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    China Index 2006

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    China Economy - 2006

      Economy - overview:
      China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion. The process continues with key moves in 2005 including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2005 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income and 150 million Chinese fall below international poverty lines. Economic development has generally been more rapid in coastal provinces than in the interior, and there are large disparities in per capita income between regions. The government has struggled to: (a) sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) contain environmental damage and social strife related to the economy's rapid transformation. From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north. China continues to lose arable land because of erosion and economic development. China has benefited from a huge expansion in computer Internet use, with more than 100 million users at the end of 2005. Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Reports of shortages of electric power in the summer of 2005 in southern China receded by September-October and did not have a substantial impact on China's economy. More power generating capacity is scheduled to come on line in 2006 as large scale investments are completed. The Central Committee of the Chinese Communist Party in October 2005 approved the draft 11th Five-Year Plan and the National People's Congress is expected to give final approval in March 2006. The plan calls for a 20% reduction in energy consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan states that conserving resources and protecting the environment are basic goals, but it lacks details on the policies and reforms necessary to achieve these goals.

      GDP (purchasing power parity):
      $8.182 trillion (2005 est.)

      GDP (official exchange rate):
      $1.79 trillion (2005 est.)

      GDP - real growth rate:
      9.3% (official data) (2005 est.)

      GDP - per capita (PPP):
      $6,300 (2005 est.)

      GDP - composition by sector:
      agriculture: 14.4%
      industry: 53.1%
      services: 32.5%
      note: industry includes construction (2005 est.)

      Labor force:
      791.4 million (2005 est.)

      Labor force - by occupation:
      agriculture: 49%
      industry: 22%
      services: 29% (2003 est.)

      Unemployment rate:
      4.2% official registered unemployment in urban areas in 2004; substantial unemployment and underemployment in rural areas; an official Chinese journal estimated overall unemployment (including rural areas) for 2003 at 20% (2004)

      Population below poverty line:
      10% (2001 est.)

      Household income or consumption by percentage share:
      lowest 10%: 2.4%
      highest 10%: 30.4% (1998)

      Distribution of family income - Gini index:
      44 (2002)

      Inflation rate (consumer prices):
      1.9% (2005 est.)

      Investment (gross fixed):
      43.6% of GDP (2005 est.)

      revenues: $392.1 billion
      expenditures: $424.3 billion; including capital expenditures of $NA (2005 est.)

      Public debt:
      28.8% of GDP (2005 est.)

      Agriculture - products:
      rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish

      mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites

      Industrial production growth rate:
      27.7% (2005 est.)

      Electricity - production:
      2.19 trillion kWh (2004)

      Electricity - consumption:
      2.17 trillion kWh (2004)

      Electricity - exports:
      10.6 billion kWh (2003)

      Electricity - imports:
      1.546 billion kWh (2003)

      Oil - production:
      3.504 million bbl/day (2004)

      Oil - consumption:
      6.391 million bbl/day (2004)

      Oil - exports:
      340,300 bbl/day (2004)

      Oil - imports:
      3.226 million bbl/day (2004)

      Oil - proved reserves:
      18.26 billion bbl (2004)

      Natural gas - production:
      35.02 billion cu m (2003)

      Natural gas - consumption:
      33.44 billion cu m (2003 est.)

      Natural gas - exports:
      2.79 billion cu m (2004)

      Natural gas - imports:
      0 cu m (2004)

      Natural gas - proved reserves:
      2.53 trillion cu m (2004)

      Current account balance:
      $129.1 billion (2005 est.)

      $752.2 billion f.o.b. (2005 est.)

      Exports - commodities:
      machinery and equipment, plastics, optical and medical equipment, iron and steel

      Exports - partners:
      US 21.1%, Hong Kong 17%, Japan 12.4%, South Korea 4.7%, Germany 4% (2004)

      $631.8 billion f.o.b. (2005 est.)

      Imports - commodities:
      machinery and equipment, oil and mineral fuels, plastics, optical and medical equipment, organic chemicals, iron and steel

      Imports - partners:
      Japan 16.8%, Taiwan 11.4%, South Korea 11.1%, US 8%, Germany 5.4% (2004)

      Reserves of foreign exchange and gold:
      $795.1 billion (2005 est.)

      Debt - external:
      $242 billion (2005 est.)

      Economic aid - recipient:

      Currency (code):
      yuan (CNY); note - also referred to as the Renminbi (RMB)

      Exchange rates:
      yuan per US dollar - 8.1943 (2005), 8.2768 (2004), 8.277 (2003), 8.277 (2002), 8.2771 (2001)

      Fiscal year:
      calendar year

      NOTE: The information regarding China on this page is re-published from the 2006 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of China Economy 2006 information contained here. All suggestions for corrections of any errors about China Economy 2006 should be addressed to the CIA.

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    Revised 06-Jun-06
    Copyright © 2006 Photius Coutsoukis (all rights reserved)