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China: Economy#

Since the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role; in 2010, China became the world's largest exporter. Reforms began with the phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2015 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. Still, China's per capita income is below the world average.

After keeping its currency tightly linked to the US dollar for years, China in July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi after the currency was accepted as part of the IMF’s special drawing rights basket.

The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2014 more than 274 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development.

Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 13th Five-Year Plan, unveiled in November 2015, emphasizes continued economic reforms and the need to increase innovation and domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014, China agreed to begin limiting carbon dioxide emissions by 2030.

Economic Facts#

GDP (purchasing power parity)$21.27 trillion (2016 est.)
$19.95 trillion (2015 est.)
$18.67 trillion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$11.39 trillion (2015 est.)
note: because China's exchange rate is determined by fiat rather than by market forces, the official exchange rate measure of GDP is not an accurate measure of China's output; GDP at the official exchange rate substantially understates the actual level of China
GDP - real growth rate6.6% (2016 est.)
6.9% (2015 est.)
7.3% (2014 est.)
GDP - per capita (PPP)$15,400 (2016 est.)
$14,500 (2015 est.)
$13,600 (2014 est.)
note: data are in 2016 dollars
Gross national saving46% of GDP (2016 est.)
47.9% of GDP (2015 est.)
49.3% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 38.7%
government consumption: 14.2%
investment in fixed capital: 42.3%
investment in inventories: 1.5%
exports of goods and services: 20.5%
imports of goods and services: -17.2% (2016 est.)
GDP - composition, by sector of originagriculture: 8.6%
industry: 40.7%
services: 50.7% ++ (2016 est.)
Agriculture - productsworld leader in gross value of agricultural output; rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish
Industriesworld leader in gross value of industrial output; mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products (including footwear
Industrial production growth rate6.1% (2016 est.)
Labor force805.9 million
note: by the end of 2012, China's population at working age (15-64 years) was 1.004 billion (2016 est.)
Labor force - by occupationagriculture: 33.6%
industry: 30.3%
services: 36.1% ++ (2012 est.)
Unemployment rate4.2% (2016 est.)
4% (2015 est.)
note: data are for registered urban unemployment, which excludes private enterprises and migrants
Population below poverty line6.1%
note: in 2011, China set a new poverty line at RMB 2300 (approximately US $400) ++ (2013 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%
highest 10%: 30%

note: data are for urban households only (2009)
Distribution of family income - Gini index46.9 (2014 est.)
47.3 (2013 est.)
Budgetrevenues: $2.465 trillion
expenditures: $2.897 trillion (2016 est.)
Taxes and other revenues21.6% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-3.8% of GDP (2016 est.)
Public debt20.1% of GDP (2016 est.)
15.3% of GDP (2015 est.)
note: official data; data cover both central government debt and local government debt; data exclude policy bank bonds, Ministry of Railway debt, China Asset Management Company debt, and non-performing loans
Fiscal yearcalendar year
Inflation rate (consumer prices)2.3% (2016 est.)
1.5% (2015 est.)
Central bank discount rate2.25% (31 December 2014 est.)
2.25% (31 December 2013 est.)
Commercial bank prime lending rate4.4% (31 December 2016 est.)
4.35% (31 December 2015 est.)
Stock of narrow money$6.802 trillion (31 December 2016 est.)
$6.176 trillion (31 December 2015 est.)
Stock of broad money$22.89 trillion (31 December 2016 est.)
$21.45 trillion (31 December 2015 est.)
Stock of domestic credit$23.08 trillion (31 December 2016 est.)
$20.53 trillion (31 December 2015 est.)
Market value of publicly traded shares$8.188 trillion (31 December 2015 est.)
$6.005 trillion (31 December 2014 est.)
$6.499 trillion (31 December 2013 est.)
Current account balance$270.9 billion (2016 est.)
$330.6 billion (2015 est.)
Exports$2.011 trillion (2016 est.)
$2.143 trillion (2015 est.)
Exports - commoditieselectrical and other machinery, including data processing equipment, apparel, furniture, textiles, integrated circuits
Exports - partnersUS 18%, Hong Kong 14.6%, Japan 6%, South Korea 4.5% (2015)
Imports$1.437 trillion (2016 est.)
$1.576 trillion (2015 est.)
Imports - commoditieselectrical and other machinery, oil and mineral fuels; nuclear reactor, boiler, and machinery components; optical and medical equipment, metal ores, motor vehicles; soybeans
Imports - partnersSouth Korea 10.9%, US 9%, Japan 8.9%, Germany 5.5%, Australia 4.1% (2015)
Reserves of foreign exchange and gold$3.092 trillion (31 December 2016 est.)
$3.406 trillion (31 December 2015 est.)
Debt - external$983.5 billion (31 December 2016 est.)
$958.3 billion (31 December 2015 est.)
Stock of direct foreign investment - at home$1.458 trillion (31 December 2016 est.)
$1.221 trillion (31 December 2015 est.)
Stock of direct foreign investment - abroad$1.285 trillion (31 December 2016 est.)
$1.01 trillion (31 December 2015 est.)
Exchange ratesRenminbi yuan (RMB) per US dollar -
6.626 (2016 est.)
6.2275 (2015 est.)
6.2275 (2014 est.)
6.1958 (2013 est.)
6.3123 (2012 est.)