This section provides you with recent information on China’s: economic performance; economic prospects; trade and investments; politics and international relations; and infrastructure.
Following the economic reforms of 1978 under Deng Xiaoping, the People’s Republic of China (PRC) has gradually transformed from a centrally planned economy to one of the world’s fastest-growing economies and currently the world’s largest exporter and importer. China is considered an upper middle-income country and ‘services’ contribute just over half of the nominal GDP, followed by industry, while the share of agriculture is far more limited at 8,21% in 2017 (CIA Factbook). Since 2010 China’s economic growth has been slowing down. Despite this, in 2017 GDP increased by 6.8% (IMF, 2018). Domestic consumption and services has been the main growth engine, followed by investment. Exports, also, increased in 2017 by 11.4% in US dollar terms, and imports by 16.4%, reversing declines in 2015 and 2016 (ADB, 2018). The main exports are electromechanical products and labour-intensive products like clothing and apparel. The USA, EU and east and southeast neighbouring countries are the main export partners. Electronic equipment; mineral fuels and oil; and iron ore and scrap are important imports, traded by the EU and the neighbouring countries (ASEAN members, Japan and South Korea). Inflation has increased to 2.5% in 2018, but still remains in levels that ensure macroeconomic stability. The trade surplus decreased from 7.1% in 2016 to 4.5 in 2017 (ADB, 2018), the main reasons being an increasingly strong domestic demand and the uncertainty in global trade markets. The World Economic Forum Global Competitiveness Report ranks China 1st in domestic market size, foreign market size and GDP (PPP) in 2017-2018.
China has experienced a slowdown in its previously rapid growth rate since the start of the Global Recession, mainly due to the decrease of global demand. Nonetheless, for 2018 the EUI has revised its forecast for real GDP growth in 2018 to 6.7%, from 6.4%, considerably higher than any developed country and among the highest in the East Asian Pacific region. In regard to China’s future prospects, many analysts remain skeptical pinpointing the growing total debt of the country, due to the expansionary economic policy pursued by the Chinese government, which could have a negative impact on both growth and overall productivity (IMF, 2018, Bloomberg, 2018). Another potential threat for the Chinese economy is the increasing potential of full scale global trade war. Since June 1, 2018, the Trump administration imposed a 25% tariff on imports of steel and 10% on aluminium, considering the further introduction of tariffs with a focus on China. On the contrary, Chinese officials have up to this moment reacted soberly, although retaliatory tariffs were imposed against US products, such as pork and wine (BBC, 2018), embarking a series of measures and plans for the reduction of protectionist policies and tariffs in a large array of imports (Bloomberg, 2018). Tariffs are also considered to be cut on processed foods such as aquaculture and fishing products and mineral water, from 15.2% to 6.9% according to the New York Times).
It is expected that the Chinese economy will continue to slow down, from its current growth rate of almost 7%. Growth rates of 6.5% and 6.3% are likely in 2016 and 2017 respectively (ADB, 2016). The main drivers of this deterioration are reduced investments and the policy towards foreign investment, next to the short-term effect of contemporary structural reforms. Drivers of economic growth continue to be consumption and the service sector, despite efforts to reform the financial sector and open the capital account to maintain social and financial stability. Exports are expected to slightly increase, while imports are expected to be lower in 2016 but higher in 2017. After 2017 economic growth might stabilize and increase afterwards.
China Standard Time (UTC+6)
|GDP at market prices||
$ 14.09 trillion (2018)
|Real GDP growth rate||
|GDP per capita||
US$ 8,123.1 (2018)
|Doing business In Index*||
78 out of 190 (2018)
77 out of 180
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