The Chinese economy experienced astonishing growth over the last few decades, transforming China into the world's second largest economy. Since economic reforms began in 1978, China has shifted from a primarily agricultural economy to a modern economy led by industry and services. Recently, China's economic growth has slowed, with GDP growth falling to 6.8% in the fourth quarter of 2015, the slowest pace in over 25 years. The Chinese government has pledged structural reforms to transition China to a more sustainable growth model in the future.

1. Prepared & Presented
By:
Avhinandan Khajuria
MBA 4TH Sem.
0601MBA14
Kathua Campus,
ECONOMIC CONDITIONS OF CHINA

2. Economy
The Chinese economy experienced astonishing growth
in the last few decades that catapulted the country to
become the world's second largest economy.
In 1978—when China started off the economic
reforms—the country ranked ninth in nominal gross
domestic product (GDP) with USD 214 billion; 35 years
later it jumped up to second place with a nominal GDP
of USD 9.2 trillion and the world's largest economy by
purchasing power parity according to IMF.
Since the introduction of the economic reforms in 1978,

3. However, in recent years, China’s modernization
propelled the tertiary sector and, in 2013, it became
the largest category of GDP with a share of 46.1%,
while the secondary sector still accounted for a
sizeable 45.0% of the country’s total output.
Meanwhile, the primary sector’s weight in GDP
has shrunk dramatically since the country opened
to the world.
China is a global manufacturing hub and largest
manufacturing economy in the world as well as the

4. Until 2015 China was the world's fastest-
growing major economy, with growth rates
averaging 10% over 30 years.
As of 2015 there was talk of a "slowing"
Chinese economy, but that referred to a
slowing of the rate of economic growth, not to
a recession.
The slowdown manifested in industrial
regions as excess capacity in basic industries

5. 2010 2011 2012 2013 2014
Population (million) 1,341 1,347 1,354 1,361 1,368
GDP per capita (USD) 4,510 5,579 6,264 7,040 7,574
GDP (USD bn) 6,048 7,516 8,481 9,579 10,360
Economic Growth
(GDP, annual variation
in %)
10.5 9.3 7.7 7.7 7.4
Consumption (annual
variation in %)
10.6 14.6 10.2 8.7 -
Investment (annual
variation in %)
24.5 24.0 20.6 19.6 15.7
Industrial Production
(annual variation in %)
15.7 13.9 10.0 9.7 8.3
Recent Chinese Economic Data

6. Retail Sales (annual
variation in %)
18.4 17.1 14.3 13.1 12.0
Unemployment Rate 4.1 4.1 4.1 4.1 4.1
Fiscal Balance (% of GDP) -1.7 -1.1 -1.6 -1.9 -1.8
Public Debt (% of GDP) 16.5 14.9 14.5 14.8 -
Money (annual variation in
%)
19.7 13.6 13.8 13.6 12.2
Inflation Rate (CPI, annual
variation in %, eop)
4.6 4.1 2.5 2.5 1.5
Inflation Rate (CPI, annual
variation in %)
3.3 5.4 2.6 2.6 2.0
Inflation (PPI, annual
variation in %)
5.5 6.0 -1.7 -1.9 -1.9

7. Policy Interest Rate (%) 5.81 6.56 6.00 6.00 5.60
Stock Market (annual
variation in %)
-14.3 -21.7 3.2 -6.7 52.9
Exchange Rate (vs USD) 6.59 6.29 6.23 6.05 6.21
Exchange Rate (vs USD,
aop)
6.77 6.46 6.31 6.15 6.16
Current Account (% of
GDP)
3.9 1.8 2.5 1.5 2.1
Current Account Balance
(USD bn)
238 136 215 148 220
Trade Balance (USD
billion)
184 154 231 258 383
Exports (USD billion) 1,578 1,898 2,049 2,209 2,343

8. Imports (USD billion) 1,394 1,744 1,819 1,952 1,962
Exports (annual
variation in %)
31.3 20.2 8.0 7.8 6.1
Imports (annual
variation in %)
38.7 25.0 4.3 7.3 0.4
International Reserves
(USD)
2,847 3,181 3,312 3,821 3,843
External Debt (% of
GDP)
9.1 9.2 8.7 9.0 8.6
In 2015 as a whole, the economy
increased 6.9%, which was in line with
the government’s target of

9. China’s economic growth slipped down to 6.8% in
Q4 of 2015, which was marginally below the
6.9% registered in Q3 of the same year.
Nonetheless, growth fell short the 7.4%
observed in 2014 and marked the slowest pace
since 1990.
The currency’s weakness observed in December
2015 worsened at the beginning of the year as
the Chinese currency remains under pressure due
to strong capital outflows amid concerns about

12. Current Trends & Projections
 Currently, China’s economy has shifted to a slow gear,
having a bigger impact on those resource-exporting
countries which highly depend on China’s market, but
having no remarkable impact on European and US
economic growth.
 In particular, China’s slow economy is not the “culprit”
of the recent US stock market slump. Instead, the US
stock market fall was caused by its excessive high
growth in recent years.
 The Chinese leadership has promised structural

13. Economic growth is projected to decline to 6.7 by
2016 & gradually to 6.2% by 2017.
The announced infrastructure
stimulus measures will help overall investment, but
adjustment in several heavy industries is set to
continue and this stimulus is not sustainable in the
longer term.
Real estate investment is bottoming
out, but working off housing inventories will take
some more time. Consumption is set to remain
robust.
Food and services prices are rising, but the
absence of price pressures in other areas will keep
consumer price inflation low.