Chinese Economy

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Chinese Economy

  1. 1. Chinese EconomyIssues & Challenges<br />Presented By:<br />AmrinKaur<br />AnishGarg<br />Apoorva Sharma<br />RachitSinghal<br />Sagar Shah Chawla<br />
  2. 2. Background<br />GDP per capita<br />$4,283 (nominal: 95th; 2010)<br />$7,518 (PPP: 93rd; 2010)<br />GDP by sector<br />industry (46.8%), <br />services (43.6%),<br />agriculture (9.6%) (2010 est.)<br />Government Type: Communist State<br />Population: 1.32 billion<br />Currency:Renminbi(RMB); Unit: Yuan (CNY)<br />GDP<br />$5.88 trillion (nominal: 3rd; 2010)<br />$10.09 trillion (PPP: 2nd; 2010)<br />GDP growth<br />10.3% (2010)<br />9.7%(1st qtr of 2011)<br />
  3. 3. Major Challenges<br />Economic Challenges<br />Socio-Political Challenges<br />Inflation<br />Export based economy<br />Gross capital formation<br />US Treasury bills<br />Banking sector<br />Undervalued currency<br />Demographics<br />Political factors<br />Inequality of wealth<br />Legal system<br />Imitation products<br />Linguistic challenges<br />
  4. 4. Economic Challenges<br />Big story: Manufacturing<br />Exports constitute 39.7% of GDP<br />World-wide financial crisis<br />Strict product quality regulations<br />Reduced private consumption expenditure trend<br />Export Based Economy<br />
  5. 5. Economic Challenges<br />
  6. 6. Economic Challenges<br />Undervalued Currency<br />To gain a competitive advantage over other countries in export<br />
  7. 7. Economic Challenges<br />Inflation<br />Inflation rate in China was last reported at 6.2 percent in August of 2011<br />
  8. 8. Economic Challenges<br />
  9. 9. Click anywhere on the image to see this video<br />
  10. 10. Economic Challenges<br />Banking Sector<br />“Shadow” banking system<br />Fudging Statistics<br />Increased pressure on Government and companies<br />
  11. 11. Click anywhere on the image to see this video<br />
  12. 12. Economic Challenges<br />U.S Treasury Bills<br />Holds 36% of all U.S treasury bills<br />Amounts to 16% of U.S public debt<br />Reserves 1.8Bn USD<br />Dollar loosing stability<br />Purchasing assets in other countries<br />South Africa: Gold Mines<br />Korean assets<br />
  13. 13. Economic Challenges<br />
  14. 14. Click anywhere on the image to see this video<br />
  15. 15. Implications<br />U.S Treasury Bills<br />Increased Money Supply<br />Inflation<br /><ul><li>Reduces borrowings
  16. 16. Facilitates savings</li></ul>Reduces Domestic Consumption<br />Increased Interest Rates<br />Surplus Goods<br />Unemployment<br />Declining Exports<br />
  17. 17. Socio Political Challenges<br />Demographics<br /><ul><li>Ageing population
  18. 18. 15-64 years: 73.6%
  19. 19. Excess labor force</li></li></ul><li>Socio Political Challenges<br />Low Wages<br />High Population<br />Large Labor Force<br />Low Purchasing Power<br />Disguised Employment<br />Low Domestic Consumption<br />
  20. 20. The Silver Lining<br />Ageing population<br />Labor Dries Up<br />Increase in wages<br />Increased<br />Labor Cost<br />Increase Purchasing Power<br />Decreased Corporate Investments<br />Balanced Economy<br />Increase in<br />Consumption<br />
  21. 21. Socio Political Challenges<br />Political factors<br />Inequality of wealth<br />Legal system<br />Imitation products<br />Linguistic challenges<br />
  22. 22. Thank You<br />

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