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China China

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China – Quick View
ECR score63.55 (Mar 2011)
ECR rank40 (Mar 2011)
Economic
GDP at current prices 2010 eUSD 5,746.07 billion
GNI 2010USD 7,258
FDI inflow 2009USD 70.87 billion
Inflation 20103.52%
Central Bank Assets 2010USD 38,253.42 million
Unemployment rate 20104.1%
Government deficit 2010USD 166.11 billion
Tax revenue 2010USD 1.14 trillion
Political
Government typeSocialist Republic
Recent political crisisNA
Economic freedom score135th
Freedom of information score171st
Corruption perception index 201078th
Structural
Crude Birth rate 200914 (per '000)
Population balance 2009Women over 60 – 12.6%
Population balance 2009Men over 60 - 11.2%
Population balance 2009Under 14 - 20.2%
Life expectancy years 201073.5 years
Under-5 Mortality rate 200821 per '000
Literacy rate 201094.2%
Internet access 201031.6%

[Top] Economic Overview

Chinese economy was based on centrally planned economy with non exist private businesses and companies existed. After economic reforms, China has increased the levels of privatization to increase productivity. Chinese economy is now the world’s fastest growing economy and has the world’s second largest nominal GDP.

 

(Source: Heritage.org, uschina.org)

 

Gross domestic product (GDP)                                           

                                             China GDP current prices

(Sources: The World Bank database, self-illustration)

China’s GDP experienced a steady increase from 2007 to 2011. In 2011, the GDP was estimated to reach USD 7.318.5 billion.

GDP growth rate

China GDP growth rate

(Sources: The World Bank database, self-illustration)

In 2007, GDP growth rate of the country was registered at 14.2%. The rate decreased till 2009 at 9,2%, but in 2010, it recovered to 10.4%. The growth rate in 2011 is recorded at 9.3%.

 

Gross national income (GNI) at purchasing power parity (PPP)

                                                      China GNI at PPP

(Sources: The World Bank database, self-illustration)

China’s GNI registered steady rise from 2007 to 2011. In 2011, GNI per capita, PPP is recorded at USD 8,450.

Inflation

 

                                         China Inflation

(Sources: The World Bank database, self-illustration)

China’s inflation rate kept its level from 2007 to 2011 at around 5% (consumer prices) or 7% (GDP deflator) except in 2009, when it dropped to below 0. In 2011, inflation was recorded at 5.4% (consumer prices) or 7.8% (GDP deflator).

Tax Rate

China has a progressive individual income tax system varying from 5% to 45%

Personal Income Tax

Income Range (CNY)

Tax Rate (%)

0-500

5%

501-2,000

10%

2,001-5,000

15%

5,001-20,000

20%

20,001-40,000

25%

40,001-60,000

30%

60,001-80,000

35%

80,001-100,000

40%

Above CNY 100,000

45%

 

(Source: Tax Rates)

Corporate tax

The corporate income tax is 25%. The VAT rate in the country is 17%.

(Source: Tax Rates)

Foreign direct investment (FDI)

In 2011 (from Jan. to Dec.), the major countries investing in China were:

 

Country

Investment

Hong Kong

USD 77.011 billion

Taiwan

USD 6.727 billion

Japan

USD 6.348 billion

Singapore

USD 6.328 billion

USA

USD 2.995 billion

Korea

USD 2.551 billion

UK

USD 1.610 billion

Germany

USD 1.136 billion

France

USD 0.802 billion

Netherlands

USD 0.767 billion

(Source: Ministry of Commerce)

 

In 2011 from Jan. to Dec., the number of newly approved foreign-funded enterprises in China totaled 27,712, up by 1.12% year on year; and actually used foreign investment reached USD 116.011 billion, up by 9.72% year on year.

The inflow from the above countries accounted for 91.6% of the total foreign capital.

 

Country

Investment

Hong Kong

USD 52.084 billion

Japan

USD 5.621 billion

Singapore

USD 5.242 billion

Taiwan

USD 4.802 billion

USA

USD 2.371 billion

Korea

USD 2.179 billion

Germany

USD 1.192 billion

Netherlands

USD 0.905 billion

Switzerland

USD 0.804 billion

UK

USD 0.745 billion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

(Source: Ministry of Commerce)

 

In 2012 from Jan. to Sept., newly Approved Foreign-invested Enterprises amounted to 18,025, down by 11.67% year on year; and the actual use of foreign investment reached USD 83.423 billion, down by 3.76% year on year.. 

 

Central bank assets                                             

China Central bank assets

(Source: Central Bank)

 

The ‘People’s Bank of China’ is the regulatory authority of the country’s banking sector. By the end of September, 2012, the total assets were registered at CNY 28,965.78 billion.

[Top] Financial Indicators & Government Financial

Consumer price index (CPI)

                                                     China CPI

(Source: The World Bank database, self-illustration)

The CPI in China maintained its increasement from 2007 to 2011. In 2011, the CPI was recorded to be about 121.7, setting 2005's level as 100.

Interest rates on saving deposits / time deposits (2010)

 

% per annum

 

Saving

3 month

6 month

1 year

3 year

5 year

RMB

0.40

2.60

2.80

3.00

1.6

1.7

HKD

0.05

0.15

0.35

0.65

NA

NA

(Source: Standard Chartered Bank)

The interest rates on savings deposits was recorded at (RMB) 0.40% and (HKD) 0.05% in 2010.

Money Supply

                                China Money supply

(Source: Central Bank)

In the past one year from Oct. 2011 to Sept. 2012, China’s money supply was relatively stable. M2 and quasi money experienced marginal rise. At the end of Sept. 2012, M0 was CNY 5,343.349 billion, M1 was CNY 28,678.82 billion and M2 was CNY 94,368.88 billion.

Official exchange rate

                                    China Exchange rate

(Source: Central Bank)

The exchange rate between CNY and USD experienced a decline in the first half of the past one year and dropped even across the 6.3 line in April 2012. It has recovered gradually to the former level since then. By the end of Sept. 2012, the exchange value of USD/CNY was recorded as 6.34.

Government finances

Fiscal balance                                

                                                China Fiscal balance

(Source: imf.org)

From 2007 to 2011, China’s fiscal balance dropped from positive to negative side and reached its bottom in 2010. In 2011, the balance recovered a little bit and was recorded a deficit of CNY 850.19 billion.

Total Revenue

                                                  China Total revenue

(Source: The World Bank database, self-illustration)

The Chinese government’s total revenue increased steadily from CNY 5,262.18 billion in 2007 to CNY 8,735.01 billion in 2011.

Tax revenue

 

Tax revenues in China increased by 22.6% in 2010, amounting to CNY 7.74 trillion. This revenue was comprised of tax refunds worth CNY 732.8 billion.  

 

Valued-added, consumption and sales taxes increased 14.8%, 27.5% and 23.8% from the previous year respectively. Income taxes increased by 20.4% over 2009. 

 

Imported tariffs amounted to CNY 1.05 trillion, with a consistent rise 35.9% per year.

 

(Source: China Economic)

 

Total grants                                                              

                                                           China Total grants

(Source: The World Bank database, self-illustration)

Total grants increased from 2005 to 2007 and then declined till 2009. In 2007, total grants were recorded at its peak of CNY 1,913.93 billion.

Current account balance  China Current account balance

 (Sources: The World Bank database, self-illustration)

China’s current account balance increased steadily until 2008. Since then it has dropped gradually to USD 201.71 billion in 2011.

Balance of Payments

China External balance on goods and services(Source: The World Bank database, self-illustration)

China’s external balance of goods and services had been quite fluctuate from 2007 to 2011. In 2009, the balance of payments reached its bottom within this period amounting to USD 220.10 billion and gradually recovered back to 297.80 billion in 2011.

[Top] Labour Force and Employment Overview

China is one of the most populated countries in the world.  It constitutes a large number of the world labour force. Indeed, the labour market is one of the most essential components of economic transition in China.

 

(Source: un.org) 

 

Unemployment rate

                                                China Unemployment rate

(Source: imf.org) 

 

From 2005 to 2008, China’s unemployment rate experienced a decline from 4.2% to 4%. In 2010, unemployment was estimated to reach 4.1%.

 

 

The labour force participation rate for females in the year 2008 was 69.3% while for males the rate was 78.2%. 

 

(Source: un.org) 


Minimum wage

 

In March 2010, officials in China’s Jiangsu province announced a minimum wage hike of 13% from RMB 850 (approximately USD 124.51) to RMB 960 (approximately USD 140.62) per month.

 

The labour unions and labourers have cited rising inflation and cost of living to justify their demand for the hike in wages.  

 

(Source: Pacific Bridge Medical) 

 

Level of Unionisation

Unions in China have been weak or virtually non-existent in the past. However, with the growing economic activity, their has begun a recent establishment of labour unions. 

 

In 2008, State-run All-China Federation of Trade Unions (ACFTU) announced plans to unionise foreign-invested enterprises. Additionally, ACTFU union leaders are involved in drafting a series of laws to empower unions.

 

ACFTU is the only trade union authorized by the government. The union comprises of provincial and industry federations as well as individual companies.

 

Unions in China are not very effective or powerful as compared to unions in any other part of the world.

(Source: International Journal of Employment Relations)

[Top] Political Stability

The government in China is based on a single party, socialist, republican framework. The People’s Republic of China was founded in 1949, after the Communist Party defeated the previously dominant nationalist Kuomintang, in a civil war.

 

The Communist party of China (CPC) dominates the Chinese Government. However, during a period of relative liberalization, the influence of people and organizations outside the party increased, allowing for the establishment of a market economy. With this market economy now in place, the CPC has limited, or no power, on the economic institutes. 

 

The Communist Party include:

  •           The Central Discipline Inspection Commission
  •           The Central Military Commission
  •           The Politburo (includes members from Politburo Standing Committee)
  •           The Politburo Standing Committee
  •           The Secretariat, headed by the General Secretary

(Source: Government of China)

 

Regulatory Environment

                                        China Economic freedom indices

(Source: Heritage.org)

China stands 135th on the 2011 Economic Freedom Index with a score of 52. The country is ranked 29th amongst 41 countries of the Asian-Pacific Africa region.

(Source: Heritage.org)

Freedom of information

In 2010, China was ranked 171st on the Press Freedom Index. This index gives countries a scoreranging from zero, implying most freedom, to about 105. China scores 84.67 points on this index indicating very high regulations on the media.

 

(Source: rsf.org)

 

Corruption

 

The Corruption Perceptions Index (CPI) is a survey that measures the perceived level of corruption across countries worldwide. China is ranked 78th out of 178 countries in the 2010 index, indicating that it is perceived as highly corrupt.

(Sources: Transparency.org)

Judicial System

The judicial system of the PRC, as established in Articles 123-135 of the constitution, consists of:

  •            People’s Courts
  •           The Supreme People’s Court
  •           The People’s Procuratorates
  •           The Supreme People’s Procuratorate, 
  •            Military Procuratorates
  •            Other Special People’s Procuratorates

The Supreme People's Procuratorate, accountable to the NPC and its Standing Committee, is the highest prosecutorial agency in China, exercising and supervising at all state and local levels.

 

The hierarchy of the court structure is:

  •           The Supreme People’s Courts
  •           The Higher People’s Courts 
  •           The Intermediate People’s Courts 
  •            The Basic People’s Courts

The Basic People’s Courts comprises of more than 3,000 courts,which function at a county level, which are further subdivided into about 20,000 smaller units referred to as people’s tribunals, that are located in towns and villages. 

 

There are approximately 376 Intermediate People’s Courts and 31 Higher People’s Courts in the provinces.

 

(Source: Law Info China)

[Top] Demographic Overview

Population

                                                China Population

(Source: imf.org)

China’s population showed a steady rise from 2005 to 2009. In 2010, the population was estimated to be 1,341.41 million. 

In 2009, the population below 14 years of age constituted 20.2%. Men above 60 years of age made up 11.2%. Women constituted 12.6%.

(Source: un.org)

47% of China’s population is classified as urban.

(Source: undp, page: 181) 

The country’s gender ratio was recorded at 121.2 (men per 100 women) in 2010.

(Source: undp, page: 181) 

In 2010, the average life expectancy in China was 73.5 years and median age was about 34.2 years.

(Source: undp, page: 181) 

In 2008, the under-5 mortality rate (per '000 live births) was registered at 21.

(Source: undp)

In 2009, the crude birth rate was registered at 14 (per '000).   

(Source: unicef.org)

Human Development Index

The country is ranked 89th on United Nation’s Human Development Index. It falls in the category of ‘Medium Human Development’. HDI integrates a country’s life expectancy, schooling and income. This signifies the overall social and economic development of a nation.

(Source: undp, page: 140)

[Top] Soft Infrastructure

Education

China has a major expansion plan for education. The state funds for education have been increasing annualy. For 2009, the government expenditure of education was about 56.76 billion Yuan. There has been a sharp increase in the enrollment of children for the undergraduate and graduate programs.

 

In 2010, the country’s literacy rate was 94.2%.

 

 

(Source: Ministry of Education, undp)

 

Health

The ‘Ministry of Public Health’ (MOPH) is the governing body of China’s health sector. It conducts health sector research, formulates policies and implements measures for improvement of healthcare services. MOPH is also responsible for the functioning of 11 medical colleges, which include 3 teaching hospitals.

Manufacturing and distribution of pharmaceutical products is supervised by the ‘State Pharmaceutical Administration’ (SPA). Hospitals at the local and county levels are operated by Local Public Health Bureaus.   

(Sources: Pacific Bridge Medical)

[Top] Hard Infrastructure

Road

In 2005, China’s total road length was measured at 1.9 million km.

(Source: GRSP Road Safety)

 

Railway

China’s total rail network in 2009 was recorded at 90,000 km. High Speed Rail (HSR) accounted for 6,500 km of the total length. In 2009, 30,000 km of HSR lines were under construction.

Road Classification (2005)

Road Type

Road Length (km)

Expressway

over 41,000

Class I highway

over 38,000

Class II highway

over 246,000

Class III highway

over 344,000

Class IV highway

over 920,000

unclassified roads

over 338,000

 

(Source: GRSP Road Safety)

 

In 2005, expressways made up 16.9% of the total network, while roads below Class III covered 83.1%.

Ports

There are about 2000 ports in China. Shanghai, Shenzhen, Qingdao, Tianjin, Guangzhou, Xiamen, Ningbo and Dalian are some of the biggest and the busiest ones. 

(Source: World Port Source,Government of China)

 

Airports

In total there are 41 airports in China:

Town

Airport name

Runway length (ft.)

Beijing

Beijing Capital

12,400

Changchun

Dafangshen

8,500

Changsha

Huanghua

8,500

Chengdu

Shuangliu

11,800

Chongqing

Jiangbei

9,100

Dalian

Zhoushuizi

10,800

Fuzhou

Changle

11,800

Guangzhou

Baiyun

11,000

Guilin

Liangjiang

9,100

Haikou

Meilan

11,800

Hailar

Dongshan

8,500

Hangzhou

Jianqiao

10,400

Harbin

Taiping

10,400

Hefei

Luogang

9,800

Hohhot

Baita

9,500

Hong Kong

Hong Kong Intl

12,400

Hong Kong

Sek Kong

4,100

Hotan

Hotan

9,100

Jinan

Yaoqiang

8,500

Kashi

Kashi

10,400

Kunming

Wujiaba

11,100

Lanzhou

Zhongchuan

11,800

Nanjing

Lukou

11,800

Nanning

Wuxu

8,800

Ningbo

Lishe

8,200

Qingdao

Liuting

8,500

Sanya

Fenghuang

11,100

Shanghai

Hongqiao

11,100

Shanghai

Pudong

13,100

Shenyang

Taoxian

10,400

Shenzhen

Huangtian

11,100

Shijiazhuang

Zhengding

11,100

Taiyuan

Wusu

10,400

Tianjin

Binhai

10,400

Urumqi

Diwopu

11,800

Wuhan

Tianhe

11,100

Xi'an

Xianyang

9,800

Xiamen

Gaoqi

8,800

Xichang

Qingshan

11,800

Yantai

Laishan

8,500

Zhengzhou

Xinzheng

11,100

 

(Source: Aircraft Charter World)

 

Telecommunications networks

 

Fixed telephone lines

                                           China Fixed Telephone Lines

(Source: itu.int)

In 2009, the numbers of fixed telephone line users in China was recorded at 313.73 million.

Mobile cellular subscriptions

                                          China Mobile cellular subscription

(Source: itu.int)

In 2009, the number of mobile cellular subscription users in china was recorded at 747.21 million.

China’s major cellular service providers include China Mobile, China Unicom and China Telecom. Chinese government issued 3G licences in 2008, this enabled better internet connectivity.

In 2010, 420 million people, i.e. 31.6% of the total population, used internet services. In 2009, 28.7% of the population, which is about 384 million people, used internet.

 

(Source: Internet World Stats)

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