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China Overview of Economy

A brief guide to China economy, China economy overview, Inflation rates GDP and other economic indicators in China. The Chinese economy is without doubt a key player in the global economic market. Despite the fact that in 2003 the per capita income (PPP) was relatively low, the Chinese economy is still considered the second largest in the world, after the United States. Changes in the Chinese market have a considerable effect on the world economy. Thus for example, in 2004, one of the reasons for the dramatic increase in world oil prices is attributed to the rising demand in China, including the demand for new automobiles. The economic revolution in China began in 1978 when the Government contributed to turning a Communist-style centralized economy to one that operates on the principles of a market economy. The steps towards modernization led to a tremendous increase in foreign investments in China and to the abolition or replacement of factories that were controlled centrally by the Government and turning them into separate entities that could be controlled by local managers. Change has made its mark on agriculture as well. Many farms have gone from the communist to the village method or that of the single farm. The main prosperity has been seen in industry and the services sector while agriculture is on a constant decline. The main cities that have benefited from the economic boom are those cities in China that lie along the coast. The economic changes in China have created a number of problems, starting from that of air pollution that derives from the increase in industry, and ending with the dismissal of workers who were previously employed in industry or in agriculture based on communist methods. The services sector contributes some 32% to the Chinese economy, industry contributes approximately 53% and the balance, some 15%, has its source in agriculture and forestry. The main exports from China are machinery and equipment, clothing and toys. The main imports to China are machinery and equipment, chemicals and fuel. China's main trading partners are the United States, Japan and Taiwan. In 2003, the main exports, approximately 21%, were to the United States, with some 17% to Hong Kong and approximately 14% to Japan. The main imports into China in 2003 were from Japan, some 18%, with Taiwan accounting for approximately 12% and some 10% from South Korea. Imports from the United States totaled some 8%. From the aspect of natural resources, a wide range of minerals are to be found in China, among them coal, iron, copper, aluminum, mercury and others. The size of Chinese mineral reserves is rated third largest in the world. China is also rich in oil and natural gas resources. An analysis of the main indices in China shows that the GDP in 2001 - 2003 was very high at over 7.5% per annum. Inflation in these same years was particularly low, with a negative change or a positive change of up to 1% per annum. In 2003, the unemployment rate in China was over 10.1%, a slight rise compared to 2002. In 2003, the per capita GDP (PPP) was estimated at 5,000 dollars which is low compared to that of the developed countries. The average monthly wage in China, as at April 2004, was 800 - 2,500 Yuan (between 30 - 97 dollars), depending on the sector while the average monthly salary in the financial sector as well as in business with foreign investments is very much higher.

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