Economy of China

The Popular republic of China officially adopted a socialist market economy which tries to make compatible the principles inherited the collectivization of the economy installation since 1949 and those of the Capitalisme. This “wide variation” Idéologique is the result of the policy implemented by Deng Xiaoping after its return to the capacity in 1979. China adhered to the World Trade organization (OMC) the December 11th 2001. It is member of the Economic cooperation Pacific Asia (APEC).

In July 2007, China is the fourth world economic power behind the the United States, the Japan and the Germany, with a nominal GDP of: 2668 billion dollars in 2006.

History

Origins of the modern Chinese economy

One speaks rightly about “alarm clock” and not about “awakening” of China. Indeed, China a long time had one of the most important economies of the world. Bound to the the Middle East and the Occident by the Silk route since the end of the Antiquity, China accounted for 30% of world GDP at the beginning of the 19th century.

The economy of the contemporary China was based on the debris of the Dynastie Qing, ruined by the trade of the Opium orchestrated by the western powers.

At the 19th century, China undergoes a strong social agitation, an economic stagnation, a growth explosive Démographique, and interferences increasingly marked on behalf of the western powers. The British will to open the Trade and in particular to continue its Exportation S of Opium, that imperial edicts made illegal, leads to the First war of opium, in 1840, and with the Chinese defeat. The Great Britain obtained the transfer of HongKong to the Traité of Nankin in 1842, as well as the opening of other ports to the European trade. Thereafter, Great Britain and other western powers, including the the United States and later the Japan, obtained “concessions”, i.e. small coastal territories under their control, as well as an influence in vast close areas, and commercial privileges.

The advent of the Popular republic of China in 1949 marked the one period beginning of economic Autarcie followed measurements Macro-économique S to the variable effectiveness. If the mode managed to suppress the episodical famines from which the Chinese Population suffered and to make it possible all the inhabitants to have access to vital the minima needs (food, Drinking water, Chinese Public health medical care) - what was not the case before the Révolution. These colossal efforts made it possible the country not to be involved in debt. But of the monumental errors which had with a complete lack of direction of realities were also made, in particular the Grand Step ahead which caused enormous a Famine and in fine the death of more than 30 million people between 1960 and 1962. The Cultural revolution completely disorganized the economy during ten years and strongly abused the historical heritage and Culturel of the country.

The rise of “the socialist market economy”

After the death of Mao Zedong in 1976 and the arrival of Deng Xiaoping with the capacity, a new formula - the socialist market economy - made it possible the China to open gradually its economy while preserving its Political regime. Since the Years 1980, China thus became a major actor in the manufactured textile industries and objects basic quality, preserving very low prices thanks to a Labor many and cheap, being worth to him the nickname of “workshop of the world”.

Delegates taking part in XVIe Congrès of the Chinese Communist party in November 2002 with Beijing stressed that the success of the reform of the government enterprise - company at the beginning of the Années 1990 by Jiang Zemin - was paramount to promote the fast development of the nation's economy and to build a company with the relatively easy standard of living.

But, in the new economic context, the state enterprises have evil to find their place and encounter difficulties more and more. Their losses reached the figure record of 102,6 billion Yuan S (12,75 billion dollars) in 2005, that is to say an increase of 56,7% in annual base, according to the figures of the Office of State of Statistics (BES). Over the first two months of 2006, the losses of the state enterprises or controlled by the State reach already 26,2 billion yuans, that is to say 3,25 billion dollars. The increase in the production costs, an attachment unit of the ineffective price, the surplus production capacity and important gaps of order Technologique are the leading causes of this situation, according to Jiang Yuan, statistician with the BES.

Chinese economic opening rests on special economic Zones (ZES), zones of territories offering of the very advantageous conditions for the multinational firms, but obliging them to leave their Technologie S in the event of Délocalisation of the factories. These zones occupy now almost all the Chinese littoral.

It is not that more recently than some Entreprises Chinese knew to impose their mark in growth industries, and the repurchase of foreign companies.

The accession of China to OMC confirmed its place growing in the worldwide economy, being profiled like a new economic center following the example the United States, European Union and Japan. The Chinese Exportation S are very competitive and constitute most of the American Trade deficit. China has enormous monetary reserves today. They guarantee 18 months of importation, by covering 10 times the current liabilities of the country and by guaranteeing 20% of the money supply. Doped by the trade surplus, the Bank of the People garners 15 billion dollars of currencies additional each month.

Currently, one notes a shift between the littorals and the Center of China. The first much more being developed and being integrated that the second (very poor).

The Chinese authorities adopted a strategy of progressive opening of the economy, which did not open that very recently sector-keys as the Banque S or the Assurance S. This parsimonious opening, synonymous with arrival of foreign assets, undoubtedly enabled him to resist the Asian Crise of 1997.

Posting growth rates passing very close to the 10% regularly, the Chinese economy is sometimes described as being in “overheating”.

Contemporary Chinese economy

The place of China in the worldwide economy

In 2006, China is the fourth worldwide economy with a GDP of 2.668 billion dollars (the World Bank, Total GDP 2006).

source: the World Bank

It is located behind the United States, Japan and Germany but in front of the the United Kingdom and the France. In 2006, it accounts for only 5,53% of world GDP what is 5,4 times less than the European Union. The European Union is its first supplier in front of the the United States and the Japan.

the Popular republic of China has been interested for a few years in the economic potential of the African continent : in 2005, one counted officially 820 Chinese companies installed in Africa. The Chinese investments strongly increased at the point to exceed those devoted to the Southeast Asia. The commercial exchanges are assembled to 56 billion euros and China became the third business partner of Africa in 2005. Especially, the Africa constitutes a source of supply in Minerai S (Cuivre of Zambia; Chromium of the Zimbabwe) and especially in Oil for Beijing: 1/4 of its needs are imported black continent.

Apart from the African continent, the Chinese investors are present in the exploitation of the raw materials of the North Korea, in addition allied policy of China: the Chinese Investissements in North Korea thus reached 14,37 million euros in 2005.

Chinese energy dependence

Into 2003, the energy consumption of China was divided between the coal (64%), the Pétrole (27%), the Hydroélectricité (5,5%), the Natural gas (3%) and the nuclear energy (0,5%). The Chinese energy needs currently exceed the energy resources available: frequent cuts take place in medium-sized cities, and certain factories must cease their activity several hours during the peak period, in particular in the industrial parks of the littoral.

Coal: in 2003, the Popular republic of China produced 79% of its electricity starting from coal (1,4 billion tons in 2002)
Pétrole: 230 million tons, including 70% exploited in China, the remainder coming especially from Russia and the Middle East, including 7% of Sudan in crisis. The oil consumption increases at fast intervals (12% per annum), related in particular to the growth of the car fleet (30% of cars in more since 2003; 56 million motor vehicles is envisaged by 2010). In second rank after the United States, China imports in 2005 5,4% of world crude oil. According to the magazine the Point , the country consumes 8% of the worldwide production of oil in 2005, and this figure does nothing but increase. Lastly, China must import 40% of its requirements out of oil, placing itself at the second world rank for the consumption of the black gold. Between 1996 and 2003, the oil importations passed from 20 to 90 million tons.
Natural gas: projects of provisioning coming from Australia.

This provisioning, in a context of rise in the prices of the Oil, makes economically China potentially vulnerable, and justifies its benevolence towards " States-voyous" as the Sudan which maintains knowingly the Civil war in Darfur. In addition, the conditions of operating of the coal are disastrous and regularly cause deaths in the mines.

In order to reduce its dependence, the Chinese government encourages the programs of synthetic Essence, elaborate starting from coal.

The monetary policy

The Yuan was revalued of 2% on July 21st 2005, following the insistent pressures of the the United States, which see in the maintenance of a weak yuan an instrument of catalysation of the Exportation S with low costs. The financial reform in China east still with the state of outline, and will be done obviously only gradually, without yielding to the foreign pressures. Indeed, an appreciation of the Yuan would have dubious effects on the Chinese economy, but the maintenance of the fixed Foreign exchange rate became a true headache for Beijing.

A fragile miracle, social inequalities

However, of major problems counterbalance the " economic miracle chinois" ; on the one hand, growth of the inequalities between townsmen and populations country or Working migrants, at the origin of riots; in addition, the problem of the agricultural production (China is clear importer of Blé) and of the reclassification of the peasants, and the energy dependence of the country.

In 2003,30 million people lived with less than 77 dollars per annum in China. Only 76 million urban employees is protected by the health insurance, that is to say 5,8% of the population. The Chinese company is increasingly uneven: the richest families, which account for 8,6% of the total population, hold 60% of the financial capital. According to the official statistics, the great agglomerations are three times richer than the rural areas.

The development of the services

Today, the Chinese theoretically have three weeks of Paid vacations per annum. The Tourism and the Consommation strongly increased in the country: in 2003, one estimates that more than 100 million Chinese traversed and visited their country.

The Technologies information and the communication

Strong of its 133,5 million Net surfers (eMarketer 2007 June), China seeks to benefit from the Technologies information and the clean communication to sell its produced S with low costs. It adopted the technical specification on the E-business (EbXML).

See: Standardization administration off Clouded, ebXML These technologies Web make it possible the Chinese companies to propose electronic catalogs on line, which highlight the differences of Prix compared to the Western products.

The role of the State

The taxation is very decentralized in China, and they are the provinces and the small administrations which manage a big part of the receipts of the taxes, and deal of education and health. It there only very little interprovincial financial solidarity.

Data

Shares in the worldwide economy by sectors

Agro-alimentary

Groundnut: 15,5 MT, is 43% of the worldwide production.
Cereal S:

Rice: 167,6 MT (28,7%)
Corn: 86,1 MT (15,4%)
Corn: 114,2 MT (18%, n° 2 behind the United States)

Colza: 11,5 MT (31,2%)
Cotton 4870
Fruits
Potato: 66,8 MT (21,4%)
Meat

Heavy industries

Electricity

The consumption of electricity, related on the industrial development and the strong progression of domestic consumption, strongly increased these last years (+ 15% in 2003).

China envisages to increase the electric output installed of 400.000 MW to 900.000 MW from here 2020 (in same time GDP should be quadrupled).

The share of the nuclear power would remain weak but pass from 1,7% in 2003 to 4% in 2020. That supposes the construction of 36 nuclear sections of 1000 MW during this time. According to the NewYork Times , “China consumes already more coal than the United States, the European Union and Japan joined together” and it “will supplant the United States as a first CO2 transmitter from here at 2009”. Coal ensures 69% of the electricity produced in China.

Agricultural productions

Breeding

Between 1991 and 2002, the consumption of Viande of the Chinese was multiplied by four. The industrial breedings of Pig S and Volaille S concentrate on the littoral and accentuate the Pollution of it

Principal Chinese companies

The installation of the “socialism of market” established many factories in China, which made it call the workshop of the world , because of the Social dumping of its factories.

Other Chinese companies

Zamal Corporation and weedyGreen Fruits
Clouded Oilfield Services
COSL
Hua Xia Bank
Jialing
Naxos, a label of classical music established in Hong-Kong
Norinco
PICC
Ping An off Clouded
Sina.com
Sinozyme
Sohu
Soutec
Wenhui Book Review

Chinese technological innovations

Standards

protocol of safety (Wapi) on Wi-Fi.
EVD for DVD.
Dragon microprocessor to compete with those of Intel, AMD and IBM.

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