 318 In the country 1 000 manufacturers are active in this industry which generates about two billion dollars a year 318 As of 2011 China was the world s largest market for personal computers 319 Since 2019 Samsung Electronics Hyundai Motors Kia Motors and LG Electronics are moving some or all production out of China in order to reduce overdependence on the Chinese market and avoid risks related with increased local competition China s economic slowdown and the US China trade war 320 321 Services Edit The output of China s services in 2015 ranks second worldwide after the United States High power and telecom density has ensured that the country has remained on a high growth trajectory over the long term In 2015 the services sector produced 52 9 of China s annual GDP second only to manufacturing However its proportion of GDP is still low compared to the ratio in more developed countries and the agricultural sector still employs a larger workforce citation needed Prior to the onset of economic reforms in 1978 China s services sector was characterized by state operated shops rationing and regulated prices with reform came private markets individual entrepreneurs and a commercial sector The wholesale and retail trade has expanded quickly with numerous shopping malls retail shops restaurant chains and hotels constructed in urban areas Public administration remains a main component of the service sector while tourism has become a significant factor in employment and a source of foreign exchange 322 Telecommunications Edit Main article Telecommunications in China China possesses a diversified communications system that links all parts of the country by Internet telephone telegraph radio and television citation needed The affordability of mobile phones and internet data in China has resulted in the number of mobile internet users in China surpassing the number of computer internet users 323 178 China s number of Internet users or netizens topped 137 million by the end of 2006 324 an increase of 23 4 from a year before and 162 million by June 2007 making China the second largest Internet user after the United States according to China s Ministry of Information Industry MII China s mobile phone penetration rate was 34 in 2007 In 2006 mobile phone users sent 429 billion text messages on average 967 text messages per user For 2006 the number of fixed lines grew by 79 mainly in the rural areas 325 Tourism Edit Main articles Tourism in China and List of World Heritage Sites in China China hosts the world s largest number of World Heritage Sites 55 China s tourism industry is one of the fastest growing industries in the national economy and is also one of the industries with a very distinct global competitive edge According to the World Travel and Tourism Council travel and tourism directly contributed CNY 1 362 billion US 216 billion to the Chinese economy about 2 6 of GDP 326 In 2011 total international tourist arrivals was 58 million and international tourism receipts were US 48 billion 327 Domestic tourism market makes up more than 90 of the country s tourism traffic and contributes more than 70 of total tourism revenue In 2002 domestic tourists reached 878 million and tourism revenue was 46 9 billion A large middle class with strong consumption power is emerging in China especially in major cities China s outbound tourists reached 20 22 million in 2003 overtaking Japan for the first time citation needed It is forecast by the World Tourism Organization that China s tourism industry will take up to 8 6 of world market share to become the world s top tourism industry by 2020 citation needed Chinese business travel spending is also forecast to be the highest in the world by 2014 overtaking the United States According to a Global Business Travel Association study total business travel spending is expected to reach US 195 billion in 2012 328 Luxury goods Edit Main article Luxury goods of ChinaParts of this article those related to Projections and trends regarding luxury goods need to be updated The reason given is Statistics and projects on luxury goods are significantly dated largely based on 2008 article Please help update this article to reflect recent events or newly available information August 2022 Luxury spending in China has skyrocketed an indicator of the country s newfound wealth For example the Chinese bottled water industry is forecast to more than double in size in 2008 becoming a 10 5 billion industry Counterfeiting is now estimated to account for 8 of China s gross domestic product Many municipalities and towns in China depend upon counterfeiting to sustain their local economies There are millions of people perhaps tens of millions of people involved in counterfeiting in China citation needed There are hundreds of thousands of people involved in anti counterfeiting Meanwhile as those who once had no recourse but low quality tap water take advantage of its availability in supermarkets those who had little or no running water are now capitalizing on its availability Tap water production and supply is expected to grow by 29 3 in 2008 to 11 9 billion China s automotive industry is expected to expand by 29 5 to nearly 200 billion Also consumption of chocolate and other confectionery is to increase by 24 3 as the industry expands to 4 6 billion Additionally China s fast food industry has been growing at a 20 8 annual rate The LVMH Group who own brands including Louis Vuitton apparel Moet amp Chandon wines and champagne and Hennessy cognacs reported earnings growth of over 25 in 2007 in China with the country accounting for around 16 of LVMH s global business 329 After an October 2012 ban on government agencies purchasing luxury goods often used as gifts sales of luxury goods in China remained strong but slowed even falling slightly for some luxury retailers in the 4th quarter of 2012 330 with sales of shark fins and edible swallow nests once staples of lavish government banquets down sharply 331 Retail sales in China account for only 7 of global retail sales however Chinese buyers account for 25 of global retail sales of luxury consumer goods Many shops in international travel destinations have specialized staff devoted to Chinese customers 330 Cybercrime Edit An academic study released in August 2012 by the University of California UC Institute on Global Conflict and Cooperation claimed that China s cyber black market involved over 90 000 participants cost the local economy 5 36 billion yuan 536m negatively impacted upon 110 million internet users 22 and affected 1 1 million websites 20 in 2011 332 In July 2012 China s State Council released a set of information security guidelines as a measure to combat cyber crime that included increased auditing security reporting and monitoring and a commitment to reduce the number of internet connection points 333 Labor and welfare EditMain articles Labor relations in China and Social welfare in China A window washer on a skyscraper in Shanghai A worker makes ceramics in Yunnan A Chinese coal miner at the Jin Hua Gong Mine One of the hallmarks of China s socialist economy was its promise of employment to all able and willing to work and job security with virtually lifelong tenure This socialist policy is known as the iron rice bowl citation needed In 1979 1980 the state reformed factories by giving wage increases to workers which was immediately offset by sharply rising inflation rates of 6 7 The reforms also dismantled the iron rice bowl which meant it witnessed a rise in unemployment in the economy In 1979 80 there were twenty million unemployed people 334 This chart shows the Chinese employment by sectors during time 335 China s estimated employed labor force in 2005 totaled 791 million persons about 60 of the total population During 2003 49 of the labor force worked in agriculture forestry and fishing 22 in mining manufacturing energy and construction industries and 29 in the services sector and other categories In 2004 some 25 million persons were employed by 743 000 private enterprises Urban wages rose rapidly from 2004 to 2007 at a rate of 13 to 19 per year with average wages near 200 month in 2007 336 By 2016 the average monthly wage for workers engaged in manufacturing goods for export was 424 This wage combined with other costs of doing business in China had more or less equalized any Chinese cost advantage with respect to developed economies 337 The All China Federation of Trade Unions is the country s only legally permissible trade union Attempts to form trade unions independent of the ACFTU have been rare and short lived One notable example is the Beijing Workers Autonomous Federation formed during the 1989 Tiananmen Square protests Martial Law Command Headquarters issued a public notice declaring the BWAF an illegal organization and ordering it to disband on the grounds that Federation leaders were among the main instigators and organizers in the capital of the counterrevolutionary rebellion 338 339 In 2010 the issues of manufacturing wages caused a wildcat strike at a Honda parts plant This resulted in wage increases both at the struck plant and other industrial plants 340 341 342 343 344 The 2010 census found that China was now half urban and rapidly aging due to the one child policy This is expected to lead to increased demand for labor to take care of an elderly population and a reduced supply of migrant labor from the countryside 345 Due to worsening pollution the corruption and political uncertainties of the one party state and the limited economic freedom in an economy dominated by large state owned enterprises many skilled professionals are either leaving the country or preparing safety nets for themselves abroad 346 347 348 In the decade up to 2014 ten million Chinese emigrated to other countries taking assets and their technical skills 349 Perceived corruption continued to grow worse in China as it dropped from 75th to 80th place in Transparency International s index of state corruption citation needed A law approved February 2013 will mandate a nationwide minimum wage at 40 average urban salaries to be phased in fully by 2015 350 External trade EditMain article History of trade of the People s Republic of ChinaFurther information List of the largest trading partners of China List of exports of China List of Chinese administrative divisions by exports and China United States trade war This section needs additional citations for verification 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