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China vs. Kazakhstan

Economy

ChinaKazakhstan
Economy - overview

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. 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. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2017 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.

In July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi (RMB) 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 resume a gradual appreciation. From 2013 until early 2015, the renminbi held steady against the dollar, but it depreciated 13% from mid-2015 until end-2016 amid strong capital outflows; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. 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.

Kazakhstan's vast hydrocarbon and mineral reserves form the backbone of its economy. Geographically the largest of the former Soviet republics, excluding Russia, Kazakhstan, g possesses substantial fossil fuel reserves and other minerals and metals, such as uranium, copper, and zinc. It also has a large agricultural sector featuring livestock and grain. The government realizes that its economy suffers from an overreliance on oil and extractive industries and has made initial attempts to diversify its economy by targeting sectors like transport, pharmaceuticals, telecommunications, petrochemicals and food processing for greater development and investment. It also adopted a Subsoil Code in December 2017 with the aim of increasing exploration and investment in the hydrocarbon, and particularly mining, sectors.

Kazakhstan's oil production and potential is expanding rapidly. A $36.8 billion expansion of Kazakhstan’s premiere Tengiz oil field by Chevron-led Tengizchevroil should be complete in 2022. Meanwhile, the super-giant Kashagan field finally launched production in October 2016 after years of delay and an estimated $55 billion in development costs. Kazakhstan’s total oil production in 2017 climbed 10.5%.

Kazakhstan is landlocked and depends on Russia to export its oil to Europe. It also exports oil directly to China. In 2010, Kazakhstan joined Russia and Belarus to establish a Customs Union in an effort to boost foreign investment and improve trade. The Customs Union evolved into a Single Economic Space in 2012 and the Eurasian Economic Union (EAEU) in January 2015. Supported by rising commodity prices, Kazakhstan’s exports to EAEU countries increased 30.2% in 2017. Imports from EAEU countries grew by 24.1%.

The economic downturn of its EAEU partner, Russia, and the decline in global commodity prices from 2014 to 2016 contributed to an economic slowdown in Kazakhstan. In 2014, Kazakhstan devalued its currency, the tenge, and announced a stimulus package to cope with its economic challenges. In the face of further decline in the ruble, oil prices, and the regional economy, Kazakhstan announced in 2015 it would replace its currency band with a floating exchange rate, leading to a sharp fall in the value of the tenge. Since reaching a low of 391 to the dollar in January 2016, the tenge has modestly appreciated, helped by somewhat higher oil prices. While growth slowed to about 1% in both 2015 and 2016, a moderate recovery in oil prices, relatively stable inflation and foreign exchange rates, and the start of production at Kashagan helped push 2017 GDP growth to 4%.

Despite some positive institutional and legislative changes in the last several years, investors remain concerned about corruption, bureaucracy, and arbitrary law enforcement, especially at the regional and municipal levels. An additional concern is the condition of the country’s banking sector, which suffers from poor asset quality and a lack of transparency. Investors also question the potentially negative effects on the economy of a contested presidential succession as Kazakhstan’s first president, Nursultan NAZARBAYEV, turned 77 in 2017.

GDP (purchasing power parity)
$23.21 trillion (2017 est.)
$21.72 trillion (2016 est.)
$20.35 trillion (2015 est.)

note: data are in 2017 dollars

$478.6 billion (2017 est.)
$460.3 billion (2016 est.)
$455.3 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
6.9% (2017 est.)
6.7% (2016 est.)
6.9% (2015 est.)
4% (2017 est.)
1.1% (2016 est.)
1.2% (2015 est.)
GDP - per capita (PPP)
$16,700 (2017 est.)
$15,700 (2016 est.)
$14,800 (2015 est.)

note: data are in 2017 dollars

$26,300 (2017 est.)
$25,700 (2016 est.)
$25,800 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 7.9% (2017 est.)
industry: 40.5% (2017 est.)
services: 51.6% (2017 est.)
agriculture: 4.7% (2017 est.)
industry: 34.1% (2017 est.)
services: 61.2% (2017 est.)
Population below poverty line
3.3% (2016 est.)

note: in 2011, China set a new poverty line at RMB 2300 (approximately US $400)

2.6% (2016 est.)
Household income or consumption by percentage share
lowest 10%: 2.1%
highest 10%: 31.4% (2012)

note: data are for urban households only

lowest 10%: 4.2%
highest 10%: 23.3% (2016)
Inflation rate (consumer prices)
1.6% (2017 est.)
2% (2016 est.)
7.4% (2017 est.)
14.6% (2016 est.)
Labor force
806.7 million (2017 est.)

note: by the end of 2012, China's working age population (15-64 years) was 1.004 billion

8.97 million (2017 est.)
Labor force - by occupation
agriculture: 27.7%
industry: 28.8%
services: 43.5% (2016 est.)
agriculture: 18.1%
industry: 20.4%
services: 61.6% (2017 est.)
Unemployment rate
3.9% (2017 est.)
4% (2016 est.)

note: data are for registered urban unemployment, which excludes private enterprises and migrants

5% (2017 est.)
5% (2016 est.)
Distribution of family income - Gini index
46.5 (2016 est.)
46.2 (2015 est.)
26.3 (2013)
31.5 (2003)
Budget
revenues: 2.553 trillion (2017 est.)
expenditures: 3.008 trillion (2017 est.)
revenues: 35.48 billion (2017 est.)
expenditures: 38.3 billion (2017 est.)
Industries
world 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
oil, coal, iron ore, manganese, chromite, lead, zinc, copper, titanium, bauxite, gold, silver, phosphates, sulfur, uranium, iron and steel; tractors and other agricultural machinery, electric motors, construction materials
Industrial production growth rate
6.1% (2017 est.)
5.8% (2017 est.)
Agriculture - products
world leader in gross value of agricultural output; rice, wheat, potatoes, corn, tobacco, peanuts, tea, apples, cotton, pork, mutton, eggs; fish, shrimp
grain (mostly spring wheat and barley), potatoes, vegetables, melons; livestock
Exports
$2.216 trillion (2017 est.)
$1.99 trillion (2016 est.)
$49.29 billion (2017 est.)
$37.26 billion (2016 est.)
Exports - commodities
electrical and other machinery, including computers and telecommunications equipment, apparel, furniture, textiles
oil and oil products, natural gas, ferrous metals, chemicals, machinery, grain, wool, meat, coal
Exports - partners
US 19%, Hong Kong 12.4%, Japan 6%, South Korea 4.5% (2017)
Italy 17.9%, China 11.9%, Netherlands 9.8%, Russia 9.3%, Switzerland 6.4%, France 5.9% (2017)
Imports
$1.74 trillion (2017 est.)
$1.501 trillion (2016 est.)
$31.85 billion (2017 est.)
$28.07 billion (2016 est.)
Imports - commodities
electrical and other machinery, including integrated circuits and other computer components, oil and mineral fuels; optical and medical equipment, metal ores, motor vehicles; soybeans
machinery and equipment, metal products, foodstuffs
Imports - partners
South Korea 9.7%, Japan 9.1%, US 8.5%, Germany 5.3%, Australia 5.1% (2017)
Russia 38.9%, China 16.1%, Germany 5.1%, US 4.3% (2017)
Debt - external
$1.598 trillion (31 December 2017 est.)
$1.429 trillion (31 December 2016 est.)
$167.5 billion (31 December 2017 est.)
$163.6 billion (31 December 2016 est.)
Exchange rates
Renminbi yuan (RMB) per US dollar -
7.76 (2017 est.)
6.6446 (2016 est.)
6.2275 (2015 est.)
6.1434 (2014 est.)
6.1958 (2013 est.)
tenge (KZT) per US dollar -
326.3 (2017 est.)
342.13 (2016 est.)
342.13 (2015 est.)
221.73 (2014 est.)
179.19 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
47% of GDP (2017 est.)
44.2% of GDP (2016 est.)

note: official data; data cover both central 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

20.8% of GDP (2017 est.)
19.7% of GDP (2016 est.)
Reserves of foreign exchange and gold
$3.236 trillion (31 December 2017 est.)
$3.098 trillion (31 December 2016 est.)
$30.75 billion (31 December 2017 est.)
$29.53 billion (31 December 2016 est.)
Current Account Balance
$164.9 billion (2017 est.)
$202.2 billion (2016 est.)
-$5.353 billion (2017 est.)
-$8.874 billion (2016 est.)
GDP (official exchange rate)
$12.01 trillion (2017 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

$159.4 billion (2017 est.)
Stock of direct foreign investment - at home
$1.523 trillion (31 December 2017 est.)
$1.391 trillion (31 December 2016 est.)
$161.6 billion (31 December 2017 est.)
$143.2 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$1.383 trillion (31 December 2017 est.)
$1.227 trillion (31 December 2016 est.)
$35.04 billion (31 December 2017 est.)
$32.74 billion (31 December 2016 est.)
Market value of publicly traded shares
$7.335 trillion (December 2016 est.)
$8.234 trillion (December 2015 est.)
$8.518 trillion (31 est.)
$741.7 million (31 December 2016 est.)
$4.737 billion (31 December 2015 est.)
$26.23 billion (31 December 2013 est.)
Central bank discount rate
2.25% (5 December 2017 est.)
2.25% (31 December 2016 est.)
11% (10 April 2017)
12% (9 January 2017)
Commercial bank prime lending rate
4.35% (31 December 2017 est.)
4.35% (31 December 2016 est.)
14.17% (31 December 2017 est.)
15.34% (31 December 2016 est.)
Stock of domestic credit
$27.34 trillion (31 December 2017 est.)
$23.02 trillion (31 December 2016 est.)
$54.92 billion (31 December 2017 est.)
$55.1 billion (31 December 2016 est.)
Stock of narrow money
$8.351 trillion (31 December 2017 est.)
$7.001 trillion (31 December 2016 est.)
$14.99 billion (31 December 2017 est.)
$13.77 billion (31 December 2016 est.)
Stock of broad money
$8.351 trillion (31 December 2017 est.)
$7.001 trillion (31 December 2016 est.)
$14.99 billion (31 December 2017 est.)
$13.77 billion (31 December 2016 est.)
Taxes and other revenues
21.3% (of GDP) (2017 est.)
22.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-3.8% (of GDP) (2017 est.)
-1.8% (of GDP) (2017 est.)
GDP - composition, by end use
household consumption: 39.1% (2017 est.)
government consumption: 14.5% (2017 est.)
investment in fixed capital: 42.7% (2017 est.)
investment in inventories: 1.7% (2017 est.)
exports of goods and services: 20.4% (2017 est.)
imports of goods and services: -18.4% (2017 est.)
household consumption: 53.2% (2017 est.)
government consumption: 11.1% (2017 est.)
investment in fixed capital: 22.5% (2017 est.)
investment in inventories: 4.8% (2017 est.)
exports of goods and services: 35.4% (2017 est.)
imports of goods and services: -27.1% (2017 est.)
Gross national saving
45.8% of GDP (2017 est.)
45.9% of GDP (2016 est.)
47.5% of GDP (2015 est.)
23.7% of GDP (2017 est.)
21.4% of GDP (2016 est.)
25.1% of GDP (2015 est.)

Source: CIA Factbook