China is the largest manufacturing economy, the largest exporter of goods, the fastest growing consumer market and also the largest importer of goods in the world. Therefore, China is the largest trading nation in the world and plays a vital role in the international trade. China became a member of the World Trade Organization in 2001. China also has free trade agreements with several nations, including China–Australia Free Trade Agreement, China–South Korea Free Trade Agreement, ASEAN–China Free Trade Area, Switzerland and Pakistan.
The internationalization of the Chinese economy continues to affect the standardized economic forecast by the Purchasing Managers Index in 2005. At the start of the 2010s, China became the sole Asian nation to have a GDP and PPP above the $10-trillion mark (along with the United States and the European Union). As China's economy grows, so does China's Renminbi, which undergoes the process needed for its internationalization. The economy of China has recently initiated Asian Infrastructure Investment Bank in 2015.
Regional Economies
China's unequal transportation system, natural and human resources, and industrial infrastructure has produced significant variations in the regional economies of China. The 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 along the southeast coast (centered on the Pearl River Delta), along the east coast (centered on the Lower Yangtze River) and near the Bohai Gulf (in the Beijing–Tianjin–Liaoning region). The rapid development of these areas has 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.
Provinces
|
GDP (in millions)
|
Mid-year
|
|||||
population
|
|||||||
Rank
|
CN ¥
|
Nominal
|
PPP
|
real
|
Share
|
(given*1000)
|
|
(US $)
|
(US $)
|
growth (%)
|
(%)
|
||||
China
|
63,646,270
|
10,361,117
|
17,585,749
|
7.4
|
100
|
1,364,270
|
|
Guangdong
|
1
|
6,779,224
|
1,103,605
|
1,873,128
|
7.8
|
10.65
|
106,840
|
Jiangsu
|
2
|
6,508,832
|
1,059,587
|
1,798,417
|
8.7
|
10.23
|
79,498
|
Shandong
|
3
|
5,942,659
|
967,419
|
1,641,981
|
8.7
|
9.34
|
97,614
|
Zhejiang
|
4
|
4,015,350
|
653,668
|
1,109,458
|
7.6
|
6.31
|
55,030
|
Henan
|
5
|
3,493,938
|
568,786
|
965,390
|
8.9
|
5.49
|
100,377
|
Hebei
|
6
|
2,942,115
|
478,953
|
812,919
|
6.5
|
4.62
|
73,582
|
Liaoning
|
7
|
2,862,658
|
466,018
|
790,964
|
5.8
|
4.5
|
43,907
|
Sichuan
|
8
|
2,853,666
|
464,555
|
788,480
|
8.5
|
4.48
|
81,236
|
Hubei
|
9
|
2,736,704
|
445,514
|
756,163
|
9.7
|
4.3
|
58,075
|
Hunan
|
10
|
2,704,846
|
440,328
|
747,360
|
9.5
|
4.25
|
67,139
|
List of Chinese provinces by 2014
Hong Kong and 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".
Development
China has recently become one of the world's major economic powers, following the implementation of economic reform from 1979. China has placed the "five-year-plan" strategy in order to achieve continuous economic development. Between 1978 and 2005, China's per capita GDP had grown from $153 to $1284, while its current account surplus had increased over twelve-fold between 1982 and 2004, from $5.7 billion to $71 billion. During this time, China had also become 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.
According to the 11th five-year plan, China needed to sustain an annual growth rate of 8% for the foreseeable future. In the 1980s, it had transformed its vast and inefficient agricultural sector, freeing its peasants from the confines of central planning and winning them to the cause of reform. In the 1990s, it had likewise started to restructure its stagnant industrial sector, wooing foreign investors for the first time. These policies had catalyzed the country's phenomenal growth. As of 2004, China's state-owned enterprises were still only partially reorganized, and its banks were dealing with the burden of over $205 billion (1.7 trillion RMB) in non-performing loans, monies that had little chance of ever being repaid. The country had a floating exchange rate, and strict controls on both the current and capital accounts.
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. In 2024 China will become the world’s largest economy, according to the global information provider IHS Inc. NYSE:IHS.
Financial and Banking System
Most of China's financial institutions and 98% of banking assets are state owned and governed. 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 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 to 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.
Other crucial financial institutions are follows:
- 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
- The Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public.
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). It is estimated in 2011, that 14 trillion renminbi in loans were outstanding to local governments. Increasing amounts of funds are made available through the banks for economic and commercial purposes. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and commercial banks. Hong Kong has been a major conduit of this investment. On 23 February 2012, the PBC evinced its inclination to liberalize its capital markets when it circulated a telling ten-year timetable. 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. And with two stock exchanges (Shanghai Stock Exchange and Shenzhen Stock Exchange), mainland China's stock market had a market value of $4.48 trillion as of November 2014, which makes it the second largest stock market in the world.
International Trade
International trade makes up a sizeable portion of China's overall economy. Being a Second World country at the time, a meaningful segment of China's trade with the Third World was financed through grants, credits, and other forms of assistance. The principal efforts were made in Asia, especially to Indonesia, Burma, Pakistan, and Ceylon, but large loans were also granted in Africa (Ghana, Algeria, Tanzania) and in the Middle East (Egypt).
Since economic reforms began in the late 1970s, China sought to decentralize its foreign trade system to integrate itself into the international trading system. On November 1991, China joined the Asia-Pacific Economic Cooperation (APEC) group, which promotes free trade and cooperation in economic, trade, investment, and technology spheres. China served as APEC chair in 2001, and Shanghai hosted the annual APEC leaders meeting in October of that year.
After reaching a bilateral WTO agreement with the EU and other trading partners in summer 2000, China worked on a multilateral negotiation on its accession to the WTO in September 2001, and completed its entry into the WTO on 11 December 2001 (after 16 years of negotiations). However, U.S. exporters continue to have concerns about fair market access due to China's restrictive trade policies and U.S. export restrictions.
The vast majority of China's imports consists of industrial supplies and capital goods, notably machinery and high-technology equipment, primarily Japan and the United States. Regionally, almost half of China's imports come from East and Southeast Asia, and about one-fourth of China's exports go to the same destinations. About 80 percent of China's exports consist of manufactured goods, most of which are textiles and electronic equipment, with agricultural products and chemicals constituting the remainder. Out of the five busiest ports in the world, three are in China.
Trade volume between China and Russia reached $29.1 billion in 2005, an increase of 37.1% compared with 2004. Most of China's exports to Russia remain apparel and footwear. Russia is China's eighth largest trade partner and China is now Russia's fourth largest trade partner. Chinese imports from Russia are mainly those of energy sources, such as crude oil, which is mostly transported by rail, and electricity exports from neighboring Siberian and Far Eastern regions. In the near future, exports of both of these commodities are set to increase, as Russia is building the Eastern Siberia-Pacific Ocean oil pipeline with a branch going to the Chinese border, and Russian power grid monopoly UES is building some of its hydropower stations with a view of future exports to China.
Export growth has continued to be a major component supporting China's rapid economic growth. To increase exports, China pursued policies such as fostering the rapid development of foreign-invested factories, which assembled imported components into consumer goods for export and liberalizing trading rights. In its 11th Five-Year Program, adopted in 2005, China placed greater emphasis on developing a consumer demand-driven economy to sustain economic growth and address imbalances.
Source: https://en.wikipedia.org/wiki/Economy_of_China
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