China has the world's largest population at 1.35 billion people and the second largest economy. It adopted a socialist market economy and has experienced rapid economic growth, becoming the largest exporter and manufacturer. China's economy is driven by industry, services, and agriculture. While it has transitioned from a planned economy to market reforms, challenges remain such as a slowing economy, inflation, and corruption.

1. GROUP-4
ECONOMY OF CHINA
Group-4

2. CHINA PROFILE
 China is largest country of east Asia.
 The population is approximately 20% of world
population
 China adopted- socialist market economy
 CHINA is the world second largest economy by
nominal GDP & by purchase power parity .
 China is also the largest Exporter & second largest
Importer of goods in the world.

3. Population
• China’s population in 2012 was 1.35 billion– the largest in
the world.
• It also has the world’s largest labor force of 795.4 million,
though some estimates place China’s potential labor force .
• The official unemployment rate for China in 2012, provided
by government statistics, was 4.1 percent.
• China has maintained an unemployment rate of 4 to 4.3
percent over the last ten years, according to government
figures.

4. Maoist ERA…..
 Formation of People’s Republic in 1949.
 Reduce inflation by the end of 1950.
 Communism
 Nationalization of banking system.
 Eliminating landlords.
 Great leap forward

5. Economic Reform
 1970-1980 ~ this stage involved DE collectivization of
agriculture , the opening up of the country to foreign
investment & permission of entrepreneurs to start up
business.
 1980-1990 ~this stage involved privatization &
contracting out of much state owned industry , lifting
of price control ,protection policies & regulation.

6. Structural change
• China: “classic” pattern, moving from primary to
manufacturing sector, which has doubled its share of
workforce and tripled its share of output.
• India: Move has been mainly from agriculture to
services in share of output, with no substantial
increase in manufacturing, and the structure of
employment has not changed much. Share of the
primary sector in GDP fell from 60 per cent to 25 per
cent in four decades, but share in employment still
more than 60 per cent.

7. SECTORS
PRIMARY
SECONDARY
TERITARY

8. Agriculture
 Agriculture contribute for around 10.9% of china
GDP.
 China is one of the world largest producer & consumer
of agriculture products.
 Principal source of rice ,wheat, corn , tobacco, tae , fish
etc.
 China cropland area is only 75% of US total but china
still produce about 30% more crops than US.

9. Industry
 Industry & construction account for 46.8% of china’s
GDP.
 China ranked 3rd worldwide in industrial output.
 Major industries include mining, ore processing , iron
,steel, textile ,petroleum , cement , automobile .rail
cars etc.
• Despite seeing a 3.3 percentage point drop in 2012,
industries still accounted for 45.3 percent of China’s
GDP.

10. Services
 Service sector produced 43% of china annual GDP.
 Wholesale and retail trade expanded.
 Public administration remain a main component of
service sector.
 Tourism has become significant factor in employment
and source of foreign exchange.

11. Import-Export
 Import- $ 1.78 trillion
 Import Goods – industrial supplies , capital goods ,
machinery , high technology equipment .
 Export-$ 2.021 trillion
 Export Goods- textile , electrical equipment ,
agricultural products , chemicals etc.

12. China’s GDP
0
1
2
3
4
5
6
7
8
9
2000 2004 2008 2012
$ Trillion
$ Trillion
1.1
8.23
4.33
1.6

13. Is India or China
• India lags behind china in infrastructure.
• China has a weak banking and legal system.
• India has the advantage of the English language which has
made it easier to participate in the global economy.
• What holds India back are bureaucratic red tape, corruption
and its inability to build infrastructure fast enough.
• According to Peter Drucker, India has managed rural to
urban transition in a relatively smooth and peaceful manner,
which China is still struggling to do.

14. India China
Future Areas of
growth
R&D, bio-
technology, high-
value IT services
(legal, medical,
engineering
architecture),
manufacturing, agro-
based industry
IT business, services
and continued
manufacturing
FDI in first 6
month of 2013
$10.87 billion. $61.98 billion.
Per capita income 1,501 USD for 2012 6,071 USD for 2012
GDP for 2012 1.842 trillion USD 8.227 trillion USD
Growth Rate 7.9 % in 2012 to 8.4 % in
2013
5.1 % in 2012 to 6.1 % in
2013
Comparing India and China’s Growth Stories

15. “GDP Growth 2000 to 2050”
Source: Goldmann Sachs: The Path to 2050
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
[2003 bn US Dollars]
Germany
USA
Japan
Russia

16. Current Issue
 Slowdown of Chinese economy:
 Economic weakness in the U.S. and Europe
 A falloff in domestic demand
 Inflation worries
 Housing and banking are a mess
 A corrupt political system