Economy of the People's Republic of China

The economy of the People's Republic of China, better known simply as China, is the world's second-largest economy in terms of nominal gross domestic product. largest economy in the world in terms of purchasing power parity, according to the International Monetary Fund. Its nominal GDP, estimated at 18.4 trillion dollars (2021) represents around 18% of world GDP. GDP in purchasing power parity represents almost 19% of global PPP GDP. It is the country with the fastest economic growth in the world since the 1980s, with an average annual growth of almost 10% in the last 38 years. According to official data from the National Bureau of Statistics, the country's economy grew by 9.2% in 2021 due to the rebound effect on the economy caused by the COVID-19 pandemic.

China is the world center for the manufacture of all kinds of products and the undisputed largest industrial power and exporter of goods worldwide. China is the most populous country in the world and with the highest rate of growth in consumption, in addition second largest importer of merchandise.

China has an economy linked to international markets, both industrial and financial. According to the China Federation of Industry and Commerce, more than 60% of the GDP is produced by private sector companies, according to estimates by other academics, both Chinese and Foreigners estimate that the contribution of the private sector to Chinese GDP is between 70% and 80%. In addition, resources are allocated and prices determined mostly by market mechanisms. Private companies also represent 90% of all companies in the country. The Chinese state in turn controls and monopolizes its strategic sectors and maintains notable economic regulation, with the largest companies in China being mostly state-owned; The Chinese government calls this form of economy the "socialist market economy" or "socialism with Chinese characteristics." China is the country with the highest volume of trade and plays a determining role in international trade. In recent decades, it has been joining trade organizations and treaties. For example, the country joined the World Trade Organization in 2001 and the Association of Southeast Asian Nations in 2010. China also has bilateral free trade agreements with several countries, such as Switzerland or Pakistan.

China ranks 60th in nominal per capita food income and 71st in PPP GDP, according to 2021 IMF data. The coastal provinces tend to be more developed and industrialized, while the interior regions of the country are more rural and less developed. The President of China, Xi Jinping, proclaimed the Chinese Dream in 2013 and set as a short-term goal to achieve that by 2021, Chinese society lives at least modestly prosperous, and as a long-term goal for China to become a fully developed country by the year 2049. Both dates have an important symbolic charge, since in 2021 it will be the 100th anniversary of the founding of the Communist Party of China and in 2049 the centenary of the founding of the People's Republic of China. In 2018, Office of Poverty Reduction and Development of the State Council through the Ministry of Commerce announced that they had lifted 68 million people out of poverty in the last five years, or what is the same, an annual reduction of at least 13 million. The government has set itself the goal of eliminating absolute poverty by the end of 2020.

Since the 1980s, China has been establishing special economic zones, where it establishes economies based on successful experiences in different areas. The great development in the country's infrastructure was documented in a 2009 KPMG report. On the other hand, China has been criticized by the Western media for unfair trade, including artificial devaluation of the yuan, industrial espionage and theft of intellectual property, protectionism, and local favoritism.

History

In 1949, China was a rural country with very poor industrial development. Agriculture was intensive in nature, with a very low investment rate, the absence of a hydrological policy, caused great fluctuations between dry and rainy years, which produced great imbalances in the markets, accentuated by a poor transport network. According to UN estimates, in 1947 China's per capita income was $40 a year, half India's income and well below the world average of around $250.

As of the end of the war, the agricultural reform initiated during the conflict extended to the whole country. agricultural wage earners. Subsequently, a process of cooperativization and collectivization was passed. The coincidence of this process together with some adverse weather phenomena caused, between 1959 and 1961, a drop in agricultural production and severe famines.

The first industrialization

After the end of the war, the main industries, banking and wholesale trade were nationalized. Small and medium industry remained in private hands, although highly controlled. In 1953 the first five-year plan was approved, following the Soviet model, its objective was the construction of 694 manufacturing centers. The results made it possible to increase production and train a large number of technicians. Starting in 1957, the Chinese government separated from the Soviet guidelines, which coincided in time with a phase called the hundred flowers, which marked a period of openness towards criticism.

From 1958, with the second five-year plan, began what is known as the "Great Leap Forward," a set of measures aimed at forcing economic growth, which was intended to be a faster way to increase the production. In agriculture it meant the collectivization of farms and in industry the combination of large investments following the Soviet model with other smaller industries, in which the whole country was involved. The plan initially obtained significant quantitative results, managing to double the production of iron and steel in one year. In agriculture, the enormous size of the communes established together with the natural disasters, drought and floods, which affected China, caused a drop in production and a great famine.

In 1961 a phase of depression began in which the large agricultural communes were dissolved, lacking in efficiency.^{[citation required]} This year also saw the break with the Soviet Union and all projects started with its cooperation are canceled and ambitious growth goals that had proven useless are reduced, economic reform program called "Socialism with Chinese characteristics" in the People's Republic of China (PRC), which was started in December 1978 by reformers within the Communist Party of China (CPC) led by Deng Xiaoping. The goal of Chinese economic reform was to transform the planned economy to generate strong economic growth and increase the welfare of Chinese citizens. The first phase, in the late 1970s and early 1980s, involved de-collectivizing agriculture, opening the country to foreign investment, and allowing entrepreneurs to start businesses. The second phase of the reform, in the late 1980s and 1990s, involved heavy industry, although public monopolies in sectors such as banking and oil remained. The private sector grew remarkably, reflecting nearly 70% of China's GDP by 2005. From 1978 to 2010, unprecedented growth took place, with the economy growing at 9.5% per year.

Main players in the Chinese economy

Public companies

China Telecom Building

When the reforms were introduced in the late 1970s, China was a developing country struggling to feed its vast population of nearly a billion. Thus, the reform faced the double challenge of providing rational economic incentives while sustaining a basic social safety net to overcome fears of change. This is an approach where existing rights are "protected" to reduce resistance to reform, while creating strong incentives for wealth creation. This was the philosophy of the "two-track reform", also known as "the reform without losers".

Two-track reform was first introduced in the agricultural sector, which served as a model for reforms in other sectors. In this approach, the first pathway (the social safety net) was existing mandatory production quotas at low fixed prices; while the second track was all new production at (much higher) market prices. This reform, combined with the granting of "quasi-private property rights" created 100% marginal profit rates for any new production, and was so successful that the "Plan" it was abandoned in the 1980s and the two tracks were merged in 1992.

In this new economic system, public enterprises or danwei are struggling to find their place and are facing increasing difficulties. Its losses peaked at 102.6 billion yuan (12.75 billion U.S. dollars) in 2005, up 56.7 percent year-on-year, according to figures from the State Bureau of Statistics (BES). In the first two months of 2006, the losses of state-owned or state-controlled enterprises reached 26.2 billion yuan, or 3.25 billion US dollars. Rising production costs, an inefficient pricing system, excess capacity and significant technological deficiencies were the main causes of this situation in the past decade, according to Jiang Yuan, a member of the State Bureau of Statistics. The rapid growth of the private sector has shifted the importance of public company assets from almost 99% in the late 1970s to 25.2% in 2013, particularly as their results have remained well below those of public companies. private.

In 2016, the IMF alerted the Chinese authorities about the excessive indebtedness of the country's companies, especially public companies: while state and household debt remain reasonable (40% of GDP each), companies reach 145% of GDP; however, only state-owned companies account for 55% of total corporate debt, while their share of total production in the country is only 22%.

Foreign companies

New area of Pudong

The presence of foreign companies on Chinese soil is largely responsible for the sharp acceleration in export growth. The establishment of "market socialism" has set up many factories in China, making the country the 'Workshop of the World', due to the social dumping of its factories. They have attracted skilled labor to the coastal areas where most industries have been established. Only 41% of exports come from wholly Chinese companies. In 2006, 39% of China's exports come from companies whose capital is 100% foreign and 20% is the result of the association between foreign companies and local companies. Mainland China remains attractive to companies that demand cheap, non-unionized and docile labor. The lack of organization of Chinese workers represents a substantial benefit for employers, who find there employment flexibility impossible to implement in liberal democracies^{[citation needed]}.

That said, the impact of foreign companies goes beyond their role as exporters and employers of cheap domestic workers. In fact, foreign companies are creating tremendous synergies by setting visible standards in terms of management practices, quality control, and training methods, which domestic companies have been quick to emulate. So when foreign companies returned to China in the 1980s, virtually all of the technicians and managers, as well as spare parts, were imported. But, over time, businesses and domestic staff quickly began to fill these roles, bolstered by an education system that provides 2 million science and engineering graduates a year and the attraction of more than 100 science parks as of 2014. Indeed, the Chinese market has become too big to ignore, with the presence of 200 Fortune 500 companies, as well as being the headquarters of these 52 companies in Beijing in 2014.

Environment

Photovoltaic installation on the roof of a building in Hong Kong.

Since 2006, China has been the most polluting country in the world, surpassing the United States and with projections that suggest that this trend of increasing emissions will continue until at least 2025. In 2012, its emissions were almost the double that of the US. Unlike the rest of the industrialized countries, China obtains most of its energy from burning coal, a mineral that increased its weight in production between 1970 and 2010, an unprecedented fact. To remedy this, the government began investing in new projects to harness energy from renewable sources, such as hydroelectric power, wind power, solar power, geothermal power, biomass, and biofuels. In fact, China is one of the countries where wind and solar energy have experienced the fastest growth and, in just a few years, it has become the country with the highest installed capacity of both technologies.

The country also has the challenge of having to feed its population, which is equivalent to one in five human beings, with only 7% of its surface able to be used for agriculture. Due in part to the government's goal of relocating 400 million Chinese to cities in the next 25 years, that arable area is shrinking at the rate of 2 million hectares a year. For this reason, since the 2000s, China has been buying vast tracts of land in Africa —as Western multinationals are doing—, South America or European countries, highlighting the case of Ukraine, which gave China 3 million hectares—5% of the country's surface—for multi-billion-dollar exploitation; Ukrainian farmland (Chernozem) is among the most fertile in the world.^{[citation needed]}

In recent years, the government, faced with social pressure, has placed more emphasis on tackling the problem of pollution, trying to reconcile economic growth with the control of carbon emissions and climate change. In recent years years, more than 1,000 power plants considered inefficient have been closed, but as indicated, projections continue to point to an increasing rate of emissions. In mid-2014, China signed a series of agreements with the United States to reduce emissions of the two major powers. The agreements contemplate that by 2025, the United States will have reduced its emissions between 26 and 28% compared to 2005 levels, while China will increase its emissions until 2030, at which time it will begin to reduce them.

According to his thesis, China's economic strategy will never be sustainable if at these levels, for example, all the lakes on the outskirts of cities like Beijing have already been drained and the country is home to 16 of the 20 most polluted cities on the planet. In addition, they point out that the current refusal of the United States to participate in the Kyoto Protocol is conclusive proof that an industrialized nation does not necessarily commit to repairing the damage caused by its economic development.

Foreign trade

In 2020, the country was the world's largest exporter ($2.49 trillion, or 13.3% of the world total). In the sum of goods and services exported, it reaches US$2.64 trillion, just behind the United States, which exported US$2.49 trillion. In imports, in 2019, it was the second largest importer in the world: US$2.06 billion.

Primary sector

Agriculture and livestock

Banks or terraced crops in Yunnan

In 2018, China:

• It was the second world corn producer (257,1 million tons), only surpassed by the US. U.S.
• He was the world's largest producer of rice (212.1 million tons);
• He was the world's largest producer of wheat (131.4 million tons);
• It was the third world producer of sugar cane (108 million tons), only surpassed by Brazil and India;
• It was the world's largest producer of potatoes (90.2 million tons);
• He was the world's largest producer of watermelon (62.8 million tons);
• He was the world's largest producer of tomatoes (61.5 million tons);
• He was the world's largest producer of cucumbers (56.2 million tons);
• He was the world's largest producer of sweet potatoes (53.0 million tons);
• It was the largest worldwide producer of apples (39.2 million tons);
• He was the world's largest producer of eggplant (34.1 million tons);
• He was the world's largest producer of cabbage (33.1 million tons);
• He was the world's largest producer of onion (24.7 million tons);
• He was the world's largest producer of spinach (23.8 million tons);
• He was the world's largest producer of garlic (22.2 million tons);
• He was the world's largest producer of ejote (19.9 million tons);
• He was the world's largest producer of mandarin (19.0 million tons);
• He was the world's largest producer of carrots (17.9 million tons);
• It was the third world cotton producer (17.7 million tons), only surpassed by India and the United States;
• He was the world's largest producer of peanuts (17.3 million tons);
• He was the world's largest producer of pear (16.0 million tons);
• It was the fourth global soy producer (14.1 million tons), losing in front of the United States, Brazil and Argentina;
• It was the largest global producer of grapes (13.3 million tons);
• He was the second world producer of colza (13.2 million tons), only surpassed by Canada;
• He was the world's largest producer of peas (12.9 million tons);
• He was the world's largest producer of melon (12.7 million tons);
• It was the eighth world producer of sugar beet (12 million tons), which is used to produce sugar and ethanol;
• He was the second world producer of bananas (11.2 million tons), surpassed only by India;
• He was the world's largest producer of cauliflower and broccoli (10.6 million tons);
• He was the second world producer of orange (9.1 million tons), only surpassed by Brazil;
• He was the world's largest producer of pumpkin (8.1 million tons);
• He was the world's largest producer of asparagus (7.9 million tons);
• He was the world's largest plum producer (6.7 million tons);
• He was the world's largest producer of fungi and truffles (6.6 million tons);
• He was the world's largest producer of grapefruit (4.9 million tons);
• It was the fifteenth world producer of cassava (4.9 million tons);
• He was the second world producer of mango (including mangostan and guava) (4.8 million tons), only surpassed by India;
• He was the world's largest producer of caqui (3.0 million tons);
• It was the largest global strawberry producer (2.9 million tons);
• He was the world's largest producer of tea (2.6 million tons);
• It produced 2.5 million tons of sunflower;
• It was the third world lemon producer (2.4 million tons), only surpassed by India and Mexico;
• He was the world's largest tobacco producer (2.2 million tons);
• It was the eighth world producer of sorghum (2.1 million tons);
• He was the world's largest producer of kiwi (2.0 million tons);
• He was the world's largest producer of chestnut (1.9 million tons);
• Produced 1.9 million tons of taioba;
• Produced 1.8 million tons of beans;
• It was the third world producer of harvest (1.5 million tons), only surpassed by India and Niger;
• It was the eighth world pineapple producer (1.5 million tons);
• Produced 1.4 million tons of barley;
• He was the world's largest producer of sarricane wheat (1.1 million tons);
• It was the sixth world producer of oats (1 million tons);
• It was the fourth world producer of rye (1 million tons), only surpassed by Germany, Poland and Russia;
• Produced 1 million tons of Drywood;

In addition to smaller productions of other agricultural products.

In livestock, China was, in 2019, the world's largest producer of pork, with a production of 42.5 million tons; the second world producer of chicken meat, with a production of 14.4 million tons; the third world producer of beef, with a production of 5.9 million tons; the fifth world producer of cow's milk, with a production of 32 billion liters; the world's largest producer of honey, with a production of 444.1 thousand tons, among others.

China is the world's largest producer and consumer of agricultural products. Virtually all arable land is used for crops intended for human consumption. China is the world's largest producer of rice and among the top sources of wheat, corn, tobacco, soybeans, potatoes, sorghum, peanuts, tea, millet, barley, oilseeds, pork, and fish. Major non-food crops, including cotton, other fibers, and oilseeds, provide China with a small proportion of its foreign trade earnings. Agricultural exports such as vegetables and fruits, fish and shellfish, grains, and meat products are exported to Hong Kong. China hopes to further increase agricultural production through improvements in seeds, fertilizers and technology. According to government statistics published in 2005, since 2000 production has seen a steady annual increase.

According to the United Nations World Food Program, in 2003, China fed 20 percent of the world's population with just 7 percent of the world's arable land. China ranks first globally in agricultural production, and as a result of topographical and climatic factors, only about 10-15 percent of the country's total land area is suitable for agriculture. Of this, slightly more than half is irrigated, with the remainder split roughly evenly between paddy and irrigated areas. However, about 60 percent of the population lives in rural areas, and until the 1980s a high percentage of them lived directly from agriculture. Since then, many have been encouraged to leave the fields and pursue other activities, in light industry, trade and transport, to name a few examples; and by the mid-1980s, agriculture accounted for less than half the value of rural production. Today, agriculture contributes only 13% of China's GDP.

Poultry in Hainan

Animal husbandry is the second most important activity in the sector. China is the world's top producer of pigs, chickens and eggs, and also has large herds of sheep and cattle. Since the mid-1970s, increased emphasis has been placed on increasing livestock production. China has a long tradition of ocean and river fishing and aquaculture. Pond catchment has always been important and has been gaining prominence as a way to supplement inshore and inland catches threatened by overfishing and to provide such valuable export products as prawns.

Environmental problems such as floods, droughts and erosion pose serious threats to agriculture in many parts of the country. The country currently has more than 2,500 agricultural machinery enterprises, and the country's agricultural production generally employs cultivation machines, with a mechanization rate of 66 percent. The main forests are in the Qin Mountains and Central Mountains. and on the Sichuan-Yunnan Plateau. Because they are inaccessible, the Qinling forests are not fully exploited. Much of the country's timber comes from Heilongjiang, Jilin, Sichuan and Yunnan^{[citation needed]}.

Corn harvest and sunflower

Western China, which includes Tibet, Xinjiang and Qinghai, has little agricultural importance except for areas of floriculture and livestock. Rice, China's most important crop, is dominant in the southern provinces and many of the farms here yield two crops a year. In the north, wheat is of the highest importance, while in central China, wheat and rice compete with each other for the top spot. Millet and kaoliang (a variety of grain sorghum) are grown mainly in the northeast and some central provinces, which, along with some northern areas, also provide considerable amounts of barley. Most of the soybean cultivation comes from the north and northeast; maize is grown in the center and north, while tea comes mainly from the hot and humid mountainous areas of the south. Cotton is widely grown in the central provinces, but is also found to a lesser extent in the south-east and north. The tobacco comes from the center and parts of the south. Other important crops are potatoes, sugar beets, and oilseeds^{[citation needed]}.

Government policies in the agricultural environment

In the last decade, the government has been promoting agricultural mechanization to increase yields and compensate for the loss of rural workers who have migrated to the cities. According to the most recent statistics from the Food and Agriculture Organization of the United Nations and Agriculture, the annual growth rate of agricultural mechanization in China is 6.38 percent. By 2014, the rate of integrated mechanization had risen to almost 60 percent, with wheat production exceeding 90 percent and corn production close to 80 percent. In addition to standard farm equipment such as tractors, China's agricultural cooperatives have begun using high-tech equipment, including unmanned aerial vehicles, which are used to treat crops with pesticides.

During the XIX National Congress of the Communist Party of China, the new rural development strategy was presented with the aim of improving the agricultural sector and raising the living conditions of farmers. The government has recognized the development gap that exists between the urban and the rural and for this it has set an intervention plan with the following dates: by 2020 an institutional framework and a political plan must have been established. By 2035, the objective has been set for all rural inhabitants to have access to the same services as city dwellers such as education, health and infrastructure. By 2050 the new strategy is expected to have achieved its rural development targets.

Secondary sector

Industry

Production line in Shanghai

The World Bank lists the top producing countries each year, based on the total value of production. According to the 2019 list, China had the world's most valuable industry ($3.8 trillion).

Overall, China has become the world's largest producer of hundreds of products. Some examples: in 2019, China was the largest vehicle producer in the world (25.7 million) and the largest steel producer (996.3 million tons). In 2016, it produced half of the world's shoes and was by far the largest exporter. In 2018 it was also the world's largest producer of beer and soybean oil. The country also has the world's largest electronics industry. From textile products to toys or plastic products, the Chinese industry uses highly competitive products to export to all over the world.

Industry and construction account for 46.8% of China's GDP. Between 2011 and 2013, China used more cement than the United States consumed throughout the century XX. In 2009, about 8% of total industrial production in the world came from China and that year it ranked third in the world for industrial production (first being in the EU and the second in the United States). Research by IHS Global Insight indicates that in 2010 China contributed 19.8% of global manufacturing output and became the world's largest manufacturer that year, after the US and it held that position for approximately 110 years.

In November 2012, the State Council of the People's Republic of China ordered a "social risk assessment" for all major industrial projects. This requirement followed mass public protests in some locations for planned projects or expansions.

Major industries include mineral processing; iron and Steel; aluminum; coal; machinery; armament; textiles and clothing; Petroleum; cement; chemical; fertilizers; food processing; automobiles and other transportation equipment, including railcars and locomotives, ships, and aircraft; consumer products, including footwear, toys, and electronics; telecommunications and information technology. China has become a preferred destination for the relocation of global manufacturing facilities. Its strength as an export platform has contributed to income and employment in China.

Since the founding of the People's Republic, considerable attention has been paid to industrial development; as of 2011, 46% of China's domestic production remained dedicated to investment; a much higher percentage than any other nation. Among the various industrial branches, the metalworking and machine-building industries have been given the highest priority. These two areas alone now account for around 20-30 percent of the total gross value of industrial production. In these, as in most other areas of industry, however, innovation has generally suffered at the hands of a system that has rewarded increases in gross production rather than improvements in variety, sophistication, and quality. China therefore still imports significant quantities of specialized steels. General industrial production has grown at an average rate of more than 10 percent per year, outpacing all other sectors in terms of economic growth and degree of modernization. Some heavy industries and products that are considered to be of national strategic importance remain State-owned, but a growing proportion of consumer-oriented and light industries are private companies or private joint ventures.

Steel industry

Steel industry in Jiaxing

In 2012, China was the largest steel producer in the world, producing 45% of the total, 683 million tons, an increase of 9% over 2010. 6 out of 10 largest steel producers in the world They are in China. Profits are low despite continued high demand due to high debt and overproduction of high-end products produced with equipment financed by high debt. The central government is aware of this problem, but there is no easy way to solve it, as local governments strongly support local steel production. Meanwhile, each company is aggressively increasing production. Iron ore production kept pace with steel production in the early 1990s, but was soon overtaken by imported iron ore and other metals in the early 1990s. of the 2000s. Steel production, estimated at 140 million tons in 2000, increased to 419 million tons in 2006. Much of the country's steel production comes from a large number of production centers in small scale, one of the largest is Anshan in Liaoning^{[citation needed]}.

China was the world's leading steel exporter in 2008. Export volumes in 2008 were 59.23 million tons, down 5.5% from the previous year. The decline ended the growth of exports. China's steel exports, which lasted for a decade. As of 2012, steel exports faced widespread anti-dumping duties and had not returned to pre-2008 levels. Domestic demand remained strong, particularly in the west of the country, which has experienced notable development, where production steel industry in Xinjiang was expanding.

On April 26, 2012, China's banking regulator issued a cautionary warning regarding lending money to steel companies that, as profits from making and selling steel have declined, have sometimes used borrowed money with speculative purposes. According to the China Iron and Steel Association, the Chinese steel industry lost Rmb 1 billion in the first quarter of 2012, its first loss since 2000.

China cut 45 million tons of steel production capacity in 2016 and 250 million tons of coal in 2016. The Ministry of Industry and Information released a draft new regulation and application of standards on August 12, 2016 strict measures to solve the problem of overproduction of steel, coal, cement, glass and aluminum: a "differential credit policy" to companies that can restructure, while companies that do not stick to the plans will be deprived of financing.

Automotive industry

Chinese Motor Vehicle, Geely GC9

In 2006, China became the world's third-largest manufacturer of motor vehicles (after the US and Japan) and the second-largest consumer (after the US). Car manufacturing has exploded during the reform period. In 1975, only 139,800 cars were produced per year, but by 1985 production had reached 443,377, then increased to nearly 1.1 million in 1992, and rose fairly evenly each year until 2001, when it reached 2.3 million. In 2002 production increased to almost 3.25 million and then jumped to 4.44 million in 2003, 5.07 million in 2004, 5.71 million in 2005, 7.28 million in 2006, 8.88 million in 2007, 9.35 million in 2008 and 13.83 million in 2009. has become the number one automaker in the world in 2009. Domestic sales have kept pace with production. After respectable annual increases in the mid-to-late 1990s, car sales skyrocketed in the early 2000s. In 2006, a total of 7.22 million cars were sold, including 5.18 million units of cars and 2.04 million units of commercial vehicles^{[citation needed]}.

In 2010, China became the world's largest manufacturer of motor vehicles and the largest consumer ahead of the US or the United States, with approximately 18 million new cars sold. However, new car sales grew only by an estimated 1% between 2011 and 2012 due to the escalation in the Spratly Islands dispute, which involved Japan, the world's third largest vehicle producer.

China's auto industry began exporting auto parts in 1999. China began planning big moves in auto and component export business from 2005. A new Honda plant in Guangzhou was built in 2004 solely for the export market with the capacity to dispatch 30,000 passenger vehicles annually to Europe from 2005 onwards. By 2004, 12 major foreign automakers had joint venture plants in China. They produced a wide range of cars, minivans, sport utility vehicles, buses, and trucks. In 2003, China exported US$4.7 billion worth of vehicles and components. The export of vehicles was 78,000 units in 2004, 173,000 units in 2005 and 340,000 units in 2006. The export of vehicles and components exceeded 70 billion dollars in 2010^{[citation needed]} .

The Chinese government announced the goal of 5 million electric and hybrid vehicles on the road by 2020. To achieve this goal, the authorities have already made an investment of 54 billion dollars in the decade of 2000-2010 to develop electric vehicle battery technology, and commit to investing an additional $10 billion to develop charging infrastructure by 2020.

Other industries

Generators in Xinjiang

Significant investments were made in the manufacture of solar panels and wind generators by various companies, backed by liberal loans from banks and local governments. However, by 2012 manufacturing capacity had far exceeded domestic and global demand for both products, particularly solar panels, which were subject to anti-dumping sanctions by both the United States and Europe. The global glut has led to production cuts both inside and outside of China. China has budgeted $50 billion to subsidize solar power production over the two decades after 2015 but, even at a greatly reduced price as a result of oversupply, as of 2012 the cost of solar power in China remains being three times greater than non-renewable energy.

China is the world's largest producer of sex toys, accounting for 70% of total world production. There are more than 1,000 manufacturers active in this industry, which together generate around two billion dollars a year.

Since 2011, China is the world's largest market for personal computers.

Energy

Nuclear Power Plant in Zhejiang

In non-renewable energy, in 2020, the country was the sixth largest oil producer in the world, extracting 3.88 million barrels / day. In 2019, the country consumed 14 million barrels/day (2nd largest consumer in the world). The country was the world's largest oil importer in 2018 (8.4 million barrels/day). In 2016, China was the world's sixth largest producer of natural gas, 138.4 billion m³ per year. In coal production, the country was the largest in the world in 2018: 3.5 billion tons. Despite this, the country is also the world's largest coal importer: in 2018, it was 281 million tonnes, mainly from Indonesia and Australia. In addition, China is the third country with the most atomic plants in its territory. behind only the US and France: in 2019 there were 49 plants with an installed capacity of 46.5 GW.

In renewable energy, in 2020, China was the largest producer of wind energy in the world, with 281.9 GW of installed capacity; the largest producer of solar energy in the world, with 254.3 GW of installed capacity; and in 2014 it was the largest producer of hydroelectric power in the world, with an installed capacity of 311 GW.

Since 1980, China's energy production has grown significantly. About 80 percent of all energy is generated from fossil fuels in thermal plants, with about 17 percent in hydroelectric facilities; only about two percent comes from nuclear power, mainly from plants located in Guangdong and Zhejiang. Although China has rich energy potential, it has not yet reached its full production potential. In addition, the geographic distribution of energy distances most of these resources from their main industrial users. Basically, the Northeast is rich in coal and oil, the central part of North China has abundant coal, and the Southwest has immense hydropower potential. But the industrialized regions around Guangzhou and the Lower Yangtze region around Shanghai have very little energy, while there is relatively little heavy industry located near major energy resource areas other than in the southern part of the northeast^{[ citation required]}.

Due in large part to environmental concerns, the country has wanted to reduce reliance on coal, which accounts for 70-75% of energy production, toward greater reliance on oil, natural gas, renewable energy, and nuclear. China has closed thousands of coal mines in the past decade to reduce overproduction. According to Chinese statistics, this has reduced coal production by more than 25%.

Since 1993, China has been a net importer of oil, much of it coming from the Middle East. Imported oil represents 20% of the crude processed in China. There is an interest in diversifying the sources of its oil imports and it has invested in oil fields around the world. It is developing oil imports from Central Asia and the country has invested in oil fields from Kazakhstan. Beijing also plans to increase China's natural gas production, which currently accounts for only 3% of China's total energy consumption, and incorporated a natural gas strategy into its 10th Five-Year Plan (2001-2005), with the goal of expanding the gas use from 2% share of total energy production to 4% by 2005 (gas accounts for 25% of US energy production)^{[citation needed]}.

The 11th Five-Year Program (2006-10), announced in 2005 and approved by the National People's Congress in March 2006, called for increased energy conservation measures, including the development of renewable energy sources and greater attention to environmental protection. The guidelines called for a 20 percent reduction in energy consumption per unit of GDP by 2010. Moving away from coal toward cleaner energy sources, including oil, natural gas, renewable energy, and nuclear power is an important component of the development agenda. from China. Beijing also intends to further improve energy efficiency and promote the use of clean coal technology. China has abundant hydroelectric resources; the Three Gorges Dam, for example, has an installed capacity of 22,500 MW. In addition, the share of electricity generated by nuclear power is expected to increase from 1% in 2000 to 5% in 2030. The law of China's Renewable Energy Act, which came into effect in 2006, requires 10% of its power to come from renewable energy by 2020.

Charcoal

Carbon miner in Xingtai

China has significant mineral reserves, the most important of which is coal. China's mineral resources also include large reserves of iron ore and almost all other industrial minerals. Although the coal deposits are widely dispersed (some coal is found in each province), most are in the north of the country. Shanxi province, in fact, is believed to contain about half of the total; other major coal-bearing provinces include Heilongjiang, Liaoning, Jilin, Hebei, and Shandong. In addition to these northern provinces, there are significant amounts of coal in Sichuan, and there are some significant deposits in Guangdong, Guangxi, Yunnan, and Guizhou. A large part of the country's reserves is made up of good bituminous coal, but there are also large deposits of lignite. Anthracite is present in several places (especially Liaoning, Guizhou and Henan), but in general it is not very significant.

To ensure a more even distribution of coal supplies and to reduce the pressure on a still inadequate transportation network, the authorities pushed for the development of a large number of small, locally-based mines throughout the country. This campaign was vigorously pursued after the 1960s, with the result that thousands of small pits have been established and produce more than half the country's coal. However, this output is often expensive and is used for local consumption. It has also led to less than stringent implementation of safety measures at these unregulated mines, which cause several thousand deaths each year.

Carbon mine in Hailar

Coal accounts for the majority of China's energy consumption (70% in 2005), and China is the world's largest producer and consumer of coal. As China's economy continues to expand, China's demand for coal is expected to increase significantly. Although the share of coal in China's total energy consumption will decline, coal consumption will continue to increase in absolute terms while other alternatives are developed. China's increasing reliance on coal as an energy source has contributed significantly to putting China on the path to becoming the world's largest emitter of acid rain-causing sulfur dioxide and greenhouse gases, including carbon dioxide.

The fall in coal prices in 2015 led to layoffs at coal mines in the northeast.

Oil and natural gas

Oil extraction rod pumps in Sinkiang

China's onshore oil resources are located mainly in the northeast and in the provinces of Xinjiang, Gansu, Qinghai, Sichuan, Shandong and Henan. Oil shale is found in a number of locations, notably at Fushun in Liaoning, where deposits lie in coal reserves, as well as in Guangdong. High-quality light oil has been found in the Pearl River estuary in the South China Sea, the Qaidam Basin in Qinghai, and the Tarim Basin in Xinjiang. The country consumes most of its oil production, but it exports crude oil and petroleum products. China has explored and developed oil fields in the South China Sea and the East China Sea, the Yellow Sea, the Gulf of Tonkin and the Bohai Sea.

In 2013, the pace of China's economic growth exceeded the country's oil production capacity, and in the middle of that year floods damaged the nation's oil fields. Consequently, China imported oil to make up for the reduced supply and overtook the US in September 2013 to become the world's largest oil importer.

The full extent of China's natural gas reserves is unknown, as it has not yet been extensively exploited. Sichuan accounts for nearly half of China's known natural gas reserves and production. The rest is associated gas produced in the major oil fields in the northeast, especially the Daqing oil field. Other gas deposits have been found in the Qaidam Basin, Hebei, Jiangsu, Shanghai and Zhejiang, and on the southwest coast of Hainan Island. According to an article published in Energy Economics in 2011 According to economists Mete Feridun (University of Greenwich) and Abdul Jalil (Wuhan University in China), financial development has led to a decrease in environmental pollution. The authors conclude that carbon emissions are mainly determined by income, energy consumption and trade openness, and their findings confirm the existence of an environmental Kuznets curve in the case of this country.

Hydroelectric resources

Three Gorges Dam in the Yangtse River

China has great potential for hydroelectric power production due to its extensive river network and mountainous terrain. Most of the total hydroelectric capacity is located in the south-west of the country, where the supply of coal is in short supply but where the demand for power is increasing rapidly. The potential in the northeast is quite small, but it was there that the first hydroelectric power stations were built by the Japanese during their occupation of Manchuria. Due to considerable seasonal fluctuations in rainfall, river flow tends to slow during winter, forcing many power plants to operate at below-normal capacity, while in summer, on the other hand, flooding often interfere with generation. After thirteen years of construction at a cost of US$24 billion, the massive Three Gorges Dam across the Yangtze River was essentially completed in 2006 and began operations in 2012.

Mining

In mining, in 2019, the country was the world's largest gold producer; 3.er world producer of copper; 3.er world producer of silver; largest world producer of sulfur; world's largest producer of phosphate; world's largest producer of molybdenum; world's largest producer of lead; world's largest producer of zinc; world's largest producer of vanadium; world's largest producer of tin; the world's largest producer of titanium; the world's largest producer of antimony; the world's second largest producer of bauxite; 3.er world producer of iron ore; 6th world producer of manganese; 7th world producer of nickel; 10th world producer of cobalt; as well as being the world's largest producer of salt. It was the eighth p world producer of uranium in 2018. In addition, it is the world's largest producer of jade and one of the world's producers of topaz, tourmaline, peridot and diamond.

Despite increased production due in part to modernization of mining processes and equipment, China's rapid industrialization requires mineral imports from abroad. In particular, iron ore imports from Australia and the United States have skyrocketed in the early 2000s, as steel production quickly outpaced domestic iron ore production. China has also become increasingly active in various African countries to tap the reserves it requires for economic growth, especially in countries like the Democratic Republic of the Congo and Gabon.

The main areas of production in 2004 were coal (almost 2 billion tons), iron ore (310 million tons), crude oil (175 million tons), natural gas (41 million cubic meters), antimony ore (110,000 tons), tin concentrates (110,000 tons), nickel ore (64,000 tons), tungsten concentrates (67,000 tons), unrefined salt (37 million tons), vanadium (40,000 tons), and molybdenum (29,000 tons). In order of magnitude, the minerals produced were bauxite, gypsum, barite, magnesite, talc and related minerals, manganese ore, fluorspar, and zinc. In addition, China produced 2,450 tons of silver and 215 tons of gold in 2004. The mining sector accounted for less than 0.9% of total employment in 2002, but produced about 5.3% of total industrial production^{[citation required]}.

Metals and non-metals

Iron ore reserves are found in most provinces, including Hainan. Gansu, Guizhou, southern Sichuan and Guangdong provinces have abundant deposits. The largest mined reserves are north of the Yangtze River and supply neighboring steel companies. With the exception of nickel, chromium and cobalt, China is well supplied with ferroalloys and manganese. Tungsten reserves are also quite large. Copper resources are moderate, with high-quality ore present in only a few deposits. Lead and zinc are available, and bauxite resources are believed to be abundant. China's antimony reserves are the largest in the world. Tin resources are abundant and important gold reserves. China is the world's fifth largest producer of gold and, in the early 21st century, became a major producer and exporter of rare metals needed for high-tech industries^{[citation needed]}.

China also produces a wide range of non-metallic minerals. One of the most important is salt, which is derived from coastal evaporation sites in Jiangsu, Hebei, Shandong, and Liaoning, as well as extensive salt fields in Sichuan, Ningxia, and the Qaidam Basin. There are significant deposits of phosphate rock in various areas; Jiangxi, Guangxi, Yunnan and Hubei. Production has been accelerating every year. As of 2013, China is producing 97,000,000 metric tons of phosphate rock per year. Pyrites are present in several locations; Liaoning, Hebei, Shandong and Shanxi have the largest deposits. China also has large resources of fluorite (fluorspar), gypsum, and asbestos, and has the world's largest cement, clinker, and limestone reserves and production.

Tertiary sector

New Century Global Center, Chengdu

Since 2010, China has ranked third in the world in the service sector, after the United States and Japan, and high-power and high-density telecommunications have ensured that the country remains on a high-growth trajectory in the long run. In 2010, the service sector produced 43% of China's annual GDP, second only to manufacturing. However, its share of GDP remains low compared to the share in more developed countries, and the agricultural sector still employs a larger workforce^{[citation needed]}.

Before the start of economic reforms in 1978, China's service sector was characterized by state-owned stores, rationing, and regulated prices; With the reform came private markets, individual entrepreneurs, and a commercial sector. Wholesale and retail trade has expanded rapidly, with numerous shopping malls, stores, restaurant chains, and hotels being built in urban areas. Public administration remains a major component of the service sector, while tourism has become an important factor in employment and a source of foreign exchange.

Chengdu, China, has unique buildings such as the New Century Global Center, 100 meters high, 500 m long and 400 m wide, it houses shops, a 14-screen cinema, offices, hotels, the water park Paradise Island, an artificial beach, a 150-m LED screen, a skating rink, a pirate ship, a recreation of a Mediterranean village, 24-hour artificial sun and 15,000 parking spaces.

Telecommunications

China has a diversified communications system that connects all parts of the country via the Internet, telephone, telegraph, radio, and television.

The number of Internet users or netizens in China exceeded 137 million by the end of 2006, an increase of 23.4% over the previous year and 162 million by June 2007, making China the second Internet user after the United States, according to China's Ministry of Information Industry (MII). China's mobile phone penetration rate was 34% in 2007. In 2006, mobile phone users sent 429 billion text messages (on average, 967 text messages per user). By 2006, the number of fixed lines increased by 79%, mainly in rural areas.

Tourism

Forbidden City in Beijing

In 2018, China was the fourth most visited country in the world, with 62.9 million international tourists, second only to Spain, France and the United States, with Italy narrowly winning. Tourism revenue this year was US$ 40.3 billion.

China's tourism industry is one of the fastest growing economic activities in the national economy and is also one of the industries with the greatest global competitive advantage. According to the World Travel and Tourism Council, travel and tourism directly contributed US$16 billion to the Chinese economy (about 2.6% of GDP). In 2011, total international tourist arrivals were 58 million, and income from international tourism was 48 billion dollars^{[citation needed]}.

Domestic tourism represents more than 90% of the country's tourist traffic and contributes more than 70% of the total income of the sector. In 2002, domestic tourists reached 878 million and tourism receipts were 46.9 billion dollars. An emerging middle class with strong consumer power is gaining prominence in China, especially in major cities. Chinese tourists leaving the country reached 20.22 million in 2003, surpassing Japan for the first time^{[citation needed]}.

The World Tourism Organization forecasts China's tourism industry to take up to 8.6% of the global market share to become the world's leading tourism industry by 2020^{[citation needed]}.

China surpassed the US in business travel spending in 2014. According to a study by the Global Business Travel Association, total spending on business travel reached $195 billion in 2012.

China in the international context

Xi Jinping at Hangzhou G-20 Summit, 2016

We will continue to participate fully in economic globalization and to support the multilateral trading regime. We will expand access to foreign investment, facilitate this investment to promote fair and open competition, and create a strong business environment. We will also accelerate negotiations on free trade agreements and investment treaties with relevant countries, and the development of free trade pilot zones in China. As we make an orderly reform of the market-based exchange rate, and the opening of the national capital market, we will continue our efforts to turn the yuan into an international currency and internationalize the financial sector of China.

Xi Jinping during the annual G20 summit in September 2016

Due to its impressive demographic weight within the planet and the increase in its main economic ratios, China is destined to be the world's leading economic power in the coming years. However, it is necessary to contextualize this economic leadership: as in the other current great powers (especially the Western ones, such as the United States and the European Union) there is a clear correlation between absolute (GDP) and relative (per capita income) economic variables in In the case of China this is not the case. Although it has experienced a 485% increase in its per capita income in the last decade (from $930 in the year 2000 to $5,445 in the year 2010), its wealth is very unequally distributed, generating large social gaps and diminishing the average competitiveness per inhabitant. Therefore, its economic rise is currently supported by its huge number of inhabitants (one fifth of the planet) like another country with similar demographic characteristics, such as India. Despite this, it is necessary to emphasize that China constantly improves relevant macroeconomic indicators such as the global competitiveness index, generated by the World Economic Forum, the percentage of users with Internet access or even the average number of days to set up a company. The following table shows a summary of the situation:

The main Chinese economic initiatives at the international level establish three main objectives: (I) Implement an alternative economic model of the global economy against the leadership of the West, especially the US; (II) favor the economic integration of Eurasia and the Indo-Pacific axis to reorder the structure of the world economy in the long term; and (III) consolidate a new order in Asia, with the leadership of China.

Foreign trade

Imports

The merchandise with the greatest weight in China's imports for the period 2010-until May 2015 is presented below. The figures are expressed in US dollars, FOB value.

Imports from China for the period 2010-up to May 2015 expressed in USD value FOB. Source

Exports

The following are China's main trading partners for the period 2010-May 2015. Most of its importers are in Asia except for the United States, Germany and the United Kingdom. The figures expressed are in US dollars FOB value.

Exports from China from 2010 to May 2015 expressed in USD value FOB. Source