Economy of China: Difference between revisions

Content deleted Content added

Inline

Revision as of 21:16, 13 December 2007

Template:Economy of the PRC table The economy of the People's Republic of China is the second largest in the world when measured by purchasing power parity GDP, and is the fourth largest in the world when measured by nominal GDP, and is the fastest growing major nation in recent history with consistent annual GDP growth rates well above 10%.^[1] Its economic output for 2006 was US $2.68 trillion.^[2] Its per capita income for 2006 was approximately US $2,000, and US $7,800 with PPP, low to middle income by world standards (83rd of 183 nations in 2006), and rising rapidly. As of 2005, 70% of China's GDP was in the private sector. The smaller public sector was dominated by about 200 large state enterprises concentrated mostly in utilities, heavy industries, and energy resources.^[3]

Despite China's size, the abundance of its resources, and having about 20 percent of the world's population living within its borders, its role in the world economy traditionally has been relatively small. Since the late 1970s, however, the Chinese government has been reforming the economy from a Soviet-type centrally planned economy to a more market-oriented economy and has become a major player in the global economy. Since being introduced, these reforms have helped lift millions of its citizens out of poverty, bringing the poverty rate down from 53% in 1981 to 8% in 2001.^[4] This economic system has been called "Socialism with Chinese characteristics" and can be considered as a type of mixed economy. Only a third of the economy is now directly state-controlled.

To this end, authorities have shifted agricultural work (in which approximately half of the work force is engaged) to a system of household responsibility in place of the old collectivization, increased the authority of local government officials and plant managers in industry, permitted a wide variety of private enterprise in services and light manufacturing, and opened the economy to increased foreign trade and foreign investment. As its role in world trade has steadily grown, its importance to the international economy has also increased apace. China's foreign trade has grown faster than its GDP for the past 25 years.^[5] The government's decision to permit China to be used by multinational corporations as an export platform has made the country a major competitor to other Asian export-led economies, such as South Korea, Singapore, and Malaysia.^[6]

The government has emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government also has focused on foreign trade as a major vehicle for economic growth. While the accuracy of official PRC figures remain the subject of much debate, Chinese officials claim the result has been a tenfold increase in GDP since 1978. Some international economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector. Nevertheless, key bottlenecks continue to constrain growth. Available energy is insufficient to run at fully-installed industrial capacity,^[7] the transport system is inadequate to move sufficient quantities of such critical items as coal,^[8] and the communications system^[9] cannot yet fully meet the needs of an economy of China's size and complexity.

The two most important sectors of the economy have traditionally been agriculture and industry, which together employ more than 70 percent of the labor force and produce more than 60 percent of GDP. The two sectors have differed in many respects. Technology, labor productivity, and incomes have advanced much more rapidly in industry than in agriculture. Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government. The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society. China is the world's largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), and cotton. The country is one of the world's largest producers of a number of industrial and mineral products, including cotton cloth, tungsten, and antimony, and is an important producer of cotton yarn, coal, crude oil, and a number of other products. Its mineral resources are probably among the richest in the world but are only partially developed. Although China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, most of its industrial output still comes from relatively backward and ill-equipped factories. The technological level and quality standards of its industry as a whole are still fairly low.^[10]

Other major problems concern the labor force and the pricing system. There is large-scale underemployment in both urban and rural areas, and the fear of the disruptive effects of major, explicit unemployment is strong. The prices of certain key commodities, especially of industrial raw materials and major industrial products, are determined by the state. In most cases, basic price ratios were set in the 1950s and are often irrational in terms of current production capabilities and demands. China's increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem. Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s.^[11] By the early 1990s these subsidies began to be eliminated, in large part due to China's admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.

History

1949-1980

In 1949, China followed a socialist heavy industry development strategy, or the "Big Push" strategy. Consumption was reduced while rapid industrialization was given high priority. The government took control of a large part of the economy and redirected resources into building new factories. Entire new industries were created. Most important, economic growth was jump-started. Tight control of budget and money supply reduced inflation by the end of 1950. Though most of it was done at the expense of suppressing the private sector of small to big businesses via the Three-anti/five-anti campaigns between 1951 to 1952. The campaigns were notorious for being anti-capitalist, and imposed baseless charges that allowed the government to punish capitalists with severe fines.^[12]

In 1952, gross industrial output of China was estimated at 34,900 million yuan in current prices.^[13] GDP per capita grew a paltry 17% in the 1960s, rising to 70% in the 1970s, and surged ahead of India registering a remarkable growth of 63% in the turbulent 1980s and finally reaching a peak growth of 175% in the 1990s.^[14] However, Chinese prosperity still remained concentrated in the coastal and southern provinces and efforts have been made in recent years to expand the prosperity to the inner provinces and the industrial northeast rust belt (see "Revitalize Northeast China").

1980-1990

In the 1980s, China tried to combine central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits. This economic and industrial transition, gradually moved away from Soviet-style central planning and it also gradually adopted market economy mechanisms and reduced government control. Industry, largely based on state and collective ownership, was initially marked by increasing technological advancements and productivity. China's people's communes were eliminated by 1984 - after more than 25 years - and the "contract responsibility system" of production was introduced in the agricultural sector. Private ownership of production assets became legal, although many major non-agricultural and industrial facilities were still state-owned and centrally planned. Restraints on foreign trade were relaxed and joint ventures encouraged.

As China pursued agricultural reforms, the dismantling of the commune system and the introduction of the household responsibility system provided peasants greater decision-making in agricultural activities. The government also encouraged non-agricultural activities, such as village enterprises in rural areas, and promoted more self-management for state-owned enterprises, increased competition in the marketplace, and facilitated direct contact between Chinese and foreign trading enterprises. China also relied more upon foreign financing and imports.

Chinese paramount leader Deng Xiaoping on June 30, 1984 said:

"What is socialism and what is Marxism? We were not quite clear about this in the past. Marxism attaches utmost importance to developing the productive forces. We have said that socialism is the primary stage of communism and that at the advanced stage the principle of from each according to his ability and to each according to his needs will be applied. This calls for highly developed productive forces and an overwhelming abundance of material wealth. Therefore, the fundamental task for the socialist stage is to develop the productive forces. The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system. As they develop, the people's material and cultural life will constantly improve. One of our shortcomings after the founding of the People's Republic was that we didn't pay enough attention to developing the productive forces. Socialism means eliminating poverty. Pauperism is not socialism, still less communism."^[15]

During the 1980s, these reforms led to average annual rates of growth of 10% in agricultural and industrial output. Rural per capita real income doubled. Industry posted major gains especially in coastal areas near Hong Kong and across the strait from Taiwan, where foreign investment helped spur output of both domestic and export goods. China became self-sufficient in grain production; rural industries accounted for 23% of agricultural output, helping absorb surplus labor in the countryside. The variety of light industrial and consumer goods increased. Reforms began in the fiscal, financial, banking, price setting, and labor systems.

China's nominal GDP trend from 1952 to 2005 (click to enlarge).

On the darker side, the leadership had often experienced in its hybrid system the worst results of socialism (lassitude, political corruption, disrespect of personal property) and of capitalism (windfall gains, a huge and widening gap between rich and poor, stepped-up inflation). Beijing thus has periodically backtracked, re-tightening central controls at intervals. At the end of 1988, in reaction to a surge of inflation caused by accelerated price reforms, the leadership introduced an austerity program.

1990-2000

China's economy regained momentum in the early 1990s. Deng Xiaoping's Chinese New Year's visit to southern China in 1992 gave economic reforms new impetus. The 14th Communist Party Congress later in the year backed up Deng Xiaoping's renewed push for market reforms, stating that China's key task in the 1990s was to create a "socialist market economy". Continuity in the political system but bolder reform in the economic system were announced as the hallmarks of the 10-year development plan for the 1990s.

During 1993, output and prices were accelerating, investment outside the state budget was soaring, and economic expansion was fueled by the introduction of Special Economic Zones (SEZs) and the influx of foreign capital that the SEZs facilitated. The government approved additional long-term reforms aimed at giving still more play to market-oriented institutions and at strengthening the center's control over the financial system; state enterprises would continue to dominate many key industries in what was now termed "a socialist market economy". The government called in speculative loans, raised interest rates, and reevaluated investment projects. The growth rate was thus tempered, and the inflation rate dropped from over 17% in 1995 to 8% in early 1996. The economy slowed in the late 1990s, influenced in part by the Asian Financial Crisis, with official growth of 7.8% in 1998, and 7.1% for 1999.

2000-present

Growth accelerated to record highs early in the new century. This was due to an unprecedented move by China's leaders to engage and accepted U.S. and U.N.-sponsored expertise in revitalizing and reinventing its economic structure.

On March 3, 2000, the Chinese leadership ordered the immediate liberalization of foreign trade, prices, and currency. This entailed removing old practiced Mao-era price controls in order to direct goods back into urban and poor rural stores, removing all legal barriers to private trade and manufacture, and cutting all government sponsored subsidies to past state farms and industries while allowing foreign imports into the Chinese market in order to break the power of past state monopolies. As was with any state-sponsored economic overhaul, the process created winners and losers, depending on how particular industries, classes, age groups, ethnic groups, regions, and other sectors of Chinese society were positioned. Some greatly benefited by the opening of competition; others simply suffered especially those in the rural farming communities. Among the winners were the new class of university educated entrepreneurs, district party officials who controlled imports and exports (some who were corrupt), corporate officers mainly in Hong Kong and Macau who managed the mass influx of foreign investment capital, overseas agents of state-sponsored plants and factories, amongst a few others.

However by liberalizing prices, it meant that the elderly and the poor who were on state-fixed incomes suffered a severe drop in economic standards, and a huge percentage experienced a lifetime of savings being wiped out almost overnight. China’s re-invention brought on high inflation in the double-digit mark, but the economic design team implemented macroeconomic mechanisms within their economic program features that stabilized and curbed the trend within a matter of three months. The Chinese government acknowledged early in 2000 that though the transformation created a new economic class of mostly rural poor, the structural adjustment of its economy was a austerity regime it must willingly undertake and follow as suggested by the four western economists. It let most prices float, raised interest rates to even record highs, raised heavy new taxes, sharply cut back on government subsidies to most industries, and made massive cuts in state welfare spending. State-owned enterprises found themselves without state operating capital nor financing which led to mass unemployment due to the shut down of many old state-run factories and manufacturers.

The rationale of the programs implemented by the western economists was to squeeze the built-in inflationary pressure out of the economy so that producers would begin making sensible decisions about production, pricing and investment instead of chronically over-using resources. They set up the market rather than central planners to determine prices. In product mixes, output levels, and the like, the economists created an incentive structure in the economy where efficiency and risk would be rewarded and waste and carelessness were punished. Removing the causes of chronic inflation, the economists with government approval set a precondition mark for all other reforms: uncontrolled hyperinflation in due time will wreck both social and economic progress so it must be curbed. Such features over a period of six months greatly stabilized the state budget.^[16]

In December 2005, China's National Bureau of Statistics revised its 2005 nominal GDP upwards by 16.8% or RMB 2,336.3 billion (US $281.9 billion), making China the 6th largest economy in the world (overtaking Italy, with a GDP of almost US $2 trillion).^[17] At the start of 2006, China officially announced itself as the 4th largest economy, measured by USD-exchange rate overtaking France and the United Kingdom. At the beginning of 2007 China stood as the second largest economy in the world measured by domestic PPP (purchasing power parity) measure, at about US $10 trillion. Given that the validity predictions of economic size is often disputed, they cannot be made with authority. Various predictions range from China's economy overtaking Japan's in size by 2020, to China's economy already being twice as large. Likewise predictions range from China's economy overtaking the United State's by 2010, to overtaking it in 2040. However it is generally acknowledged that China will arrive at full industrialisation and reach the top ranks of countries by per capita GDP by mid century.

The Central Committee of the Chinese Communist Party recently approved the draft for the 11th 5-year plan for 2006-2010. The plan called for a relatively conservative 45% increase in GDP and 20% reduction in energy intensity by 2010.

Government role

Since 1949 the government, under China's socialist political and economic system, has been responsible for planning and managing the national economy.^[18] In the early 1950s, the foreign trade system was monopolized by the state. Nearly all the domestic enterprises were state-owned and the government had set the prices for key commodities, controlled the level and general distribution of investment funds, determined output targets for major enterprises and branches, allocated energy resources, set wage levels and employment targets, operated the wholesale and retail networks, and steered the financial policy and banking system. In the countryside from the mid-1950s, the government established cropping patterns, set the level of prices, and fixed output targets for all major crops.

Since 1978 when economic reforms were instituted, the government role in the economy has lessened to a great degree. Industrial output by state enterprises slowly declined, although a few strategic industries have today remained predominantly state-owned. While the role of the government in managing the economy has been reduced and the role of both private enterprise and market forces increased, the government maintains a major role in the urban economy. With its policies on such issues as agricultural procurement the government also retains a major influence on rural sector performance. The State Constitution of 1982 specified that the state is to guide the country's economic development by making broad decisions on economic priorities and policies, and that the State Council, which exercises executive control, was to direct its subordinate bodies in preparing and implementing the national economic plan and the state budget. A major portion of the government system (bureaucracy) is devoted to managing the economy in a top-down chain of command with all but a few of the more than 100 ministries, commissions, administrations, bureaus, academies, and corporations under the State Council are concerned with economic matters.

Each significant economic sector is supervised and controlled by one or more of these organizations, which includes the People's Bank of China, National Development and Reform Commission, Ministry of Finance, and the ministries of agriculture; coal industry; commerce; communications; education; light industry; metallurgical industry; petroleum industry; railways; textile industry; and water resources and electric power. Several aspects of the economy are administered by specialized departments under the State Council, including the National Bureau of Statistics, Civil Aviation Administration of China, and the tourism bureau. Each of the economic organizations under the State Council directs the units under its jurisdiction through subordinate offices at the provincial and local levels.

The whole policy-making process involves extensive consultation and negotiation.^[19] Economic policies and decisions adopted by the National People's Congress and the State Council are to be passed on to the economic organizations under the State Council, which incorporates them into the plans for the various sectors of the economy. Economic plans and policies are implemented by a variety of direct and indirect control mechanisms. Direct control is exercised by designating specific physical output quotas and supply allocations for some goods and services. Indirect instruments — also called "economic levers" — operate by affecting market incentives. These included levying taxes, setting prices for products and supplies, allocating investment funds, monitoring and controlling financial transactions by the banking system, and controlling the allocation of key resources, such as skilled labor, electric power, transportation, steel, and chemicals (including fertilizers). The main advantage of including a project in an annual plan is that the raw materials, labor, financial resources, and markets are guaranteed by directives that have the weight of the law behind them. In reality, however, a great deal of economic activity goes on outside the scope of the detailed plan, and the tendency has been for the plan to become narrower rather than broader in scope. A major objective of the reform program was to reduce the use of direct controls and to increase the role of indirect economic levers. Major state-owned enterprises still receive detailed plans specifying physical quantities of key inputs and products from their ministries. These corporations, however, have been increasingly affected by prices and allocations that were determined through market interaction and only indirectly influenced by the central plan.

Total economic enterprise in China is apportioned along lines of directive planning (mandatory), indicative planning (indirect implementation of central directives), and those left to market forces. In the early 1980s during the initial reforms enterprises began to have increasing discretion over the quantities of inputs purchased, the sources of inputs, the variety of products manufactured, and the production process. Operational supervision over economic projects has devolved primarily to provincial, municipal, and county governments. The majority of state-owned industrial enterprises, which were managed at the provincial level or below, were partially regulated by a combination of specific allocations and indirect controls, but they also produced goods outside the plan for sale in the market. Important, scarce resources — for example, engineers or finished steel — may have been assigned to this kind of unit in exact numbers. Less critical assignments of personnel and materials would have been authorized in a general way by the plan, but with procurement arrangements left up to the enterprise management.

In addition, enterprises themselves are gaining increased independence in a range of activity. While strategically important industry and services and most of large-scale construction have remained under directive planning, the market economy has gained rapidly in scale every year as it subsumes more and more sectors.^[20] Overall, the Chinese industrial system contains a complex mixture of relationships. The State Council generally administers relatively strict control over resources deemed to be of vital concern for the performance and health of the entire economy. Less vital aspects of the economy have been transferred to lower levels for detailed decisions and management. Furthermore, the need to coordinate entities that are in different organizational hierarchies generally causes a great deal of informal bargaining and consensus building.^[20]

Consumer spending has been subject to a limited degree of direct government influence but is primarily determined by the basic market forces of income levels and commodity prices. Before the reform period, key goods were rationed when they were in short supply, but by the mid-1980s availability had increased to the point that rationing was discontinued for everything except grain, which could also be purchased in the free markets. Collectively owned units and the agricultural sector were regulated primarily by indirect instruments. Each collective unit was "responsible for its own profit and loss," and the prices of its inputs and products provided the major production incentives.

Vast changes were made in relaxing the state control of the agricultural sector from the late 1970s. The structural mechanisms for implementing state objectives — the people's communes and their subordinate teams and brigades — have been either entirely eliminated or greatly diminished.^[21] Farm incentives have been boosted both by price increases for state-purchased agricultural products, and it was permitted to sell excess production on a free market. There was more room in the choice of what crops to grow, and peasants are allowed to contract for land that they will work, rather than simply working most of the land collectively. The system of procurement quotas (fixed in the form of contracts) has been being phased out, although the state can still buy farm products and control surpluses in order to affect market conditions.^[22]

Foreign trade is supervised by the Ministry of Commerce, customs, and the Bank of China, the foreign exchange arm of the Chinese banking system, which controls access to the foreign currency required for imports. Ever since restrictions on foreign trade were reduced, there have been broad opportunities for individual enterprises to engage in exchanges with foreign firms without much intervention from official agencies.

Although the government still dominates the economy in parts, the extent of its control has been limited by the sheer volume of economic activity. Furthermore, the concept of government supervision of the economy had changed from one of direct state control to one of indirect guidance of a more dynamic economy.

Regional economies

China's underdeveloped transportation system — combined with important differences in the availability of natural and human resources and in industrial infrastructure — has produced significant variations in the regional economies of China. The three wealthiest regions are along the southeast coast, centred on the Pearl River Delta; along the east coast, centred on the Lower Yangtze River; and near the Bohai Gulf, in the Beijing-Tianjin-Liaoning region. It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole, and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions.

See also: List of administrative regions by GDP, List of administrative regions by GDP per capita, and List of cities by GDP per capita.

Hong Kong and Macau

In accordance with the One Country, Two Systems policy, the economies of the former European colonies, Hong Kong and Macao, are separate from the rest of the PRC, and each other. Both Hong Kong and Macau are free to conduct and engage in economic negotiations with foreign countries, as well as participating as full members in various international economic organizations such as the World Customs Organization, the World Trade Organization and the Asia-Pacific Economic Cooperation forum, often under the names "Hong Kong, China" and "Macao, China".

See also: Closer Economic Partnership Arrangement with Hong Kong and Macau.

Development strategies

Template:China regional economic strategies

See also: List of administrative divisions by Human Development Index (HDI).

These strategies are aimed at the relatively poorer regions in China in an attempt to prevent widening inequalities:

Great Western Development, designed to increase the economic situation of the western provinces through capital investment and development of natural resources.
Revitalize Northeast China, to rejuvenate the industrial bases in the northeastern China. It covers 3 provinces: Heilongjiang, Jilin, and Liaoning.
Rise of Central China Plan, to accelerate the development of its central regions. It covers 6 provinces: Shanxi, Henan, Anhui, Hubei, Hunan, and Jiangxi.
Third Front, focused on the southwestern provinces.

Foreign investment abroad:

Go Global, to encourage its enterprises to invest overseas.

Macroeconomic trends

The table below shows the trend of the GDP of China at market prices estimated by the IMF with figures in millions (Chinese yuan).^[23]^[24] For purchasing power parity comparisons, the US dollar is exchanged at 2.05 CNY only.

Year	Gross domestic product	US dollar exchange	Inflation index (2000=100)
1955	91,000	-	-
1960	145,700	-	-
1965	171,600	-	-
1970	225,300	-	-
1975	299,700	-	-
1980	460,906	¥1.49	25
1985	896,440	¥2.93	30
1990	1,854,790	¥4.78	49
1995	6,079,400	¥8.35	91
2000	9,921,500	¥8.27	100
2005	18,232,100	¥8.19	106

Systemic problems

From 1995-1999 inflation dropped sharply, reflecting the tighter monetary policy of global central banks and stronger measures to control food prices. At the same time, the government struggled to collect revenues due from provinces, businesses, and individuals; reduce corruption and other economic crimes; and keep afloat the large state-owned enterprises, most of which had not participated in the vigorous expansion of the economy and many of which had been losing the ability to pay full wages and pensions. From 50 to 100 million surplus rural workers were 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. Another long-term threat to continued rapid economic growth has been the deterioration in the environment, notably air and water pollution, soil erosion, growing desertification and the steady fall of the water table especially in the north. China also has continued to lose arable land because of erosion and infrastructure development.

Inflation

In November, 2007 inflation rose to about 7% on an annual basis.^[25] The food and fuel sectors were major problem areas, with meat and fuel posing special difficulties.

Shortages of gasoline and diesel fuel developed in the fall of 2007 due to reluctance of refineries to produce fuel at low prices set by the state. These prices were slightly increased in November, 2007 with fuel selling for $2.65 a gallon, still slightly below world prices. Price controls were in effect on numerous basic products and services, but were ineffective with food, prices of which were rising at an annual rate of 18.2% in November, 2007.^[26]^[27]

Pork is an important part of the Chinese economy with a per capita consumption of a fifth of a pound per day. The worldwide rise in the price of animal feed associated with increased production of ethanol from corn resulted in steep rises in pork prices in China in 2007. Increased cost of production interacted badly with increased demand resulting from rapidly rising wages. The state responded by subsidizing pork prices for students and the urban poor and called for increased production. Release of pork from the nation's strategic pork reserve was considered.^[28]

Economic overheating

Another significant hurdle for the Chinese economy has been perceived overheating and inflation in the economy, due to the rapid growth of the last decade. Chinese officials deny that the economy as a whole is over-heating, although they do admit that certain areas are "heating up" with little control. The recent economic growth has been the result of large scale investments, which has been far from efficient in comparison to other countries such as India.^[29] According to Chinese government research, the return rate of investment in India is higher than that of China's, with a larger gap in comparison with developed countries.^[29]

Taxation has also proved to be a problem in stabilizing the Chinese economy with tax cuts being planned for certain economic sectors and industries. A primary goal of the tax cuts have been to assist in decreasing the investment disparity between rural and urban areas, and to encourage government owned corporations to compete better with foreign corporations.

Labor shortages and rising export costs

By 2005, there were signs of stronger demand for labor with workers being able to choose employment which offered higher wages and better working conditions, enabling some to move away from the restrictive dormitory life and boring factory work which have characterized export industries in provinces such as Guangdong and Fujian. Minimum wages began rising toward the equivalent of 100 U.S. dollars a month as companies scrambled for employees, with some paying as much as $150 a month on average. The labor shortage was partially driven by the demographic trends, as the proportion of people of working age fell as the result of strict family planning.^[30]

It was reported in The New York Times in April 2006 that labor costs continued to increase and a shortage of unskilled labor had developed with a million or more employees being sought. Operations which relied on cheap labor were contemplating relocations to cities in the interior or to other low-cost countries such as Vietnam or Bangladesh. Many young people were attending college rather than opting for minimum-wage factory work. The demographic shift resulting from the one-child policy continued to reduce the supply of young entry-level workers. Also, government efforts to advance economic development in the interior of the country were beginning to be effective at creating better opportunities there.^[31] A follow-up article in The New York Times in late August 2007 reported acceleration of this trend. The minimum wage a young unskilled factory worker could be hired at had increased to $200 with experienced workers commanding more. There was strong demand for young workers willing to work long hours and live in dormitory conditions, while older workers, over forty, were considered unsuitable. Rising wages were being, to a certain extent, offset by increases in productivity, but in 2007, a slight rise in the cost of imports from China was recorded by the United States government: "After falling since its inception in December, 2003, the price index for imports from China rose 0.4 percent in July, 2007, the largest monthly increase since the index was first published in December 2003. The July increase was the third consecutive monthly advance. Over the past year, import prices from China increased 0.9 percent."^[32]^[33]

Financial and banking system

Most of China's financial institutions are state governed. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration to the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese) are managed by the Bank of China (BOC), which has a number of branch offices in several countries.

Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public.

China's economic reforms greatly increased the economic role of the banking system. Enterprises and individuals can go to the banks to obtain loans outside the state plan, and this has proved to be a major source of financing both for start-up companies and businesses and for the expansion, modernization or privatization of existing enterprises. Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also become increasingly prominent. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself.

With two stock exchanges (Shanghai Stock Exchange and Shenzhen Stock Exchange), mainland China's stock market had a market value of $1 trillion by January 2007, which became the third largest stock market in Asia, after Japan and Hong Kong.^[34] It is estimated to be the world's third largest by 2016.^[35]

Currency system

Currency: 1 yuan = 10 jiao = 100 fen

The renminbi is held in a floating exchange-rate system managed primarily against the US dollar.

Exchange rates: Chinese yuan per US $1 - Starting July 21, 2005 China has allowed the Renminbi to fluctuate at a daily rate of up to .05%. The rate of exchange in mid-2007 was RMB 7.45, while in early 2006 was RMB 8.07:US $1 = 8.2793 yuan (January 2000), 8.2783 (1999), 8.2790 (1998), 8.2898 (1997), 8.3142 (1996), 8.3514 (1995).

Note: Beginning January 1, 1994, the People's Bank of China quotes the midpoint rate against the US dollar based on the previous day's prevailing rate in the interbank foreign exchange market.

Agriculture

Production of wheat from 1961-2004. Data from FAO, year 2005. Y-axis: Production in metric ton.

According to the United Nations World Food Program, in 2003, China fed 20 percent of the world's population with only 7 percent of the world's arable land.^[36] China ranks first worldwide in farm output, and, as a result of topographic and climatic factors, only about 10–15 percent of the total land area is suitable for cultivation. Of this, slightly more than half is unirrigated, and the remainder is divided roughly equally between paddy fields and irrigated areas. Nevertheless, about 60 percent of the population lives in the rural areas, and until the 1980s a high percentage of them made their living directly from farming. Since then, many have been encouraged to leave the fields and pursue other activities, such as light manufacturing, commerce, and transportation; and by the mid-1980s farming accounted for less than half of the value of rural output.

The quality of the soil varies. Environmental problems such as floods, drought, and erosion pose serious threats in many parts of the country. The wholesale destruction of forests gave way to an energetic reforestation program that proved inadequate, and forest resources are still fairly meagre.^[37] The principal forests are found in the Qinling Mountains and the central mountains and on the Sichuan-Yunnan plateau. Because they are inaccessible, the Qinling forests are not worked extensively, and much of the country's timber comes from Heilongjiang, Jilin, Sichuan, and Yunnan.

Less than half of China's labor force is engaged in agriculture. There are over 300 million Chinese farm workers - mostly laboring on small pieces of land relative to U.S. farms. Virtually all arable land is used for food crops. China is the world's largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), cotton, potatoes, sorghum, peanuts, tea, millet, barley, oilseed, pork, and fish. Major non-food crops, including cotton, other fibers, and oilseeds, furnish China with a small proportion of its foreign trade revenue. Agricultural exports, such as vegetables and fruits, fish and shellfish, grain and grain products, and meat products, are exported to Hong Kong. Yields are high because of intensive cultivation, but there are hopes to further increase agricultural production through improved plant stocks, fertilizers, and technology.

Western China, comprising Tibet, Xinjiang, and Qinghai, has little agricultural significance except for areas of floriculture and cattle raising. Rice, China's most important crop, is dominant in the southern provinces, many of which yield two harvests a year. In the north, wheat is of the greatest importance, while in central China wheat and rice vie with each other for the top place. Millet and kaoliang (a variety of grain sorghum) are grown mainly in the northeast and some central provinces, which, together with some northern areas, also provide considerable quantities of barley. Most of the soybean crop is derived from the north and the northeast; corn (maize) is grown in the center and the north, while tea comes mainly from the hilly areas of the southeast. Cotton is grown extensively in the central provinces, but it is also found to a lesser extent in the southeast and in the north. Tobacco comes from the center and parts of the south. Other important crops are potatoes, sugar beets, and oilseeds.

There is still a relative lack of, especially advanced, agricultural machinery. For the most part the Chinese peasant or farmer depends on simple, nonmechanized farming implements. Good progress has been made in increasing water conservancy, and about half the cultivated land is under irrigation.

Animal husbandry constitutes the second most important component of agricultural production. China is the world's leading producer of pigs, chickens, and eggs, and it also has sizable herds of sheep and cattle. Since the mid-1970s, greater emphasis has been placed on increasing the livestock output. China has a long tradition of ocean and freshwater fishing and of aquaculture. Pond raising has always been important and has been increasingly emphasized to supplement coastal and inland fisheries threatened by overfishing and to provide such valuable export commodities as prawns.

Industry and manufacturing

China ranks third worldwide in industrial output. Main industries include iron and steel, coal, machinery, armaments, textiles and apparel, petroleum, cement, chemical, footwear, toys, food processing, automobiles, consumer electronics, telecommunications, information technology.

Since the founding of the People's Republic, industrial development has been given considerable attention. Among the various industrial branches the machine-building and metallurgical industries have received the highest priority. These two areas alone now account for about 20-30 percent of the total gross value of industrial output.^[38] In these, as in most other areas of industry, however, innovation has generally suffered at the hands of a system that has rewarded increases in gross output rather than improvements in variety, sophistication and quality. China, therefore, still imports significant quantities of specialized steels. Overall industrial output has grown at an average rate of more than 10 percent per year, having surpassed all other sectors in economic growth and degree of modernization.^[39] Some heavy industries and products deemed to be of national strategic importance remain state-owned, but an increasing proportion of lighter and consumer-oriented manufacturing firms are privately held or are private-state joint ventures.

The predominant focus of development in the chemical industry is to expand the output of chemical fertilizers, plastics, and synthetic fibers. The growth of this industry has placed China among the world's leading producers of nitrogenous fertilizers. In the consumer goods sector the main emphasis is on textiles and clothing, which also form an important part of China's exports. Textile manufacturing, a rapidly growing proportion of which consists of synthetics, account for about 10 percent of the gross industrial output and continues to be important, but less so than before. The industry tends to be scattered throughout the country, but there are a number of important textile centers, including Shanghai, Guangzhou, and Harbin.^[40]^[41]

Major state industries are iron, steel, coal, machine building, light industrial products, armaments, and textiles. These industries completed a decade of reform (1979-1989) with little substantial management change. Prior to 1978, most output was produced by state-owned enterprises. As a result of the economic reforms that followed, there was a significant increase in production by enterprises sponsored by local governments, especially townships and villages, and, increasingly, by private entrepreneurs and foreign investors. The 1999 industrial census revealed that there were 7,930,000 industrial enterprises at the end of 1999; total employment in state-owned industrial enterprises was about 24 million. The automobile industry has grown rapidly since 2000, as is the petrochemical industry. Machinery and electronic products have become China's main exports. China is the world’s leading manufacturer of chemical fertilizers, cement, and steel. By 2002 the share in gross industrial output by state-owned and state-holding industries had decreased to 41%, and the state-owned companies themselves contributed only 16% of China’s industrial output.

China’s construction sector has grown substantially since the early 1980s. In the twenty-first century, investment in capital construction has experienced major annual increases. In 2001 investments increased 8.5% over the previous year. In 2002 there was a 16.4% increase, followed by a 30% increase in 2003. The manufacturing sector produced 44.1% of GDP in 2004 and accounted for 11.3% of total employment in 2002. Industry and construction produced 53.1% of China’s GDP in 2005. Industry (including mining, manufacturing, construction, and power) contributed 52.9% of GDP in 2004 and occupied 22.5% of the workforce.

Energy production has increased rapidly, but it still falls considerably short of demand. This is partly due to artificial energy prices that have been held so low that industries have had few incentives to conserve. Coal provides about 75-80 percent of China's energy consumption. Petroleum production, which began growing rapidly from an extremely low base in the early 1960s, has basically remained at the same level since the late 1970s. There are large petroleum reserves in the inaccessible northwest and potentially significant offshore petroleum deposits, but about half of the country's oil production still comes from the major Daqing oilfield in the northeast. China has much, and partially undeveloped, hydroelectric power potential and natural gas reserves. The government has made plans to develop nuclear power plants in the coastal and western regions (see Nuclear power in China).

Overall, the distribution of industry remains very uneven, despite serious efforts from the mid-1950s to the late 1970s to build up industry in the interior at the cost of the major cities on the east coast. While percentage growth of industry in the interior provinces generally greatly exceeded that of the coastal areas, the far larger initial industrial base of the latter has meant that a few coastal regions have continued to dominate China's industrial economy. The establishment of special economic zones in coastal areas only heightened this disparity. Shanghai by itself accounts for about 8-10 percent of China's gross value of industrial output,^[41] and the east coast accounts for about 60 percent of the national industrial output.^[38] The rate of industrialization increased and diversified after the early 1990s. Notable were the development of aerospace, aircraft, and automobile manufacturing. In addition, China expanded rapidly into the production of pharmaceuticals, software, semiconductors, electronics, and precision equipment.

Steel industry

China is the largest producer of steel in the world and the steel industry has been rapidly increasing its steel production. Iron ore production kept pace with steel production in the early 1990s but was soon outpaced by imported iron ore and other metals in the early 2000s. Steel production, an estimated 140 million tons in 2000, was increased to 419 million tons in 2006. Much of the country's steel output comes from a large number of small-scale producing centers, one of the largest being Anshan in Liaoning.

Automotive industry

By 2006 China had become the world’s third largest automotive vehicle manufacturer (after US and Japan) and the second largest consumer (only after US). Automobile manufacturing has soared during the reform period. In 1975 only 139,800 automobiles were produced annually, but by 1985 production had reached 443,377, then jumped to nearly 1.1 million by 1992 and increased fairly evenly each year up until 2001, when it reached 2.3 million. In 2002 production rose to nearly 3.25 million and then jumped to 4.44 million in 2003, 5.07 million in 2004, 5.71 million in 2005 and 7.28 million in 2006. In 2007, 9 million automobiles are expected to be produced and the country could become the number-one automaker in the world by 2020. Domestic sales have kept pace with production. After respectable annual increases in the mid- and late 1990s, passenger car sales soared in the early 2000s. In 2006, a total of 7.22 million automobiles have been sold, including 5.18 million units of passenger cars and 2.04 million units of commercial vehicles.

So successful has China’s automotive industry been that it began exporting car parts in 1999. China began to plan major moves into the automobile and components export business starting in 2005. A new Honda factory in Guangzhou was built in 2004 solely for the export market and was expected to ship 30,000 passenger vehicles to Europe in 2005. By 2004, 12 major foreign automotive manufacturers had joint-venture plants in China. They produced a wide range of automobiles, minivans, sport utility vehicles, buses, and trucks. In 2003 China exported US$4.7 billion worth of vehicles and components. The vehicle export was 78,000 units in 2004, 173,000 units in 2005, and 340,000 units in 2006. The vehicle and component export is targeted to reach US$70 billion by 2010.

Other industries

Services

China's services output ranks ranks seventh worldwide, and high power and telecom density has ensured that it has remained on a high-growth trajectory in the long-term. In 2005 the services sector produced 40.3% of China’s annual GDP, second only to manufacturing. However, its proportion of GDP is still low compared with the ratio in more developed countries, and the agricultural sector still employs a larger workforce. Prior to the onset of economic reforms in 1978, China’s services sector was characterized by state-operated shops, rationing, and regulated prices. With reform came private markets and individual entrepreneurs and a commercial sector. The wholesale and retail trade has expanded quickly, with urban areas now having many shopping malls, retail shops, restaurant chains and hotels. Public administration has still remained a main component of the service sector, while tourism has become a significant factor in employment and as a source of foreign exchange.

Tourism

Labor

A window washer on one of the thousands of skyscrapers in Shanghai.

One of the hallmarks of China's socialist economy was its promise of employment to all able and willing to work and job-security with virtually lifelong tenure. Reformers targeted the labor market as unproductive because industries were frequently overstaffed to fulfill socialist goals and job-security reduced workers' incentive to work. This socialist policy was pejoratively called the iron rice bowl.

In 1979-1980, the state reformed factories by giving wage increases to workers, which was immediately offset by sharply rising inflation rates of 6%-7%. In other words, although they were given more pay, their money was worth less and they could buy less, which meant they were poorer. The state remedied this problem, in part, by distributing wage subsidies.

The reforms also dismantled the iron rice bowl, which meant it witnessed a rise in unemployment in the economy. In 1979, immediately after the iron rice bowl was dismantled, there were 20 million unemployed people.^[42] Official Chinese statistics reveal that 4.2% of the total urban workforce was unemployed in 2004, although other estimates have reached 10%. As part of its newly developing social security legislation, China has an unemployment insurance system. At the end of 2003, more than 103.7 million people were participating in the plan, and 7.4 million laid-off employees had received benefits.

A 10-percent sample tabulation of census questionnaires from the 1982 census provided needed statistical data on China's working population and allowed the first reliable estimates of the labor force's size and characteristics. The quality of the data was considered to be quite high, although a 40-million-person discrepancy existed between the 10-percent sample and the regular employment statistics. This discrepancy can be explained by the combination of inaccurate employment statistics and varying methods of calculation and scope of coverage. The estimated mid-1982 labor force was 546 million, or approximately 54 percent of the total population. Males accounted for slightly more than half of the estimated labor force, and the labor force participation rates for persons age fifteen years and older were among the highest in the world.

The 10-percent sample showed that approximately three-fourths of the labor force worked in the agricultural sector. According to the National Bureau of Statistics, in the mid-1980s more than 120 million people worked in the nonagricultural sector. The sample revealed that men occupied the great majority of leadership positions. The average worker was about thirty years old, and three out of every four workers were under forty-five years of age. The working population had a low education level. Less than 40 percent of the labor force had more than a primary school education, and 30 percent were illiterate or semiliterate.

In mid-1982 the overall unemployment rate was estimated to be about 5 percent. Of the approximately 25 million unemployed, 12 million were men and 13 million were women. The unemployment rate was highest in the northeast and lowest in the south. The unemployment rates were higher than those of East Asian, Southeast Asian, and Pacific island countries for which data were available but were lower than the rates found in North America and Europe. Virtually all of the unemployed persons in cities and towns were under twenty years of age.

China’s estimated employed labor force in 2005 totaled 791.4 million persons, about 60% of the total population. During 2003, 49% of the labor force worked in agriculture, forestry, and fishing; 22% in mining, manufacturing, energy, and construction industries; and 29% in the services sector and other categories. In 2004 some 25 million persons were employed by 743,000 private enterprises. Urban wages rose rapidly from 2004-2007, at a rate of 13 to 19% per year with average wages near $200 in 2007.^[43]

China does have labor laws which, if enforced, would greatly alleviate common abuses such as not paying workers. In 2006, a new labor law was proposed and submitted for public comment. The new law, as currently drafted, would permit collective bargaining in a form analogous to that standard in Western economies, although the only legal unions would continue to be those affiliated with the All-China Federation of Trade Unions, the Communist Party’s official union organization. The ACFTU was established in 1925 to represent the interests of national and local trade unions and trade union councils. The ACFTU reported a membership of 130 million, out of an estimated 248 million urban workers, at the end of 2002.

The new law has support from labor activists, but is opposed by foreign corporations, including the American Chamber of Commerce and the European Chamber of Commerce. There is some expectation that the new law, if enacted, would be enforced.^[44] An ongoing effort to organize Chinese operations of foreign companies succeeded in 2006 at Wal-Mart. The campaign is projected to include Eastman Kodak, Dell and other companies.^[45]

External trade

International trade makes up a sizeable portion of China's overall economy. The course of China's foreign trade has experienced considerable transformations since the early 1950s. In 1950 more than 70 percent of the total trade was with non-Communist countries, but by 1954, a year after the end of the Korean War, the situation was completely reversed, and trade with Communist countries stood at about 75 percent. During the next few years, trade with the Communist world lost some of its standing, but it was only after the Sino-Soviet split of 1960, which resulted in the cancellation of Soviet credits and the withdrawal of Soviet technicians, that the non-Communist world began to see a speedy recovery in its position. In 1965 China's trade with other socialist countries made up only about a third of the total.

Being a Second World country at the time, a meaningful segment of China's trade with the Third World was financed through grants, credits, and other forms of assistance. At first, from 1953 to 1955, aid went mainly to North Korea and North Vietnam and some other Communist states; but from the mid-1950s large amounts, mainly grants and long-term, interest-free loans, were promised to politically uncommitted developing countries. The principal efforts were made in Asia, especially to Indonesia, Burma, Pakistan, and Ceylon, but large loans were also granted in Africa (Ghana, Algeria, Tanzania) and in the Middle East (Egypt). However, after Mao Zedong's death in 1976, these efforts were scaled back. After which, trade with developing countries became negligible, though during that time, Hong Kong and Taiwan both began to emerge as major trading partners. Since economic reforms began in the late 1970s, China decided to decentralize its foreign trade structure to integrate itself into the international trading system. On November 1991, China joined the Asia-Pacific Economic Cooperation (APEC) group, which promotes free trade and cooperation in economic, trade, investment, and technology issues, and in 2001, served as APEC chair, with Shanghai hosting the annual APEC leaders meeting.

In 1999, Premier Zhu Rongji signed a bilateral U.S.-China Agricultural Cooperation Agreement, which lifted longstanding Chinese prohibitions on imports of citrus, grain, beef, and poultry. In November 1999, the United States and China reached a historic bilateral market-access agreement to pave the way for China's accession to the World Trade Organization (WTO). As part of the far-reaching trade liberalization agreement, China agreed to lower tariffs and abolish market impediments after it joins the world trading body. Chinese and foreign businessmen, for example, will gain the right to import and export on their own - and to sell their products without going through a government middleman. Average tariff rates on key U.S. agricultural exports dropped from 31% to 14% in 2004 and on industrial products from 25% to 9% in 2005. The agreement also opens new opportunities for U.S. providers of services like banking, insurance, and telecommunications. After reaching a bilateral WTO agreement with the EU and other trading partners in summer 2000, China worked on a multilateral WTO accession package. To increase exports, China has pursued policies such as fostering the rapid development of foreign-invested factories, which assemble imported components into consumer goods for export. China joined the WTO on December 11, 2001, after 15 years of negotiations, the longest in GATT history.

China's global trade exceeded $1.758 trillion at the end of 2006.^[46] It first broke the 1 trillion mark ($1.15 trillion) in 2004, more than doubling from 2001. At the end of 2004, China became the world's third largest trading nation behind the United States and Germany.^[47] The trade surplus however was stable at $30 billion (more than 40 billion in 1998, less than 30 billion in 2003). China's primary trading partners include Japan, the U.S., South Korea, Germany, Singapore, Malaysia, Russia, and the Netherlands. The vast majority of China's imports consists of industrial supplies and capital goods, notably machinery and high-technology equipment, the majority of which comes from the developed countries, primarily Japan and the United States. Regionally, almost half of China's imports come from East and Southeast Asia, and about one-fourth of China's exports go to the same destinations. About 80 percent of China's exports consist of manufactured goods, most of which are textiles and electronic equipment, with agricultural products and chemicals constituting the remainder. Out of the five busiest ports in the world, three are in China.

The U.S. is one of China's primary suppliers of power-generating equipment, aircraft and parts, computers and industrial machinery, raw materials, and chemical and agricultural products. However, U.S. exporters continue to have concerns about fair market access due to China's restrictive trade policies and U.S. export restrictions. Intellectual property theft makes many Western companies wary of doing business in mainland China. Some Western politicians and manufacturers also say the value of the yuan is artificially low and gives export from mainland China an unfair advantage. These and other issues are behind the recent push for greater protectionism by some in the US Congress, including a 27.5% consumer tax on imports. According to U.S. statistics, China had a trade surplus with the U.S. of $170 billion in 2004, more than doubling from 1999. Wal-Mart, the United States' largest retailer, is China's 7th largest export partner, just ahead of the United Kingdom.

Chinese cars at a dealer's lot in Nizhny Novgorod, the traditional capital of the Russian automotive industry.

Trade volume between China and Russia reached $29.1 billion in 2005, an increase of 37.1% compared with 2004. A spokesman for the Ministry of Commerce, Van Jingsun, said that the volume of trade between China and Russia could exceed 40 billion dollars in 2007.^[48] China’s export of machinery and electronic goods to Russia grew 70%, which is 24% of China’s total export to Russia in the first 11 months of 2005. During the same time, China’s export of high-tech products to Russia increased by 58%, and that is 7% of China’s total exports to Russia. Also in this time period border trade between the two countries reached $5.13 billion, growing 35% and accounting for nearly 20% of the total trade. Most of China’s exports to Russia remain apparel and footwear. Russia is China’s eighth largest trade partner and China is now Russia’s fourth largest trade partner, and China now has over 750 investment projects in Russia, involving $1.05 billion. China’s contracted investment in Russia totaled $368 million during January-September of 2005, twice that in 2004.

Chinese imports from Russia are mainly those of energy sources, such as crude oil, which is mostly transported by rail, and electricity exports from neighboring Siberian and Far Eastern regions. In the near future, exports of both of these commodities are set to increase, as Russia is building the Eastern Siberia-Pacific Ocean oil pipeline with a branch to Chinese border, and Russian power grid monopoly UES is building some of its hydropower stations with a view of future exports to China.

The China Council for the Promotion of International Trade (CCPIT) promotes China's international economic and commercial interests. This is accomplished by developing business cooperation and exchanges with foreign countries. It also produces economic data, creates diplomatic ties and is active with trade arbitration issues. Hong Kong remains prominent in domestic trade, notably in its reliance on the mainland for agricultural products.

Foreign investment

In 1979, the government introduced legislation and regulations designed to encourage foreigners to invest in high-priority sectors and regions. A significant example of this is the Encouraged Industry Catalogue which sets out the degree of foreign involvement allowed in various industry sectors.

In 1980, the government eliminated time restrictions on the establishment of joint ventures, provided some assurances against nationalization, and allowed foreign partners to become chairs of joint venture boards. In 1991, China granted more preferential tax treatment for Wholly Foreign Owned Enterprises and contractual ventures and for foreign companies which invest in selected economic zones or in projects encouraged by the state, such as energy, communications and transport. It also authorized some foreign banks to open branches in Shanghai and allowed foreign investors to purchase special "B" shares of stock in selected companies listed on the Shanghai and Shenzhen Securities Exchanges. These "B" shares are sold to foreigners but carry no ownership rights in a company. In 2006, mainland China received $69.47 billion in foreign direct investment.^[49]

Opening to the outside remains central to mainland China's development. Foreign-invested enterprises produce about 45% of mainland China's exports (note though, the majority of mainland China's foreign investment come from Hong Kong, Taiwan and Macau, two of which are under the administration of the PRC), and mainland China continues to attract large investment inflows. Foreign exchange reserves exceeded $800 billion in 2005, more than doubling from 2003 and in November 2006, mainland China became the world's largest holder of reserves which exceeded $1 trillion.

There are nevertheless companies withdrawing from the mainland Chinese market. Warner Bros., for instance, withdrew its cinema business in mainland China as a result of the regulatory restrictions that ban foreign investors from controlling joint ventures in the Chinese mainland. The regulation requires that Chinese mainland investors must own at least 51 percent stake or play a leading role in their joint ventures with foreign investors.^[50]

Energy and mineral resources

Since 1980 China's energy production has grown rapidly (at about half the GDP growth rate), but it has continued to fall considerably short of demand. This is partly because energy prices were long set so low that industries had few incentives to conserve. Demand has also increasingly outstripped supply. In addition, it has often been necessary to transport fuels (notably coal) great distances from points of production to consumption. Coal provides about 75-80 percent of China's energy consumption, although its proportion has been gradually declining. Petroleum production, which grew rapidly from an extremely low base in the early 1960s, has increased much more gradually from 1980. Natural gas production still constitutes only a small (though increasing) fraction of overall energy production, but gas is supplanting coal as a domestic fuel in the major cities.

China's electric-generating capacity has expanded dramatically since 1980, and the proportion allocated to domestic consumption also has grown considerably. Some 80 percent of all power generated is at thermal plants, with about 17 precent at hydroelectric installations; only about 2 percent is from nuclear energy, from plants located in Guangdong and Zhejiang.Cite error: A <ref> tag is missing the closing </ref> (see the help page). the most important of which is coal. China's mineral resources include large reserves of coal and iron ore, plus adequate to abundant supplies of nearly all other industrial minerals. Although coal deposits are widely scattered (some coal is found in every province), most of the total is located in the northern part of the country. The province of Shanxi, in fact, is thought to contain about half of the total; other important coal-bearing provinces include Heilongjiang, Liaoning, Jilin, Hebei, and Shandong.^[51] Apart from these northern provinces, significant quantities of coal are present in Sichuan, and there are some deposits of importance in Guangdong, Guangxi, Yunnan, and Guizhou.^[51] A large part of the country's reserves consists of good bituminous coal, but there are also large deposits of lignite. Anthracite is present in several places (especially Liaoning, Guizhou, and Henan), but overall it is not very significant.^[52]

In order to ensure a more even distribution of coal supplies and to reduce the strain on the less than adequate transportation network, the authorities pressed for the development of a large number of small, locally run mines throughout the country. This campaign was energetically pursued after the 1960s, with the result that thousands of small pits have been established, and they produce more than half the country's coal. This output, however, is typically expensive and is used for local consumption. It has also led to a less than stringent implementation of safety measures in these unregulated mines, which cause several thousands of deaths each year.^[53]

China's onshore oil resources are mostly located in the Northeast and in Xinjiang, Gansu, Qinghai, Sichuan, Shandong, and Henan provinces. Shale oil is found in a number of places, especially at Fushun in Liaoning, where the deposits overlie the coal reserves, as well as in Guangdong. Light oil of high quality has been found in the Pearl River estuary of the South China Sea, the Qaidam Basin in Qinghai, and the Tarim Basin in Xinjiang. The country consumes most of its oil output but does export some crude oil and oil products. China has explored and developed oil deposits in the China Seas, the Yellow Sea, the Gulf of Tonkin, and the Bohai Sea.

The total extent of China's natural gas reserves is unknown, as relatively little exploration for natural gas has been done.^[54] Sichuan accounts for almost half of the known natural gas reserves and production.^[55] Most of the rest of China's natural gas is associated gas produced in the Northeast's major oil fields, especially Daqing oilfield. Other gas deposits have been found in the Qaidam Basin, Hebei, Jiangsu, Shanghai, and Zhejiang, and offshore to the southwest of Hainan Island.^[56]

Iron ore reserves are found in most provinces, including Hainan. Gansu, Guizhou, southern Sichuan, and Guangdong provinces have rich deposits. The largest mined reserves are located north of the Yangtze River and supply neighboring iron and steel enterprises. With the exception of nickel, chromium, and cobalt, China is well supplied with ferroalloys and manganese. Reserves of tungsten are also known to be fairly large. Copper resources are moderate, and high-quality ore is present only in a few deposits. Discoveries have been reported from Ningxia. Lead and zinc are available, and bauxite resources are thought to be plentiful. China's antimony reserves are the largest in the world. Tin resources are plentiful, and there are fairly rich deposits of gold. China is the world’s fifth largest producer of gold and in the early twenty-first century became an important producer and exporter of rare metals needed in high-technology industries. The rare earth reserves at the Bayan Obi mine in Inner Mongolia are thought to be the largest in any single location in the world.

There are important deposits of phosphate rock in a number of areas. Pyrites occur in several places; Liaoning, Hebei, Shandong, and Shanxi have the most important deposits. China also has large resources of fluorite (fluorspar), gypsum, asbestos, and cement. Outdated mining and ore-processing technologies are being replaced with modern techniques, but China’s rapid industrialization requires imports of minerals from abroad. In particular, iron ore imports from Australia and the United States have soared in the early 2000s as steel production rapidly outstripped domestic iron ore production.

China also produces a fairly wide range of nonmetallic minerals. One of the most important of these is salt, which is derived from coastal evaporation sites in Jiangsu, Hebei, Shandong, and Liaoning, as well as from extensive salt fields in Sichuan, Ningxia, and the Qaidam Basin.

The major areas of production in 2004 were coal (nearly 2 billion tons), iron ore (310 million tons), crude petroleum (175 million tons), natural gas (41 million cubic meters), antimony ore (110,000 tons), tin concentrates (110,000 tons), nickel ore (64,000 tons), tungsten concentrates (67,000 tons), unrefined salt (37 million tons), vanadium (40,000 tons), and molybdenum ore (29,000 tons). In order of magnitude, bauxite, gypsum, barite, magnesite, talc and related minerals, manganese ore, fluorspar, and zinc also were important. In addition, China produced 2,450 tons of silver and 215 tons of gold in 2004. The mining sector accounted for less than 0.9% of total employment in 2002 but produced about 5.3% of total industrial production.

China, due in large part to environmental concerns, has wanted to shift China's current energy mix from a heavy reliance on coal, which accounts for 75% of China's energy, toward greater reliance on oil, natural gas, renewable energy, and nuclear power. China has closed some 30,000 coal mines over the past 5 years to cut overproduction. This has reduced coal production by over 25%. Since 1993, China has been a net importer of oil; today imported oil accounts for 20% of the processed crude in China. Net imports are expected to rise to 3.5 million barrels (560,000 m³) per day by 2010. China is interested in developing oil imports from Central Asia and has invested in Kazakhstan oil fields. Beijing is particularly interested in increasing China's natural gas production - currently just 10% of oil production - and is incorporating a natural gas strategy in its tenth 5-year plan (2001-2005), with the goal of expanding gas use from its current 2% share of China's energy production to 4% by 2005 (gas accounts for 25% of U.S. energy production).

Beijing also intends to continue to improve energy efficiency and promote the use of clean coal technology. Only one-fifth of the new coal power plant capacity installed from 1995 to 2000 included desulphurization equipment. Interest in renewable sources of energy is growing, but except for hydropower, their contribution to the overall energy mix is unlikely to rise above 1%-2% in the near future. China's energy section continues to be hampered by difficulties in obtaining funding, including long-term financing, and by market balkanization due to local protectionism that prevents more efficient large plants from achieving economies of scale.

Hydroelectric resources

China has an abundant potential for hydroelectric power production due to its considerable river network and mountainous terrain. Most of the total hydroelectric capacity is situated in the southwest of the country, where coal supplies are poor but demand for energy is rising swiftly. The potential in the northeast is fairly small, but it was there that the first hydroelectric stations were built — by the Japanese during its occupation of Manchuria.^[57] Due to considerable seasonal fluctuations in rainfall, the flow of rivers tends to drop during the winter, forcing many power stations to operate at less than normal capacity, while in the summer, on the other hand, floods often interfere with generation.

Welfare and health care

Demography

Environment

A harmful by-product of China's rapid industrial development has been increased pollution. A 1998 World Health Organization report on air quality in 272 cities worldwide concluded that seven of the 10 most-polluted cities were in China. According to China's own evaluation, two-thirds of the 338 cities for which air-quality data are available are considered polluted - two-thirds of them moderately or severely so. Respiratory and heart diseases related to air pollution are the leading causes of death in China. Almost all of the nation's rivers are considered polluted to some degree, and half of the population lacks access to clean water. Ninety percent of urban water bodies are severely polluted. Water scarcity also is an issue; for example, severe water scarcity in northern China has forced the government to plan a large-scale diversion of water from the Yangtze River to northern cities, including Beijing and Tianjin. Acid rain falls on 30% of the country. Various studies estimate pollution costs the Chinese economy about 7% of GDP each year.

China's communist leaders are increasingly paying attention to the country's severe environmental problems. In March 1998, the State Environmental Protection Administration (SEPA) was officially upgraded to a ministry-level agency, reflecting the growing importance the Chinese government placed on environmental protection. At the beginning of 2007 SEPA announced 82 projects, with a total investment value of over 112 billion yuan, had been found in serious breach of the environmental impact assessment law and regulations on the integration of health and safety measures into project design.^[58]

In recent years, China has strengthened its environmental legislation and made some progress in stemming environmental deterioration. In 1999, China invested more than 1% of GDP in environmental protection, a proportion that will likely increase in coming years. During the 10th 5-Year Plan, China plans to reduce total emissions by 10%. Beijing in particular has invested heavily in pollution control as part of its successful campaign to win the competition to host the 2008 Olympic Games.

China is an active participant in the climate change talks and other multilateral environmental negotiations. It is a signatory to the Basel Convention governing the transport and disposal of hazardous waste and the Montreal Protocol on Substances That Deplete the Ozone Layer, the Kyoto Protocol, as well as the Convention on the International Trade in Endangered Species of Wild Flora and Fauna and other major environmental agreements.

The question of environmental impacts associated with the Three Gorges Dam project has generated controversy among environmentalists inside and outside China. Critics claim that erosion and silting of the Yangtze River threaten several endangered species, while Chinese officials say the hydroelectric power generated by the project will enable the region to lower its dependence on coal, thus lessening air pollution.

The U.S.-China Forum on Environment and Development, co-chaired by the U.S. Vice President and the Premier of the People's Republic of China, has been the principal vehicle of an active program of bilateral environmental cooperation since its inception in 1997. Despite positive reviews of the Forum's achievements from both sides, China has often compared the U.S. program, which lacks a foreign assistance component, with those of Japan and several European Union countries that include generous levels of aid.

References

^ "Chinese economy slows to still sizzling 11.5% growth". usatoday. 2007-10-25. Retrieved 2007-10-30.
^ "China's GDP grows 11.7% in 2006, fastest in 11 years". ChinaDaily. 2007-01-26. Retrieved 2007-03-27.
^ ""China Is a Private-Sector Economy"". BussinessWeek. 2005-08-22. Retrieved 2007-03-27.
^ Fighting Poverty: Findings and Lessons from China’s Success (World Bank). Retrieved August 10, 2006.
^ Chen, Baizhu (Spring 2000). "Determinants of economic growth in China: Private enterprise, education, and openness". China Economic Review. 11 (1). Elsevier Science: 1–15. doi:10.1016/S1043-951X(99)00014-0. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
^ Henley, John (March 1999). "Foreign Direct Investment in China: Recent Trends and Current Policy Issues". The World Economy. 22 (2). Blackwell Synergy: 223–243. doi:10.1111/1467-9701.00201. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
^ "China's energy supply 'dwindling'". BBC News. 20 May, 2004. {{cite web}}: Check date values in: |date= (help)
^ MODERN TRANSPORT PLANNING AND MANAGEMENT AND A PILOT LIGHT RAIL PROJECT Project Scope and Relationship to China's Agenda 21.
^ Harry J. Waters. [China's Economic Development Strategies for the 21st Century] (1997) Quorum/Greenwood. ISBN 1567200958
^ Guo Ke-sha. The Strategic Adjustment of China's Industry Structure in the Next Five Years Institute of Industrial Economics, Chinese Academy of Social Sciences/United Nations Public Administration Network.
^ Hiroshi Satō. Unemployment, Inequality and Poverty in Urban China. (2006) Routledge. ISBN 0415338727
^ Spence, Jonathan D. [1991] (1991). The Search for Modern China. WW Norton & Company publishing. ISBN 0393307808
^ "Official Measures of Industrial Output in Current Prices, China 1952-96" (PDF).
^ Economics, Business, and the Environment — GDP: GDP per capita, current US dollars
^ Deng Xiaoping on "Build Socialism with Chinese characteristics" on June 30, 1984
^ Analysts express optimism about Chinese shares (from Xinhuanet.com, with source from Shanghai Daily)
^ China's National Bureau of Statistics
^ List of socialist countries
^ Starr, John (2001). Understanding China: A Guide to China's Economy, History, and Political Culture. Hill and Wang. ISBN 0809094894.
^ ^a ^b Hsu, Robert C. (October 1, 2007). The political economy of guidance planning in Post-Mao China. Review of World Economics. {{cite book}}: Check date values in: |year= (help)
^ Powell, Simon (1991). Agricultural Reform in China: From Communes to Commodity Economy, 1978-1990. Manchester University Press. ISBN 0719033829.
^ Dong, Xiao-yuan (2006). China's Agricultural Development: Challenges And Prospects. Ashgate Publishing. ISBN 0754646963.
^ http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001
^ http://www.chinability.com/GDP.htm
^ "Consumer Price Index (CPI) Kept Growth in November" National Bureau of Statistics of China 2007-12-11 13:14:55
^ "Chinese Prices Surge Again, Despite New Controls" article by Keith Bradsher in the New York Times November 14, 2007
^ "Inflation Picks Up in China; Trade Gap Grows" article by Keith Bradsher in The New York Times December 11, 2007
^ "Rise in China’s Pork Prices Signals End to Cheap Output" article by Keith Bradsher in the New York Times, June 8, 2007
^ ^a ^b China and India: The Reality Beyond the Hype A Deloitte Research Study. 2006.
^ Yardley, Jim (April 3, 2005). "Help Wanted: China Finds Itself With a Labor Shortage". New York Times. {{cite web}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help); Unknown parameter |url1= ignored (help)
^ Barboza, David (April 3 2006). "Labor Shortage in China May Lead to Trade Shift". New York Times. {{cite web}}: Check date values in: |date= (help)
^ Bradsher, Keith (August 29, 2007). "Wages Rise in China as Businesses Court the Young". New York Times. {{cite web}}: Check date values in: |date= (help)
^ http://www.bls.gov/news.release/ximpim.nr0.htm U.S. Import and Export Price Indexes
^ "Chinese stock market pushes above $1 trillion mark".
^ Xinhua: Chinese mainland stock market to become world's third largest in 10 years
^ [1]
^ Plantation Study in China: Research Outline Forest Conservation Project, Institute for Global Environmental Strategies, Japan; February 2006.
^ ^a ^b Florida Forestry China Trade Mission Report
^ Industrial output growth 1978-2006
^ 14-19: Output of Major Industrial Products
^ ^a ^b Shanghai's GDP Keeps Growing Xinhua News Agency February 1, 2003.
^ Vice-Premier Li Xiannian's speech, published in Hong Kong newspaper Ming Pao on June 14, 1979.
^ "Average Wage of On-Duty Staff and Workers in Urban Areas Jumped in the First Three Quarters" National Bureau of Statistics of China　2007-10-29 15:35:2
^ "China Drafts Law to Boost Unions and End Labor Abuse" New York Times, October 13, 2006
^ "Official Union in China Says All Wal-Marts Are Organized" New York Times October 13, 2006
^ "China's foreign trade to top US$ 1.75 trillion". ChinaDaily. 2007-01-02. Retrieved 2007-03-27.
^ "Germany still the export achiever". CNN. 2005-12-06. Retrieved 2007-03-27.
^ "Trade between China and Russia could exceed $40 bln in 2007". The Voice of Russia. 2007-08-02. {{cite web}}: Check date values in: |date= (help)
^ http://www.iht.com/articles/2007/01/15/business/yuan.php
^ Warner Bros to withdraw from Chinese mainland (Xinhuanet.com, with source from China Radio International)
^ ^a ^b TED Case Studies. China and Coal
^ Heping, Xie (1999). Mining Science and Technology '99. Taylor & Francis. pp. 252–256. ISBN 9058090671. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
^ Creedy, David (February 2006). "Transforming China's coal mines: A case history of the Shuangliu Mine". Natural Resources Forum. 30 (1). Blackwell Publishing: 15–26. doi:10.1111/j.1477-8947.2006.00154.x. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
^ Xinhua. China to calculate oil and gas reserves 2004-11-25.
^ Puguang Named 2nd Largest Gas Field
^ Kaoru YAMAGUCHI, Keii CHO. Natural Gas in China IEEJ: August 2003.
^ Case Study of Electrification: China - Worldwide Electrification from the 1950s to the 1970s. (Chapter 2; page 33).
^ [2]

This image is available from the United States Library of Congress Prints and Photographs Division under the digital ID {{{id}}}
This tag does not indicate the copyright status of the attached work. A normal copyright tag is still required. See Wikipedia:Copyrights for more information.

[3]

External links

National Bureau of Statistics of China
Chinability News and statistics on China's economy and business climate.

Template:Link FA

[1] "Chinese economy slows to still sizzling 11.5% growth". usatoday. 2007-10-25. Retrieved 2007-10-30.

[2] "China's GDP grows 11.7% in 2006, fastest in 11 years". ChinaDaily. 2007-01-26. Retrieved 2007-03-27.

[3] ""China Is a Private-Sector Economy"". BussinessWeek. 2005-08-22. Retrieved 2007-03-27.

[4] Fighting Poverty: Findings and Lessons from China’s Success (World Bank). Retrieved August 10, 2006.

[5] Chen, Baizhu (Spring 2000). "Determinants of economic growth in China: Private enterprise, education, and openness". China Economic Review. 11 (1). Elsevier Science: 1–15. doi:10.1016/S1043-951X(99)00014-0. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

[6] Henley, John (March 1999). "Foreign Direct Investment in China: Recent Trends and Current Policy Issues". The World Economy. 22 (2). Blackwell Synergy: 223–243. doi:10.1111/1467-9701.00201. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

[7] "China's energy supply 'dwindling'". BBC News. 20 May, 2004. {{cite web}}: Check date values in: |date= (help)

[8] MODERN TRANSPORT PLANNING AND MANAGEMENT AND A PILOT LIGHT RAIL PROJECT Project Scope and Relationship to China's Agenda 21.

[9] Harry J. Waters. [China's Economic Development Strategies for the 21st Century] (1997) Quorum/Greenwood. ISBN 1567200958

[10] Guo Ke-sha. The Strategic Adjustment of China's Industry Structure in the Next Five Years Institute of Industrial Economics, Chinese Academy of Social Sciences/United Nations Public Administration Network.

[11] Hiroshi Satō. Unemployment, Inequality and Poverty in Urban China. (2006) Routledge. ISBN 0415338727

[Spence-12] Spence, Jonathan D. [1991] (1991). The Search for Modern China. WW Norton & Company publishing. ISBN 0393307808

[13] "Official Measures of Industrial Output in Current Prices, China 1952-96" (PDF).

[14] Economics, Business, and the Environment — GDP: GDP per capita, current US dollars

[15] Deng Xiaoping on "Build Socialism with Chinese characteristics" on June 30, 1984

[2005_GDP_growth-16] Analysts express optimism about Chinese shares (from Xinhuanet.com, with source from Shanghai Daily)

[17] China's National Bureau of Statistics

[18] List of socialist countries

[19] Starr, John (2001). Understanding China: A Guide to China's Economy, History, and Political Culture. Hill and Wang. ISBN 0809094894.

[TPE2007-20] Hsu, Robert C. (October 1, 2007). The political economy of guidance planning in Post-Mao China. Review of World Economics. {{cite book}}: Check date values in: |year= (help)

[21] Powell, Simon (1991). Agricultural Reform in China: From Communes to Commodity Economy, 1978-1990. Manchester University Press. ISBN 0719033829.

[22] Dong, Xiao-yuan (2006). China's Agricultural Development: Challenges And Prospects. Ashgate Publishing. ISBN 0754646963.

[23] ttp://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001

[24] ttp://www.chinability.com/GDP.htm

[CPI-25] "Consumer Price Index (CPI) Kept Growth in November" National Bureau of Statistics of China 2007-12-11 13:14:55

[inflation-26] "Chinese Prices Surge Again, Despite New Controls" article by Keith Bradsher in the New York Times November 14, 2007

[27] "Inflation Picks Up in China; Trade Gap Grows" article by Keith Bradsher in The New York Times December 11, 2007

[28] "Rise in China’s Pork Prices Signals End to Cheap Output" article by Keith Bradsher in the New York Times, June 8, 2007

[deloitte_china_india_reality_2006-29] China and India: The Reality Beyond the Hype A Deloitte Research Study. 2006.

[30] Yardley, Jim (April 3, 2005). "Help Wanted: China Finds Itself With a Labor Shortage". New York Times. {{cite web}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help); Unknown parameter |url1= ignored (help)

[31] Barboza, David (April 3 2006). "Labor Shortage in China May Lead to Trade Shift". New York Times. {{cite web}}: Check date values in: |date= (help)

[32] Bradsher, Keith (August 29, 2007). "Wages Rise in China as Businesses Court the Young". New York Times. {{cite web}}: Check date values in: |date= (help)

[33] ttp://www.bls.gov/news.release/ximpim.nr0.htm U.S. Import and Export Price Indexes

[34] "Chinese stock market pushes above $1 trillion mark".

[35] Xinhua: Chinese mainland stock market to become world's third largest in 10 years

[36] [1]

[37] Plantation Study in China: Research Outline Forest Conservation Project, Institute for Global Environmental Strategies, Japan; February 2006.

[FFCTMR-38] Florida Forestry China Trade Mission Report

[39] Industrial output growth 1978-2006

[40] 14-19: Output of Major Industrial Products

[SHGDPKG-41] Shanghai's GDP Keeps Growing Xinhua News Agency February 1, 2003.

[42] Vice-Premier Li Xiannian's speech, published in Hong Kong newspaper Ming Pao on June 14, 1979.

[43] "Average Wage of On-Duty Staff and Workers in Urban Areas Jumped in the First Three Quarters" National Bureau of Statistics of China　2007-10-29 15:35:2

[44] "China Drafts Law to Boost Unions and End Labor Abuse" New York Times, October 13, 2006

[45] "Official Union in China Says All Wal-Marts Are Organized" New York Times October 13, 2006

[46] "China's foreign trade to top US$ 1.75 trillion". ChinaDaily. 2007-01-02. Retrieved 2007-03-27.

[47] "Germany still the export achiever". CNN. 2005-12-06. Retrieved 2007-03-27.

[48] "Trade between China and Russia could exceed $40 bln in 2007". The Voice of Russia. 2007-08-02. {{cite web}}: Check date values in: |date= (help)

[49] ttp://www.iht.com/articles/2007/01/15/business/yuan.php

[50] Warner Bros to withdraw from Chinese mainland (Xinhuanet.com, with source from China Radio International)

[TED_China_and_Coal-51] TED Case Studies. China and Coal

[52] Heping, Xie (1999). Mining Science and Technology '99. Taylor & Francis. pp. 252–256. ISBN 9058090671. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

[53] Creedy, David (February 2006). "Transforming China's coal mines: A case history of the Shuangliu Mine". Natural Resources Forum. 30 (1). Blackwell Publishing: 15–26. doi:10.1111/j.1477-8947.2006.00154.x. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

[54] Xinhua. China to calculate oil and gas reserves 2004-11-25.

[55] Puguang Named 2nd Largest Gas Field

[56] Kaoru YAMAGUCHI, Keii CHO. Natural Gas in China IEEJ: August 2003.

[57] Case Study of Electrification: China - Worldwide Electrification from the 1950s to the 1970s. (Chapter 2; page 33).

[58] [2]

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[31]

[32]

[33]

[34]

[35]

[36]

[37]

[38]

[39]

[40]

[41]

[42]

[43]

[44]

[45]

[46]

[47]

[48]

[49]

[50]

[51]

[52]

[53]

[54]

[55]

[56]

[57]

[58]

@@ Line 314: / Line 314: @@
 }}
 {{seealso|Energy policy of China}}
+Since 1980 China's energy production has grown rapidly (at about half the GDP growth rate), but it has continued to fall considerably short of demand. This is partly because energy prices were long set so low that industries had few incentives to conserve. Demand has also increasingly outstripped supply. In addition, it has often been necessary to transport [[fuel]]s (notably [[coal]]) great distances from points of production to consumption. Coal provides about 75-80 percent of China's energy consumption, although its proportion has been gradually declining. [[Petroleum]] production, which grew rapidly from an extremely low base in the early 1960s, has increased much more gradually from 1980. [[Natural gas]] production still constitutes only a small (though increasing) fraction of overall energy production, but gas is supplanting coal as a domestic fuel in the major cities.
-Over the past decade China has managed to keep its [[energy]] growth rate at just half the rate of GDP growth, a considerable achievement. Although energy consumption slumped in absolute terms and economic growth slowed during 1998, mainland China's total energy consumption may double by 2020 according to some projections. China is expected to add approximately 15,000 [[megawatt]]s of generating capacity a year, with 20% of that coming from foreign suppliers. Though China has rich overall energy potential, most have yet to be developed. In addition, the geographical distribution of energy puts most of these resources relatively far from their major industrial users. Basically the northeast is rich in [[coal]] and [[oil]], the central part of north China has abundant coal, and the southwest has immense [[hydroelectric potential]]. But the industrialized regions around [[Guangzhou]] and the [[Yangtze River|Lower Yangtze]] region around Shanghai have too little energy, while there is very little heavy industry located near major energy resource areas other than in the southern part of the northeast.
+China's [[electric-generating]] capacity has expanded dramatically since 1980, and the proportion allocated to domestic consumption also has grown considerably. Some 80 percent of all power generated is at thermal plants, with about 17 precent at [[hydroelectric]] installations; only about 2 percent is from [[nuclear energy]], from plants located in [[Guangdong]] and [[Zhejiang]].<ref>[[World Nuclear Association]]. [http://www.world-nuclear.org/info/inf63.html Nuclear Power in China] (November 2007)<\ref> China's total energy consumption may double by 2020 according to some projections. China is expected to add approximately 15,000 [[megawatt]]s of generating capacity a year, with 20% of that coming from foreign suppliers. Though China has rich overall energy potential, most have yet to be developed. In addition, the geographical distribution of energy puts most of these resources relatively far from their major industrial users. Basically the northeast is rich in [[coal]] and [[oil]], the central part of north China has abundant coal, and the southwest has immense [[hydroelectric potential]]. But the industrialized regions around [[Guangzhou]] and the [[Yangtze River|Lower Yangtze]] region around Shanghai have too little energy, while there is very little heavy industry located near major energy resource areas other than in the southern part of the northeast.
 China is well endowed with mineral resources,<ref>[[MSN Encarta]]. [http://encarta.msn.com/encyclopedia_761574726_3/Asia.html Asia: Mineral Resources]</ref> the most important of which is [[coal]]. China's mineral resources include large reserves of [[coal]] and [[iron ore]], plus adequate to abundant supplies of nearly all other industrial [[minerals]]. Although coal deposits are widely scattered (some coal is found in every province), most of the total is located in the northern part of the country. The province of [[Shanxi]], in fact, is thought to contain about half of the total; other important coal-bearing provinces include [[Heilongjiang]], [[Liaoning]], [[Jilin]], [[Hebei]], and [[Shandong]].<ref name="TED China and Coal">TED Case Studies. [http://www.american.edu/TED/chincoal.htm China and Coal]</ref> Apart from these northern provinces, significant quantities of coal are present in [[Sichuan]], and there are some deposits of importance in [[Guangdong]], [[Guangxi]], [[Yunnan]], and [[Guizhou]].<ref name="TED China and Coal"/> A large part of the country's reserves consists of good [[bituminous coal]], but there are also large deposits of [[lignite]]. [[Anthracite]] is present in several places (especially [[Liaoning]], [[Guizhou]], and [[Henan]]), but overall it is not very significant.<ref>{{cite book | last =Heping | first =Xie | coauthors =Tad S. Golosinski | title =Mining Science and Technology '99 | publisher =Taylor & Francis | date =1999 | pages =252-256 | isbn = 9058090671}}</ref>

v t e Economy of China
Companies of China
History	History Reform Five-year plans Industrial Revolution Iron rice bowl Three-anti and Five-anti Campaigns Great Leap Forward Four Modernizations Socialist market economy Deng Xiaoping's southern tour "Grasping the large, letting go of the small" Scientific Outlook on Development Historical GDP Population history 1949–1976 wage reform
Industries	Industry history Advanced materials Aquaculture Automotive Aviation Aircraft Aerospace Beer Biotechnology Business process outsourcing Cement Coffee Container Cotton Electric motor Electric power Electronics Film Fishing Gambling Hedge fund Internet Media Mining gold mining Mobile phone Online gaming Pearl farming Pharmaceuticals and pharmacy Publishing and academic publishing Radio Railway equipment industry Rare earth Real estate Renewable energy Securities Sex toys Shipping Silk Software Steel Telecommunications Television digital Tourism Textiles Video gaming Wine
Development Zones	Dalian Software Park Megalopolises in China Special Economic Zones Suzhou Industrial Park Zhangjiang Hi-Tech Park
Energy	Energy policy Coal Oil Oil shale Oil refineries Nuclear Renewable Wind Solar Geothermal
Trade and infrastructure	Trade history World Trade Center Transport Communications Postal history Tourism Shipping Illegal drug trade Hong Kong Trade Development Council Ports Water supply and sanitation Exports Trading partners
Law and regulations	Tax system Labor contract law Labor relations Food safety Intellectual property
Finance and banking	Accounting Banking History Central bank Other banks Beijing Financial Street Financial system China Banknote Printing and Minting Corporation China Government Guidance Fund China-Africa Development Fund China Integrated Circuit Industry Investment Fund China Internet Investment Fund China Reform Holdings Corporation National Fund for Technology Transfer and Commercialisation China Investment Corporation CITIC Group Financial services Renminbi Foreign exchange reserve Hedge fund industry Stock Exchanges Dalian Commodity Exchange National Equities Exchange and Quotations Beijing Stock Exchange Shanghai Stock Exchange SSE Composite Index Shanghai Metal Exchange Stock Exchange Executive Council Shenzhen Stock Exchange SZSE Component Index Zhengzhou Commodity Exchange
Government institutions	All-China Federation of Industry and Commerce All-China Federation of Trade Unions China Council for the Promotion of International Trade China Securities Regulatory Commission General Administration of Customs Ministry of Commerce Ministry of Finance Ministry of Industry and Information Technology National Financial Regulatory Administration National Bureau of Statistics of China National Development and Reform Commission National Energy Commission State-owned Assets Supervision and Administration Commission State Administration for Market Regulation State Administration of Foreign Exchange State Administration of Taxation
Development	International rankings Social welfare Poverty Corruption Income inequality Standard of living Foreign aid Urbanization Internal migration Emigration Rural credit cooperative
National economic initiatives	Beijing Consensus Belt and Road Initiative Common prosperity Dual circulation Go Out policy Made in China 2025 Youth Business China
Regional economic initiatives	Asian Infrastructure Investment Bank Beibu Gulf Economic Rim Bohai Economic Rim China Western Development Guangdong–Hong Kong–Macau Greater Bay Area Mainland and Hong Kong Closer Economic Partnership Arrangement Mainland and Macau Closer Economic Partnership Arrangement Northeast China Revitalization Pearl River Delta Economic Zone Regional Comprehensive Economic Partnership Rise of Central China Plan Western Taiwan Straits Economic Zone Yangtze River Delta Economic Zone Zhongyuan Economic Zone
Events	2005–2011 property bubble 2007 export / pet food recalls 2007 stock bubble 2007 slave scandal 2008–2009 economic stimulus plan 2010 Expo 2015–16 stock market turbulence Protein export contamination China–United States trade war 2020–2021 reform spree
Related topics	Agriculture Bankruptcy Companies Largest Top 500 Largest SOEs The Hongs Demographics Globalization Globalization and women National Standards China Compulsory Certificate Made in China Mingong List of Chinese by net worth Chinese economists Science and technology
See also: Category Outline of China Economy of East Asia

v t e Asia-Pacific Economic Cooperation (APEC)
Nations	Australia Brunei Canada Chile China Hong Kong¹ Indonesia Japan South Korea Malaysia Mexico New Zealand Papua New Guinea Peru Philippines Russia Singapore Taiwan Thailand United States Vietnam
Summits	1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Other	APEC Business Travel Card APEC blue APEC Climate Center APEC Sculpture Garden APEC Youth Science Festival
1. A special administrative region of China, participates as "Hong Kong, China"

v t e Economy of Asia
Sovereign states	Afghanistan Armenia Azerbaijan Bahrain Bangladesh Bhutan Brunei Cambodia China Cyprus East Timor (Timor-Leste) Egypt Georgia India Indonesia Iran Iraq Israel Japan Jordan Kazakhstan North Korea South Korea Kuwait Kyrgyzstan Laos Lebanon Malaysia Maldives Mongolia Myanmar Nepal Oman Pakistan Philippines Qatar Russia Saudi Arabia Singapore Sri Lanka Syria Tajikistan Thailand Turkey Turkmenistan United Arab Emirates Uzbekistan Vietnam Yemen
States with limited recognition	Abkhazia Northern Cyprus Palestine South Ossetia Taiwan
Dependencies and other territories	British Indian Ocean Territory Christmas Island Cocos (Keeling) Islands Hong Kong Macau
Category Asia portal