Economy - overview:
In late 1978 the Chinese leadership began moving the economy from a
sluggish, Soviet-style centrally planned economy to a more
market-oriented system. Whereas the system operates within a
political framework of strict Communist control, the economic
influence of non-state organizations and individual citizens has
been steadily increasing. The authorities switched to a system of
household and village responsibility in agriculture in place of the
old collectivization, increased the authority of local officials and
plant managers in industry, permitted a wide variety of small-scale
enterprises in services and light manufacturing, and opened the
economy to increased foreign trade and investment. The result has
been a quadrupling of GDP since 1978. In 2003, with its 1.3 billion
people but a GDP of just $5,000 per capita, China stood as the
second-largest economy in the world after the US (measured on a
purchasing power parity basis). Agriculture and industry have posted
major gains, especially in coastal areas near Hong Kong and opposite
Taiwan, where foreign investment has helped spur output of both
domestic and export goods. The leadership, however, often has
experienced - as a result of its hybrid system - the worst results
of socialism (bureaucracy and lassitude) and of capitalism (windfall
gains and growing income disparities). China thus has periodically
backtracked, retightening central controls at intervals. The
government has struggled to (a) collect revenues due from provinces,
businesses, and individuals; (b) reduce corruption and other
economic crimes; and (c) keep afloat the large state-owned
enterprises, many of which had been shielded from competition by
subsidies and had been losing the ability to pay full wages and
pensions. From 80 to 120 million surplus rural workers are adrift
between the villages and the cities, many subsisting through
part-time low-paying jobs. Popular resistance, changes in central
policy, and loss of authority by rural cadres have weakened China's
population control program, which is essential to maintaining
long-term growth in living standards. Another long-term threat to
growth is the deterioration in the environment, notably air
pollution, soil erosion, and the steady fall of the water table
especially in the north. China continues to lose arable land because
of erosion and economic development. Beijing says it will intensify
efforts to stimulate growth through spending on infrastructure -
such as water control and power grids - and poverty relief and
through rural tax reform aimed at eliminating arbitrary local levies
on farmers. Accession to the World Trade Organization helps
strengthen China's ability to maintain strong growth rates but at
the same time puts additional pressure on the hybrid system of
strong political controls and growing market influences. China has
benefited from a huge expansion in computer internet use. Foreign
investment remains a strong element in China's remarkable economic
growth.
GDP:
purchasing power parity - $5.989 trillion (2002 est.)
GDP - real growth rate:
8% (official data) (2002 est.)
GDP - per capita:
purchasing power parity - $4,700 (2002 est.)
GDP - composition by sector:
agriculture: 15.2%
industry and construction: 51.2%
services: 33.6% (2001)
Population below poverty line:
10% (2001 est.)
Household income or consumption by percentage share:
lowest 10%: 2.4%
highest 10%: 30.4% (1998)
Distribution of family income - Gini index:
40 (2001)
Inflation rate (consumer prices):
-0.8% (2002 est.)
Labor force:
744 million (2001 est.)
Labor force - by occupation:
agriculture 50%, industry 22%, services 28% (2001 est.)
Unemployment rate:
urban unemployment roughly 10%; substantial unemployment and
underemployment in rural areas (2002 est.)
Budget:
revenues: $224.8 billion
expenditures: $267.1 billion, including capital expenditures of $NA
(2000)
Industries:
iron and steel, coal, machine building, armaments, textiles and
apparel, petroleum, cement, chemical fertilizers, footwear, toys,
food processing, automobiles, consumer electronics,
telecommunications
Industrial production growth rate:
12.6% (2002 est.)
Electricity - production:
1.42 trillion kWh (2001)
Electricity - production by source:
fossil fuel: 80.2%
hydro: 18.5%
other: 0.1% (2001)
nuclear: 1.2%
Electricity - consumption:
1.312 trillion kWh (2001)
Electricity - exports:
10.3 billion kWh (2001)
Electricity - imports:
1.55 billion kWh (2001)
Oil - production:
3.3 million bbl/day (2001 est.)
Oil - consumption:
4.975 million bbl/day (2001 est.)
Oil - exports:
NA (2001)
Oil - imports:
NA (2001)
Oil - proved reserves:
26.75 billion bbl (37257)
Natural gas - production:
30.3 billion cu m (2001 est.)
Natural gas - consumption:
30.3 billion cu m (2001 est.)
Natural gas - exports:
0 cu m (2001 est.)
Natural gas - imports:
0 cu m (2001 est.)
Natural gas - proved reserves:
1.29 trillion cu m (37257)
Agriculture - products:
rice, wheat, potatoes, sorghum, peanuts, tea, millet, barley,
cotton, oilseed; pork; fish
Exports:
$325.6 billion f.o.b. (2002 est.)
Exports - commodities:
machinery and equipment; textiles and clothing, footwear, toys and
sporting goods; mineral fuels
Exports - partners:
US 21.5%, Hong Kong 18%, Japan 14.9%, South Korea 4.8% (2002)
Imports:
$295.3 billion f.o.b. (2002 est.)
Imports - commodities:
machinery and equipment, mineral fuels, plastics, iron and steel,
chemicals
Imports - partners:
Japan 18.1%, Taiwan 10.5%, South Korea 9.7%, US 9.2%, Germany 5.6%
(2002)
Debt - external:
$149.4 billion (2002 est.)
Economic aid - recipient:
$NA
Currency:
yuan (CNY)
note:: also referred to as the Renminbi (RMB)
Currency code:
CNY
Exchange rates:
yuan per US dollar - 8.28 (2002), 8.28 (2001), 8.28 (2000), 8.28
(1999), 8.28 (1998)
Fiscal year:
calendar year