Understanding China

Understanding China
Chen Mingming
Senior Communication Advisor to the Chinese Foreign Ministry
Former Chinese Ambassador to New Zealand and Sweden

China in Profile
• Name: the People's Republic of China(PRC)
• Land: 9.6 million square kilometers. Third largest country
in the world, next to Russia and Canada; is as large as
Europe， or 1/3 of Africa.
• has 14 neighbors(more than any other country), and 8
maritime nighbors
• 2014 Population: 1.368 billion, accounting for close to
20% of global total; natural population growth rate 0.52%,
lower than average level of developiing countries.
• Most populous and largest developing country in the
world
• Largest energy consuming country, taking up 23 % of
global energy consumption; largest manufacturing
country; largest material consuming country

China in Profile
• second largest economy and largest trading
nation in world
• 2014 GDP: 10.4 trillion dollars; next only to
US(16 trillion dollars，five times that of Africa),
18% of global total.
• 2014 per capita GDP: 7380 dollars, (13% of U.S,
equalivant to that of UK in early 1950s) ranking
87th place in world， lowest among major
economies；2/3 of world average， on a par
with Peru
• largest foreign investment destination（2014）

China in Profile
• 2015GDP growth:6.9%, contributing to 30% of
global growth(average global GDP growth:2.5%)，
adding more to global output than any other
country
• Annual GDP increase the same as total GDP of
Turkey(17th largest economy)
• share of public health spending in
GDP:5.1%(developing countries: 10%),
education: 4%(US: 4.8%); R&D, 2.09%(higher
than EU)
• Scientists & engineers: 3.2 million, largest in
world

China in Profile
• Total import and export of 2015: 3.96 trillion dollars, with foreign
trade accounting for 45% of GDP and contributing to 10.5% of
economic growth.
Foreign exchange reserves in August, 2015): 3.4 trillion dollars,
• 2,850 universities and colleges and 24 million university and
college students, 7.5 million university graduates in 2015 (more
than Finland's total population)
• Pyramid Income structure: aflluent:1%, middle income
group(10,000 -100，000dollars, 300 million people, 30% of global
total): 29%; low income group: 70%
• People below poverty line(1.25 dollars/day): 77 million(6.5 % of
total population，2rd largest group in world: India has largest
group)

China in Profile
• Average life expectancy: 76 years old (India 65,world
average:69.6);
• Urban unemployment rate: 4.09%(2014)
• 2015 inflation rate: 1.4%;
• Service's share of GDP: 50.5%; manufacturing: 40.5%;
agriculture: 9%(2015)
• Investment's share of GDP: 54.4%; consumption:50; (
US:70%)
• Savings as share of GDP: 53%, highest in world( 8 times of
US);
• Basic self-sufficiency in food:90%; energy: 85%
• Private sector's share of GDP: over 60%. 16 million private
businesses
• New jobs created in 2015: 13 million, largest in history
• Foreign aid in 2012: over two billion dollars

Topography and Its Impact on
Evution of Chinese Civilization
• China is situated in East Asia and faces West Pacific. It is
surrounded by mountain ranges in the southwest and
Gobi Deserts in the west and north, which serve as
natural shields. Despite a coastline of over 10,000
kilometers, China has been a continental power, not
maritime power.
• Independent growth of Chinese culture and language.
Interaction with other cultures began only after Chinese
culture took shape.

Evolution of Chinese Civilization
Not subjected to conquest by external
civilization, as was the case in other parts
of the world.(ancient Egyptian civilization)
Self-sufficiency: little incentive to expand
external contacts, which led to closing the
country economically.

Topography and Its Impact on Evolution
of Chinese Civilization
An inward looking power: The Great Wall was
built to defend itself, not for expansion.

Evolution of Chinese Civilization
• A recorded uninterrupted history of over 4,000
years, only surviving ancient civilization in the
world.
• China invented gunpower, the compass,
printing and paper making, which exerted a
profound impact on the evolution of human
civilization.

Unification of China
(First landmark event in China's history)
• In 221 B.C., Emperor Qin Shihuang
unified China after defeating warring
states (same time of Roman Empire).
• A landmark event in Chinese history: A
centralized governance structure with
the emperor being the supreme ruler was
established. County became the basic
administrative unit, with no kingdoms or
dukedoms between it and national
government. All local officials owed
allegiance to the emperor. No federalism.

Unification of China
• This model of governance lasted for over 2,000
years, during which China was ruled by 400
emperors in 16 dynasties. Longest functioning
political structure in the world.
• China has remained a unified country under the
leadership of a centralized government.
• China was the dominant country in East Asia,
whose culture exerted great impact on its
neighbors, particularly Korea, Japan and Viet
Nam. Collectively, this is known as the Chinese
cultural zone.

Confucius
and Shaping of Chinese Mind
• Confucius(551 B.C.-479 B.C.),
a great Chinese thinker,
philosopher and educator.

Confucius
and Shaping of Chinese Mind
• He advocated justice, peace, rites, order,
benevolence and education for all without
discrimination. He developed a code of conduct
and ethics which have been observed for
generations in China.
• Confucius is to Chinese civilization what Jesus
Christ is to Western civilization. But Confucius
was not a religious figure, as he did not believe
in existence of god.
• China has opened 300 Confucius Institutes
overseas to promote understanding of Chinese
culture.

Two Defining Features of
Chinese Culture
1. Belief in unified nation state and a high degree
of cohesion: common Chinese identity (caused
by China's geographical location)
2.Great power of assimilation
• Example: Manchus, a minority group in
Manchuria, occupied the rest of China, and
established China's last dynasty, namely, the
Qing Dynasty(1644-1911). But the Manchus
were completely assimilated into the culture of
the Hans whom they had conquered.

Religions in China
There are over 100 million believers of various
faiths in China.
• Buddhism, introduced into China from India in the
first century A.D., is the most influential one.
• Taoism, a home grown religion with limited
influence.
• Islam, introduced into China in 7th century
A.D.(23 million believers)
• Catholicism, introduced into China in early 19th
century(6.5 million believers)
• Protestantism, introduced into China in early 19th
century(23 million believers)

Religions in China
• China has always been a secular country. Unlike
many Western countries, it has no state religion.
The power of the state has always been much
greater than that of religion.
• Religion's role in shaping the Chinese mind is far
less important than Confucianism. Religion's
impact on evolution of Chinese culture is
limited.
• China does not have a messianic culture of
converting others.

Composition of the Chinese Nation
• There are 56 ethnic groups in China.
• The Han people, the largest group, accounts for
92% of China's total population. So the Chinese
culture generally refers to the culture of the
Hans. The remaining 55 minority groups are
mostly in southwest, northwest and northeast
China.

Decline of Imperial China
• The Chinese empire reached golden age
in the Tang and Song Dynasties(618-
1279) —largest economy in the world. The
Silk Road linked China with the West.
China accounted for 30% of global GDP,
higher than that of Europe and similar to
that of US in 2000.

• But it saw fast decline in
the Qing Dynasty in the
18th century. Chinese
rulers blindly believed in
superiority of imperial
China and refused to open
the country to the rest of
the world. Thanks to the
Industrial Revolution, the
West closed gap with
China and surpassed it.

• The 19th century was a century of
humiliation for China. Western
powers forced open China's door,
occupied parts of the country and
imposed unequal treaties upon it.
Hong Kong and Macao
respectively came under British
rule and Portuguese rule, and
Taiwan was occupied by Japan.
• This is why till today, the Chinese
are still sensitive about foreign
interference in China's internal
affairs.

Overthrow of Imperial China
(Second landmark event in China's history)
• The corrupt Qing government was
overthrown by a popular revolution led by
Dr. Sun Yat-sen in 1911 which ended the
2,000-year-old imperial rule in China.
• The centenary of the 1911 Revolution was
marked in China in 2011. We are just
over 100 years away from the collapse of
imperial China.

Birth of the Communist Party of
China(CPC)
（Third landmark event in China's history）
• The Republic of China was founded in 1911; the
Nationalist Party headed by Dr. Sun Yat-sen
gained power.
• The Communist Party of China was formed in
1921. After Dr. Sen Yat-sen's death, the
Nationalist Party tried to suppress the CPC,
triggering a prolonged civil war.

Founding of New China
(Fourth landmark event in China's history)
• After the victory in the War against
Japanese Aggression, the
Nationalist Party provoked a civil
war against the CPC. But it was
defeated and fled to Taiwan. On
October 1, 1949, Mao Zedong,
leader of the CPC, proclaimed the
founding of the People's Republic
of China. This ushered in a new
historical stage in contemporary
China. The CPC is now 93 years
old.

Political System of China
• China is a socialist country under the
leadership of the CPC. The CPC is the
governing party of China. With over 87
million fee-paying members(more than
population of Germany), it is the largest
political party in the world.
• Eight non-communist parties are engaged
in China's governance in cooperation with
the CPC.

Transition to New Party and
Government Leadership
• The most important political development
in China in recent years was the 18th
CPC National Congress held in
November, 2012.

Transition to New Party and
Government Leadership
• A group of new leaders were
elected. Xi Jinping, a ke CPC
leader and former Chinese Vice
President, was elected new
party general secretary at
Party Congress in 2012. He
became Chinese president in
March 2013. Having taken
various government posts, Xi is
a capable leader and his
governance agenda has won
solid public support.

What Has Led to
China's Profound Transformation
(Fifth landmark event in China's history)
• China is undergoing profound social
• and economic transformation which
started over 30 years ago.
• Until then, China had been an agrarian
society since ancient times with over 90%
of its population being rural. In modern
times, it lagged far behind the West, and
poverty, civil strife and starvation were
common.

What Has Led to
• Things began to improve
significantly after the founding
of New China under the
leadership of Mao Zedong. But
Mao later believed that China
was on the wrong track of
development and started the
so-called Cultural Revolution in
1966. It lasted ten years and
proved a disastrous exercise
that not only closed China but
also brought its economy to
the brink of bankruptcy.

What Has Led to
• The private sector was wiped out. China's gap with
the West again widened. China’s GDP was a pitiful
1.8% of global total in the late 1970s.

What Has Led to
• Mao Zedong died in 1976, and two
years later, Deng Xiaoping，also a
founding father of New China,
became China's top leader. Deng
Xiaoping had a great sense of
pragmatism. He believed that China
had to change course and lost no
time in starting a daring reform and
opening-up program. He is
therefore referred to as the architect
of China's reform and opening-up
program by Western media.

Rural Reform
• China's reform started in the rural areas.
Deng Xiaoping impowered Chinese farmers
by introducing a household contract
responsibility system to give farmers more
incentives in farming. Private economy in
rural areas was restored.
• Government purchasing prices of grain
were raised. Grain output soared as a
result. Thanks to rural reform, hunger and
starvation for the first time in China's history
became a thing of the past.

Rural Reform
• Rural reform started the process of
agricultural mechanization, a process
that is ongoing. As farming became
mechanized, surplus rural labor force
increased. China encouraged its
farmers to set up small factories which
absorbed millions of surplus rural labor
force. These small factories were later
to become a dynamic private sector.
Rural income rose; surplus rural labor
force provided needed labor for
industrialization/ urbanization.

Urban Reform
• Sweeping urban reform was introduced in
the early 1980s with the goal of replacing
the Soviet-style command economy with a
socialist market economy.

Urban Reform
• Price control over most products
was lifted; capital market
developed; stock exchanges set
up and hundreds of companies
are listed; business acquisition
and merger encouraged. Share-
holding companies set up.
• Almost all small and medium-
sized state-owned
enterprises(SOES) were
privatized. There were close to
300,000 SOES in early 1990s;
government now only controls
100 plus large groups of SOES.

Urban Reform
• Private businesses now
account for over 70% of
national total and
contribute to over 60%
of China's GDP, and
create over 90% of new
jobs in China.

Urban Reform
• Development of housing market in
late 1990s was a most significant
development in urban reform,
creating huge demand for private
housing. The housing sector:
engine driving China’s economic
growth. In past 15 years, China has
built enough apartment buildings to
house combined population of
Germany, France,UK. Its housing
sector & infrastructure account for
one fourth of global steel demand.
• Market now plays a major role in
resources allocation.

Open China’s Economy to World
• China's opening started in
eastern coastal region.
• Four special economic zones
were set up in the eastern
coastal region to attract foreign
capital. Shenzhen is one of
them. A sleepy fishing village
close to Hong Kong in the
early 1980s, Shenzhen has
grown into a major metropolis
with a population of 13 million.
Its total export and import rank
first in China.

• China has been the second largest (next
only to the U.S.) foreign investment
destination, with average daily inflow of
foreign investment exceeding 100 million
dollars in the past two decades. Between
1979- 2013, over 1.3 trillion dollars of
foreign investment was made in China.
The figure was 126.7 billion dollars in
2015,a 6.4% increase.

• Among the global
500 companies, 490
have invested in
China.
• Almost all Apple
products are made in
China. Over 1 million
Chinese workers
asembled Apple
products in China.

Special Role of Hong Kong
in China’s Opening Up
• Hong Kong was occupied by Britain in the 19th
century. China resumed exercise of sovereignty
over Hong Kong in 1997. A system of "One
Country, Two Systems" is practiced in HK, and
its former social and economic systems have
remained basically unchanged.
• An international trading and financial center, HK
serves as an indispensable platform for
attracting foreign investment and expertise to
China. More Chinese companies are listed in HK
than in New York.

China’s Accession to The WTO
– A Landmark Event in China’s Opening-up
• China joined the WTO
in 2001, marking a
new turning point in
China’s opening-up.
• Tariffs were cut from
15.3% to 9.8%,
below the average
level of developing
countries.

China’s Accession to The WTO
– A Landmark Event in China’s Opening-up
• China has opened most of its economic
sectors, particularly the services sector, to
foreign investment. It is now more open
than the average developing country. In
some sectors, it is more open than Japan.
• Significance: China’s full integration into
the global economy.

China’s Reform and Opening-up: An
Unparalleled Success in Human History
• In 34 years since started in 1978, reform and
opening up have accomplished China’s
transition from a rigid centralized command
economy to a vibrant socialist market economy.
• Annual growth rate has been close to 10% for
34 years for over one billion people, unseen in
world history. China led the world in growth
during this period, with growth rate being 2-4
times of world average.

China’s Reform and Opening up: An
• In 1978, China’s GDP stood at 268 billion
dollars, ranking 15th place in the world. In
2014, it reached 10.4 trillion dollars and
was next only to the United States. China's
GDP has doubled every eight years.
• China’s share of global GDP rose from
1.8% in 1978 to 18% in 2014.

• China’s foreign exchange reserves rose
from just 167 million dollars in 1978 to 3.4
trillion dollars in first half of 2014,
accounting for 27.5%% of global total and
more than any other country. Of total, 1.3
trillion dollars were US treasury bonds by
May, 2013.

• 676 million people in
China, close to Africa's
population, were lifted
out of poverty between
1981-2008, taking up
70% of people lifted out
of poverty in same period
worldwide. It is an
achievement unseen in
world history and hailed
by the United Nations.

• China’s economy registered
explosive growth, particularly
in the auto and housing
sectors in the first decade of
this century. China produced
2.33 million vehicles in 2001.
The number jumped to 23
million in 2014, 25% of total
global output. China has
overtaken the US to become
the largest vehicle producer in
the world for 6 years. China
will be the largest auto
market in the world in next 20
years.

China in Industrialization
• The reform and opening-up program has
accelerated a massive process of
industrialization in China.
• China is the leading global producer and
consumer of steel, cement, coal, electricity,
machinery, electronics, footwear, garment
and household appliances. It is the world’s
largest producer and exporter of over 200
industrial products. In 2014, it produced
60% of global output of power generating
equipment, 70% of mobile phones and
computers,41% of ships, and 25% of cars.
2014 steel output: 823 million tons, over
50% of world total(EU:10%)
• 2014 coal output:3.9 billion tons, over 40%
of global total

China in Industrialization
• In 1995, only two Chinese companies were
among global top 500 companies. The
number jumped to 95 last year, making
Chinese companies the second largest
group among top 500.
• China has surpassed U.S. to become the
largest global manufacturers, accounting
for over 30% of global manufacturing
output. Rapid industrialization has become
a key factor driving China’s growth.

Urbanization: Most Important
Development Trend in China Today
• This process started in the early 1980s,
caused by migration of surplus rural
labor force to cities. 500 million rural
people, more than the combined
population of US, UK, France and Italy,
have moved into cities. By 2030,
another 300 million rural people will
move to cities.

• In 2015, 56% of Chinese,
numbering 770 million,
live in cities, reaching the
world average level.
There are 100 cities in
China each having a
population of over one
million, and the number of
towns and small cities is
growing. 29 of 75 most
dynamic cities in the
world are in China.

• Urbanization marks China’s transition from a rural
society to an urban society. Urbanization in China is
expected to last for 20 years, which means much room
for growth.
• Urbanization will create tremendous housing demand
and demand for better urban infrastructure and
services. This will be the most important force driving
China’s development in the coming decades.
• Two billion square meters of buildings are constructed
in China annually, accounting for 42% of buildings
constructucted globally. Two thirds of new aiports
under construction in the world are in China.

Global Significance of
China’s Development
• China has been by far
the biggest driver of
global growth since
global financial crisis in
2008, contributing to
20% of global growth.

• China has become the largest trading nationr. Its
trade has grown at an annual rate of 21.7% in past
decade(world average:10%). China now accounts
for 10.2% of global trade. Its export in 2014
accounted for 12% of global total. Massive import
over the years has created 14 million jobs for
countries exporting to China.Total import in next five
years will reach ten trillion dollars. China is largest
trade partner of 127 countries(US: 70 countries)
• In the past decade, foreign companies in China have
made 260 billion dollars of net profit, growing 30%
annually.

• China has been 3rd largest
foreign investor in the world for 3
years, with over one trillion
dollars of non-financial
investment in 177 countries
(80% in developing countries) at
end of 2015.
• In 2015, China's outbound
investment reached 118 billion
dollars, growing by 18% and a
40 times increase in 13years.
The rate was far higher than that
of foreign investment in
China(6.4%).

• Chinese companies have employed 1.22
million workers in recipient countries. But
such investment is still modest, only 9.4%
of US overseas investment. Its total
outbound investment ranks 11th place in
the world.
• China's outbound investment in next
decade will reach 1.25 trillion dollars.

• China has provided 50
billion dollars of aid to
161 countries and trained
120,000 professionals for
developing countries.
• China's foreign aid has
increased at an annual
rate of 30% in recent
years, reaching 15 billion
dollars between 2010-
2012.

China Still Faces Daunting
Development Challenges
 Low Per Capita Share of Resources
China’s per capita share of major resources
is well below world average.
• Farmland: 43% of average global share.
China produces 25% of global food with
9% of global land feeds 20% of global
population.
• Fresh water: 28% of world average and
6.5% of world total, leading to shortage of
water in 70% of Chinese cities. Beijing's per
capita share of water is only 1/80 of world
average, less than that of Middle East.
Northern China faces a water crisis.
• Forest resources: 25% of average global
share
• Iron ore and copper: 17% Oil and gas: 7.7%

 Unbalanced Energy
Structure
China meets 85% of its
energy needs but depends
excessively on coal and
import accounts for 60% of its
oil needs. Largest coal
producer and 4th largest oil
producer, 6th largest natual
gas producer in the world.
Total energy consumption in
2014: 4.26 billion tons of
standard coal

Unbalanced Energy Structure
• Mix of energy consumption : Coal: 66%;
oil & natural gas17.1 %; hydro, nuclear,
wind and solar power: 16.9%.
Coal is a dirty energy, creating acid rain
affecting 1/3 of China’s land area. A major
source of carbon emission and pollution.
2013 Coal consumption: 3.7 billion tons,

 Unbalanced Energy
Structure
• In 2014, China
imported 308 million
tons of oil, accounting
for 60% of its oil
consumption. China
has overtaken U. S
to become world’s
largest oil importer.
• China imports 30% of
natural gas used.

 Low Economic Efficiency
• China accounts for 18% of global economic output , butt
consumes 20% of total global energy, more than the US.
But its GDP is 56.5% of US. Productivity 1/12 of US.
• It consumes 53% of global output of cement, 47% of iron
ore, 47% of coal, 45% of steel, 11% of oil, 44% of lead,
and 38% of copper. China's economy is a typical
resources and energy intensive economy.
• China’s per unit GDP energy consumption is 7 times that
of Japan and 2.2 times of world average. It accounted for
71% of increase in global energy consumption in 2014.

Lack of competitive core
technologies
• 85% of computer chips are imported,
reaching192 billion dollars in 2014,
accounting for 52% of global output. It is
more than China's oil import.
• Although largest auto maker in world, only
40% of cars are produced by local
Chinese companies. No Chinese brand
car can compete globally.

• Excess production
capacity in almost all
sectors, particularly in
steel, cement making,
coal mining,
manufacturing, solar
energy products making,
shipbuilding; half of
shipbuilding capacity lies
idle.
• Annual steel making
capacity: 900 million tons,
actual output in 2014: 820
million tons, over 50% of

 Environmental Degradation
Trend towards environmental degradation has not been
reversed.
• Air pollution affects 50% of China's population. Soil
erosion, pollution and carbon emission remain serious.
• Of 160 major Chinese cities, only 10% meet air quality
standard
• China has become top global carbon emitter, contributing
to 27% of global carbon emission, although its per capita
share of carbon emission is far below that of developed
countries.
• Pollution costs 10% of China's GDP.

 Environmental
Degradation
70% of surface water in China is
polluted; one in four Chinese
drinks substandard tap water.
• East China was shrouded by
heavy smog in January, last year,
worst in half a century. The
country now faces an
environmental crisis.
• Beijing and surrounding areas
account for 1/77 of global land
area but consume 10% of global
coal output.

 Gap in Development between East
and West China
• East China accounts for 40% of
China’s land area but 77% of its
population and over 70% of GDP.
• West China lags far behind East China
in development.
• Beijing and Shanghai in East China
approach developed countries,
whereas several dozen million people
in rural West China live on 1.25 dollars
a day.
• Excessive dependence on investment:
54.4% of GDP(US: 19%)

Aging Population
China faces more severe population
challenge than any other country in the
world.
• 16 million newborns last year, more than
combined population of Sweden and
Denmark.
• Population explosion is no longer an issue
confronting China, as is the case in many
other developing countries.

Aging Population
• China has entered a period of low
fertility and low population increase
thanks to one child policy pursued for
over 30 years. This policy has
reduced population growth by 400
million. Global population reached 7
billion July, 2012, five years later
thanks to China's family planning
policy.

 Aging Population
• Fertility rate is less than
1.5 children per couple,
on a par with or lower
than developed
countries.
• Population growth rate
is expected to drop
sharply in coming years.
China's population will
stop growing and start
to shrink around 2030.

Aging Population
• People reaching 60 and above are
approaching 200 million, 14.9% of total
population and largest such group in world.
The number will exceed the whole
population of U.S. by 2030. Aging population
could become a huge burden to government.
China could become old before becoming
rich.
• There are 85 million people with disabilities,
also largest in world.

Currently, 25 million people enter labor
market every year, more than Australia's
population. This has created huge pressure
for employment. But growth of labor force
peaked and began to decline in 2012.
Working population in 2013:0.92
billion,67.6% of total population,a drop of
2.44 million over 2012. This means growth
needs to be driven more by gains in
productivity, not just more labor.

• Trap in middle income transition?
• When a country's average GDP reaches
between 4,000-10,000 dollars, its growth
tends to stall due to wage rises, drop in
R&D benefits and investment in
infrastructure, aging population and
increasing environmental costs.
• Can China avoid this trap?

Pressing Need for Changing
Growth Model
• China’s current growth model is one of high
energy and resources consumption, low output
and high carbon emission.
• Infrastructural investment is the main driver of
growth, while consumption is insufficient.
• It is unbalanced and unsustainable.
• The need to rebalance the economy: moving
from investment and credit driven development
to consumption and innovation driven
development
• China must change this growth model if it is to
maintain sound economic development.

Pursuit of Sustainable
Development
• The government is keenly aware of this
daunting development challenge and has
adopted the strategy of pursuing balanced
and sustainable development.
• Reduce dependence on investment in
infrastructure and increase consumption
and services

Progress in Pursuit of
Sustainable Development
Energy conservation and reducing carbon emissions:
• In past five years, energy consumption has grown at
4.7%, lower than 7.5% economic growth. Share of coal
in energy consumption has been cut by 2%. Energy
consumption per GDP unit in 2015 dropped by 5.6%,
its growth lowest since 1998.
• China is pursuing the world’s largest clean energy
development program and is the top world producer of
solar and wind power equipment.
• Goal: Stop Carbon emission growth in 2030; clean
energy reaches 20% of total energy consumption.

China's economy enters a New Normal
• Growth shifts from high rate growth to
medium-high rate growth; dropping from
9.5% annual growth for over 25 years to
around 6.9% in 2015, slowest in 25 years.
• Goal: annual growth of around 7% for
coming years, which is necessary to
create employment.
• Still be one of the highest in the world.
• To be achieved by innovation,
development of services and consumption.

Energy conservation and reducing
carbon emissions:
• China has 20 nuclear power
generators, and 28 are under planning
or construction, which is the largest
nuclear development progrqam in the
world. China will become second
largest nuclear power producer in
2020. China is world's No. 1 wind
power producer, growing 96%
annually. Also world's largest hydro
and solar power producer. Hydro
power: 27% of global total,;5 of 10
largest hydro power stations in world
are in China.

Energy conservation and carbon emission
reduction:
Investment in clean energy in 2014: 90 billion
dollars, up 32%, accounting for 29% of global
total. (Europe: up 1%)
• Renewable power generation reached 32% of
total power generation in 2014.
• Investment in energy saving and environental
protection wil reach 315 billion dollars in next 5
years.

Scientific Development
• Support development
of West China to
narrow gap in
regional development
by providing financial
assistance and
building expressways,
railways and airports
Result: West China
grows faster than
East China

Scientific Development
• Increase government input in R&D to raise
production efficiency and upgrade
industries. Such investment has grown
20% annually in past six years.
• Increase spending on education to train
competent professionals

China Pursues Peaceful
Development
• China will not pursue development at
expense of others
• Development through peace and share
development interests
• China has entered into free trade
agreements with 20 countries in Asia
Pacific, Europe and Latin America, opened
its huge domestic market so that other
countries can benefit from China's
development.

China’s Aid to Africa
• Africa is a major recipient of
Chinese aid. Total Chinese aid to
Africa has exceeded 40 billion
dollars. China is committed to
providing long-term aid to Africa.
• China has sent medical teams to
almost all African countries and
treated millions of African patients.
• The latest example is fighting
Ebola epidemic in West Africa.

China’s Foreign Policy Goals
• Ensuring a peaceful international
environment for China’s development
endeavors
• Making friends with all and making
enemies with none
• Mutual respect for sovereignty and non-
interference - cornerstone of China’s
diplomacy

• Meeting international
responsibility in
upholding global
peace and security.
China has sent
14,000 peacekeepers
on 24 missions, more
than US, Russia.

• Maintaining good ties
with neighbors, major
powers like US,
Russia, EU and all
others

What Lies Ahead for
• China’s reform and opening-up will
continue. A high degree of consensus
between the public and policy makers
about the need to continue the program.
• Robust domestic demand created by
industrialization and urbanization will drive
China’s economic development for several
decades to come. Urbanization in next 20
years will create 8 trillion dollars in
demand.

What Lies Ahead for
• Growing at the current rate, China
could surpass the United States in
15 years to become the world’s
largest economy.
• The goal set at the 18th CPC
National Congress lin 2012 is for
China’s 2010 GDP and per capita
income to double by 2020 and
reach current level of medium-
level of developed countries by
mid-21st century. This goal is
obtainable.

Realize the Chinese Dream
• The goal, which is to achieve national
renewal, was put forward by Chinese
President Xi Jinping when he took over
Party leadership in November, 2012.

The Chinese experience:
What is the relevance?
As conditions vary from country to country, the Chinese
growth model may not be generally applicable, but it can
serve as useful reference for other developing countries
in pursuing development.
1.Commitment of political leadership is of
paramount importance.
2.Promoting growth should top government
agenda.
3.Forging public-government consensus on
pursuing this goal
4.Be firm in carrying out reform and discarding
unworkable practices.
5.Pursuing government guided market operation

The Chinese experience:
What is the relevance?
6.Embracing globalization and promoting an open
economy
7.Fully leveraging a country’s comparative
advantages
8.Enhancing education and creating a huge pool
of competent professionals
9.Increasing input in R&D to move up the value
chain
10.Pursing sound and sustainable development

Understanding China

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Understanding China