The Growth Of China

It is this that has sparked China’s vulnerability to external shocks. In 2011, China’s exports amassed almost $2 trillion, however in Feb 2012, China recorded a $31.5 billion trade deficit as a result of the European sovereign debt crisis in which China’s main trading partners plunged into recession. China’s severe BOGS decrease is an attempt to control growth and a sustained level of 7.5%. Investment policies are also critical for China to achieve economic growth and development. Foreign Direct Investment (FDI) in China is being sought primarily in the redesign of State Owned Enterprises (SOE’s) and in the development of interior provinces. Between 75-80% of World Bank loans to China in 2008 were directed to the central and western regions, the most economically disadvantaged. This promotes increased wealth within China, leading to higher levels of development due to a more positive Human Development Index (HDI), which currently sits at 0.687, up from 0.677 in 2010. Thus, trade and investment are critical factors in ensuring that China’s growth remains sustained at 7.5% whilst still encouraging increases in development.

Since the reform and opening up, the economy of China grows significantly, as an emerging economy, China's economy has made tremendous contributions to the global economy, and Renminbi has become one of the most important currency in the world. According to the survey conducted by China National Bureau of Statistics found that from 1979 to 2012, China has attained an annual average growth rate of 9.8% for its national economy, while the annual average growth of the world economy is only 2.8 % during the same period. In past 30 years, China's GDP surpassed Japan’s, China became the world 's second largest economy, in addition, the huge total volume of trade makes China become the world 's largest trading nation. The contribution of China’s

Since the financial tsunami and the bankruptcy of Lehman’s Brother in September 2008, the world’s economy took a deep plunge and the Chinese economy is no exception. In the wake of the global financial crisis, The Economist (2008) reported that China’s real GDP growth slowed to 9 percent in the third quarter of 2008 and export growth slowed to 21.1%. It was, in fact, well below analyst expectations and recent

Traditional thinking would lead us to believe that China’s breathtaking pace of development would also lead to a phenomenal increase in the demand for

China, the most populous country in the world, has experienced an abnormal growth rate in Gross Domestic Product over the past decades. However, facts and statistics indicate an economic growth slowdown of the Asian giant.

In the National People’s Congress press conference in March 2007, China’s Premier Wen Jiabao argues the biggest problem with China’s economy is that its economic growth is unstable, unbalanced, uncoordinated, and unsustainable. Since export and investment play unsustainable roles in increasing China’s real GDP, this study tries to testify how consumption enhances the sustainability of China’s real GDP in the short run over a long period of time. As Krugman (1994) suggests, increase in the economic growth rate in the steady state can only be attained by the technological progress. However, it is also true that the increase in consumption will increase the real GDP in the short run. Based on the fact that the current ratio of consumption over output in China is much smaller than that of other countries, such as Japan and the United States, a higher ratio will increase China’s real GDP in the short run. Since it takes several years for China to change its economic structure toward consumption, the accumulation of each larger real GDP in the short run will result in a much larger real GDP in the long run. In other words, the increase in consumption will increase China’s economic growth rate indirectly. Therefore, this study uses a macroeconmetric model of Chinese economy to quantify what China’s real GDP would be in a series of increases in the ratio of consumption over output, spread over a long period of time and predicts what China’s real GDP level will be in the future

However, China economy is beginning to slow down reaching a CDP growth of only 6.7%. The strong declines in manufacturing and construction output have been key drivers of China’s growth are now instrumental in the decline. These declines are impacting heavy industries, like steel cement and coal all of which are state-owned enterprises are clustered and of strategic importance t the central government (Eckart, 2016).

In recent years, China has surpassed USA as the world’s largest merchandise trader. Their exports and imports combined was worth up to $4 billion USD. They are importing huge quantities of raw materials, and exporting huge quantities of manufactured goods. Although China’s economy has been growing slower than others, it remains as one of the largest contributors to world GDP growth. One of the main causes to China’s slow GDP growth is their overinvestments. In 2015, investments made up 43.3% of China’s GDP, while household consumptions only made up 38%. The imbalance between these two has widened China’s debt. Keeping up with high levels of investments require a lot of credit, causing China’s debt to grow to over 250% today. A couple of years ago, China started to heavily invest in steel. The Chinese government encouraged the investment because steel was used in automobiles and infrastructure, and the demand was high. China became one of the world’s largest steel producer, and holder of spare capacity. However, in recent years, the demand for steel has declined. China was left struggling with declining demand, overcapacity, and a growing debt because of a tight credit. China has been cutting down excess steel capacity. More than 65

Since the Chinese economic reform beginning in 1978, China has witnessed an economic miracle. China’s annual GDP growth has been around 9.5% - 11.5% per year from 1978 to 2013, and GDP per capita has grown to RMB 41,908 in 2013 from RMB 381 in 1978 (National Bureau of Statistics of China, 2014). The opening up of Chinese economy to foreign investments, loosening regulations, and boost of private sectors etc., have all contributed to this economic miracle. China not only supported the growth of the East Asian Tigers, but also was widely considered as the world engine thereafter.

The exceptional growth of China’s economy after opening itself to the global markets is one of the biggest examples of transformation of a Country. Within the span of 35 years, from being one of the poorest countries it emerged as the 2nd biggest economies.

China economy experienced an incredible growth in the last few decades that made the country the 2nd largest economy in the world. When China started the program of economic reforms in 1978, it ranked 9th in nominal GDP but 35 years later it’s now ranked 2nd in the nominal GDP and been the world’s manufacturing hub. In recent years, China’s modernization propelled the tertiary sector and in 2013, it became the largest category of GDP with a share of 46.1%, while the secondary sector still accounted for a sizeable, 45% of the country’s total output. Meanwhile, the primary sector's weight in GDP has shrunk dramatically since the country opened up to the world.

The Chinese government are encouraging home-grown companies to sell to the domestic market through states subsidisation of domestic firms, and a corresponding cut in export subsidies. The market transformation from a ‘Buy China’ to a “Made in China, Designed by Chinese, for Chinese” is reflected in the record-breaking number of patents filed by Chinese innovators. The end of ‘cheap China’ has partly triggered the rise of ‘consuming China’. China’s government is trying to boost incomes and, ultimately, consumption. The increase in incomes has led to higher living standards

In the recent past, China’s economy has grown at a high rate attracting the attention of the foreign investors. Its gross domestic product has also been high, with the year 2014 recording the highest figure of over ten percent of the world’s economy. The overall structure of its economy has also improved; the unemployment rates have gone down with prices rising at a moderate rate. It is always clear that with a high rate of unemployment within a country, the income levels also tend to be low affecting the living standards of the people, which in turn results to lower productivity levels in the country. Regardless of maintaining a positive balance of payments, the country’s economy also faces some challenges. “China’s economy is facing economic challenge regarding possibilities of deflationary risks” (Mulroney 15). Its economy is also experiencing relatively high costs incurred during the financing of the enterprises. The local governments are overburdened with massive amounts of debts that need to be clear. All these challenges are slowing down the rate of its economic growth.

China’s growth rate is plummeting in recent years and is showing signs of falling further in coming years. Governments effort such as monetary stimulus, stock market bubble and bond market bubble has failed to stabilize economy, making only small and temporary effects. Authorities are trying to boost investment demand through monetary policy but industries already are in state of overcapacity; a result of force saving policies; and therefore real effect is showing as weakness in currency exchange. Commodity market is collapsing in greater rate each year and situation seems like Chinese economy might be moving toward depression.

According to China Highlights, prior to 1978, China maintained a command economy. Then, China launched multiple economic reforms. The central government made incentives for farmers. It also established Special Economic Zones along the coast of china for the purpose of attracting foreign investors. China’s entry into the WTO in 2001 has been one of the best influential factors in shaping the Chinese economy. As a result, the implementation of new commercial laws, as well as a huge influx of foreign direct investment, has extensively liberalized the economy. China’s economy grew at an average rate of about 10% per year during the period 1990-2006, which was the highest growth rate in the world, and promises future growth to come. The average of the country’s GDP will be around 8.5 percent in 2012 and 2013, according to a report from the rating agency Moody’s Investors Service. China would still reach US$40 trillion in GDP by 2054. China is the second largest economy in the world after the U.S. China’s trade surplus hit a record US$262.2 billion in 2007, overtaking Japan to become the world 's third largest trading nation, right after the US and Germany.