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China Economy Profile 2018

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Economy - overviewSince the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. 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 continues to pursue an industrial policy, state support of key sectors, and a restrictive investment regime. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2016 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. 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, the renminbi appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing announced it would allow a resumption of gradual liberalization. From 2013 until early2015, the renminbi (RMB) appreciated roughly 2% against the dollar, but the exchange rate fell 13% from mid-2015 until end-2016 amid strong capital outflows in part stemming from the August 2015 official devaluation; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. 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. However, since late 2015 the Chinese Government has strengthened capital controls and oversight of overseas investments to better manage the exchange rate and maintain financial stability.

The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) managing its high corporate debt burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (e) dampening speculative investment in the real estate sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (g) raising productivity growth rates through the more efficient allocation of capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the “one-child policy” - which was relaxed in 2016 to permit all families to have two children - 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 urbanization. The Chinese Government is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030.

The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made more progress on subsidizing innovation than rebalancing the economy. Beijing has committed to giving the market a more decisive role in allocating resources, but the Chinese Government’s policies continue to favor state-owned enterprises and emphasize stability. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. 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. Chinese leaders also have undermined some market-oriented reforms by reaffirming the “dominant” role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015.
GDP (purchasing power parity)$23.12 trillion (2017 est.)
$21.66 trillion (2016 est.)
$20.3 trillion (2015 est.)
note: data are in 2017 dollars
GDP (official exchange rate)$11.94 trillion (2016 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's output vis-a-vis the rest of the world; in China's situation, GDP at purchasing power parity provides the best measure for comparing output across countries
GDP - real growth rate6.8% (2017 est.)
6.7% (2016 est.)
6.9% (2015 est.)
GDP - per capita (PPP)$16,600 (2017 est.)
$15,700 (2016 est.)
$14,800 (2015 est.)
note: data are in 2017 dollars
Gross national saving45.4% of GDP (2017 est.)
45.9% of GDP (2016 est.)
47.5% of GDP (2015 est.)
GDP - composition, by end usehousehold consumption: 39.1%
government consumption: 14.6%
investment in fixed capital: 43.3%
investment in inventories: 1.1%
exports of goods and services: 19.6%
imports of goods and services: -17.7% (2017 est.)
GDP - composition by sectoragriculture: 8.2%
industry: 39.5%
services: 52.2%
(2017 est.)
Population below poverty line3.3%
note: in 2011, China set a new poverty line at RMB 2300 (approximately US $400)
(2016 est.)
Labor force806.7 million
note: by the end of 2012, China's population at working age (15-64 years) was 1.004 billion (2017 est.)
Labor force - by occupationagriculture: 28.3%
industry: 29.3%
services: 42.4%
(2015 est.)
Unemployment rate4% (2017 est.)
4% (2016 est.)
note: data are for registered urban unemployment, which excludes private enterprises and migrants
Household income or consumption by percentage sharelowest 10%: 2.1%
highest 10%: 31.4%
note: data are for urban households only (2012)
Distribution of family income - Gini index46.5 (2016 est.)
46.2 (2015 est.)
Budgetrevenues: $2.672 trillion
expenditures: $3.146 trillion (2017 est.)
Taxes and other revenues22.4% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-4% of GDP (2017 est.)
Public debt18.6% of GDP (2017 est.)
16.1% of GDP (2016 est.)
note: official data; data cover both central government debt and local government debt, including debt officially recognized by China's National Audit Office report in 2011; data exclude policy bank bonds, Ministry of Railway debt, and China Asset Management Company debt
Inflation rate (consumer prices)1.8% (2017 est.)
2% (2016 est.)
Central bank discount rate2.25% (31 December 2016 est.)
2.25% (31 December 2015 est.)
Commercial bank prime lending rate4.4% (31 December 2017 est.)
4.35% (31 December 2016 est.)
Stock of narrow money$8.16 trillion (31 December 2017 est.)
$7.001 trillion (31 December 2016 est.)
Stock of broad money$25.24 trillion (31 December 2017 est.)
$22.3 trillion (31 December 2016 est.)
Stock of domestic credit$26.87 trillion (31 December 2017 est.)
$23.02 trillion (31 December 2016 est.)
Market value of publicly traded shares$7.321 trillion (31 December 2016 est.)
$8.188 trillion (31 December 2015 est.)
$6.005 trillion (31 December 2014 est.)
Agriculture - productsworld leader in gross value of agricultural output; rice, wheat, potatoes, corn, tobacco, peanuts, tea, apples, cotton, pork, mutton, eggs; fish, shrimp
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; 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, satellites
Industrial production growth rate6.2% (2017 est.)
Current Account Balance$162.5 billion (2017 est.)
$196.4 billion (2016 est.)
Exports$2.157 trillion (2017 est.)
$1.99 trillion (2016 est.)
Exports - commoditieselectrical and other machinery, including computers and telecommunications equipment, apparel, furniture, textiles
Exports - partnersUS 18.2%, Hong Kong 13.8%, Japan 6.1%, South Korea 4.5% (2016)
Imports$1.731 trillion (2017 est.)
$1.495 trillion (2016 est.)
Imports - commoditieselectrical and other machinery, including integrated circuits and other computer components, oil and mineral fuels; optical and medical equipment, metal ores, motor vehicles; soybeans
Imports - partnersSouth Korea 10%, Japan 9.2%, US 8.5%, Germany 5.4%, Australia 4.4% (2016)
Reserves of foreign exchange and gold$3.194 trillion (31 December 2017 est.)
$3.098 trillion (31 December 2016 est.)
Debt - external$1.649 trillion (31 December 2017 est.)
$1.467 trillion (31 December 2016 est.)
Stock of direct foreign investment - at home$1.514 trillion (31 December 2017 est.)
$1.391 trillion (31 December 2016 est.)
Stock of direct foreign investment - abroad$1.342 trillion (31 December 2017 est.)
$1.227 trillion (31 December 2016 est.)
Exchange ratesRenminbi yuan (RMB) per US dollar -
6.7588 (2017 est.)
6.6445 (2016 est.)
6.2275 (2015 est.)
6.1434 (2014 est.)
6.1958 (2013 est.)
Fiscal yearcalendar year

Source: CIA World Factbook
This page was last updated on January 20, 2018

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