1. (GDP) with USD 214 billion; 35
1. China’sEconomic· Brief HistoryForcenturies China has been widely acknowledged as a prominent civilization, overtakingthe major parts of the globe in various sectors despite the nation’s downfallin the 19th and early 20th century. The key changesinitiated since the implementation of the Chinese Communist Party under theguidance of Mao Zedong, the execution of control over the consumptions expensesof the population as well as the promotion of industry.
After 1978, theeconomic reform under Mao Zedong’s successor, Deng Xiaoping who is at the coreof the new generation leadership has prosperously led the country to theflourish of economic development as the concentration is now diverted to a moremarket-oriented economic development, in parallel with the much improved theliving standards of the people even with the remain political control.Sincethe implementation of the economic reforms—the country ranked ninth in nominalgross domestic product (GDP) with USD 214 billion; 35 years later it jumped upto second place with a nominal GDP of USD 9.2 trillion. The economic growthrate of China has constantly been increasing and eventually reached its peak inthe 1990s as the growth skyrocketed to a high of 15,3 %, after then the GDPgrowth rate started to stabilize.· Economic crisisUntilthe economic crisis in 2008, in which China’s economic growth rate has droppeddramatically to only 6% in 2009, however China weathered the global economiccrisis better than most other countries. State Council revealed a CNY 4.0 trillion (USD585 billion) stimulus package in an effort to protect from the financialcrisis. The program powered economic growth generally through huge investment developments,which caused worries that the nation’s asset could be on the verge of becominga bubble, overinvestment and surplus capacity in some industries.
However, China went through the financialcrisis in good shape, with GDP rising above 9%, low inflation and a soundfiscal position. Even though, the policies applied during the crisis to fostereconomic growth worsened the country’s macroeconomic imbalance.Graph1: China GDP Annual Growth rate1 2. China’sEconomic Growth componentsChinahas constructed its major economic growth on low-cost exports of machinery andequipment; they have soon diverse themselves onto the world’s manufacturinghub, where the secondary sector (comprising industry and construction) signifiedthe largest share of GDP. Enormousgovernment spending went into state-owned companies to maintain those exports. Thedominating companies include the big three energy corporations: PetroChina,Sinopec and China National Offshore Oil Corporation.
These state companies areless profitable than private businesses. They return only 4.9 percent on assetsparalleled to 13.2 percent for private companies. However,in recent years, China’s transformation pushed the tertiary sector and, in2013, it converted to be the largest category of GDP with a share of 46.1%,while the secondary sector still accounted for 45.0% of the country’s total output.
Meanwhile, the primary sector’s weight in GDP has minimized intensely since thecountry opened to the world. · ExportsChinawas the world’s largest exporter from 2013 to 2015. It exported approximately $2trillion of its production in 2016. In which in 2015, 18% of its exports are tothe United States. China’s trade with Hong Kong was nearly as much (14.6 %).Its trade with Japan (6 %) and South Korea (4.
5 %) was much less. China stimulatedthe trade integration with African nations on the infrastructure with oil inreturn. It augmented trade agreements with Southeast Asian nations (ASEAN-ChinaFree Trade Area) and many Latin American countries. Chinamanufacture for major foreign businesses, including U.S. companies.
They shipraw materials to China in which the factory workers will continue to build thefinal products and ship them back to the United States. In this way, a lot ofChina’s so-called “exports” are technically American products. China mainlysends out electrical equipment and other types of machinery. This includescomputers and data processing equipment as well as optical and medicalequipment.
Alongside with the exportation of apparel, fabric and textiles butmost of all China is the world’s largest exporter of steel.· ImportsChina is the world’s third largest importer. In 2016,it imported $1.4 trillion.
That includes the importation of raw commoditiesfrom Latin America and Africa, such as oil and other fuels, metal ores,plastics and organic chemicals. It’s the world’s largest importer of aluminumand copper. As the consumption of commodity withinChina China’s has been rising, it has stimulated a world-wide boom in miningand agriculture. Unfortunately, suppliers over-produced, creating too muchsupply. As a result, prices cratered in 2015. As China’s growth slows, pricesfor commodities used in manufacturing, such as metals, will drop. 3. China’sgrowth stabilizationPriorto the global economic crisis a decade ago, the Chinese economy was developingat a swift pace.
But when the crisis hit, the growth rate fell relativelysharply. Thanks to a $4 trillion stimulus package, growth soon reached itstrough and began to climb again, reaching 12.2% year on year in the firstquarter of 2010.Soonafter, however, monetary tightening put economic growth back on a descending route,urging the government to untie policy and lead mini-stimulus packages in late2011 and early 2012. This produced a short-lived and moderate rebound, witheconomic growth again beginning to slide, albeit less steeply, soon after.Finally,in 2016, Chinese economic development initiated to steady again, with theannual rate reaching 6.7% for three quarters in a row.
The latest figures showthat China’s economy grew by 6.8% in the third quarter of 2017, leading manyeconomists to offer rather optimistic forecasts for the coming year.ThoughChina’s financial system is tense with worrying exposures, many Chineseeconomists believe the country has at last entered a period of stable annualgrowth of about 6.5%—a level in line with potential. The International MonetaryFund has echoed this view in its latest World Economic Outlook, predicting 6.
8%growth in 2017 and a 6.5% rate in 2018. 4. SummaryTheChina’s economic growth has illustrated an astonishing plan and implementationin which is at most obvious with its output. The preparation of the economicreforms to prepare for the upcoming force and crisis especially in 2008 is theperfect example from China which shows the fundamental for the adaptation iscertainly crucial for a country’s economic foundation for the future