CHINA’S ECONOMY

(Roll no.413)
China is the second largest economy of the world. It is
responsible for lifting 800 million people out of poverty. It is the
world’s second largest economy by nominal GDP and world’s
largest economy by purchasing power parity.

Why is it the second largest

economy of the world?
How was this achieved?
1. China became the world’s manufacturing hub,
specialising in the labour-intensive, export-led
production of cheap goods that enabled a gradual
increase in product complexity. In a nutshell, its
growth strategy was to assemble and sell cheap
goods to the world.
2. POPULATION:China has the same population as North and
South America, Australia, New Zealand, and Western
Europe combined.the world.This further made the economic
progress of China on global poverty easier and faster.
The fact that the world reached its development goal of
halving extreme poverty was largely driven by China, which
accounted for more than three quarters of global poverty
reduction between 1990 and 2005.
 China’s economy is the literal embodiment of a phoenix rising
from the ashes. China was a poor country back in 1978. It’s
economy expanded by 5 times and the international trade
expanded by 12 times over the past few decades.All thanks to
economic stratergies and reforms introduced by the government
in 1978. China has done more than any economy to pull the
world out of recession and still remains an important engine for
global economic growth.

The private sector is the main driver of growth and

employment.
Between 2010 and 2012, private sector firms produced
between two-thirds and three-quarters of China’s GDP; it
also accounts for 90% of China’s exports.

Import and export

 China is the biggest exporter of goods. It is the biggest trading nation
and is the largest manufacturing economy.
 China is the world's second largest importer. In 2017, it imported
$1.7 trillion. China imports raw commodities from Latin America and
Africa. These include oil and other fuels, metal ores, plastics, and
organic chemicals. It's the world's largest importer of aluminum and
copper.
 China dominates world trade after the major reforms,that
wereintroduced back in 1978, that were focused on market-oriented
economic development.
 Cotton,rice,tea,soybeans and potatoes are some of its biggest
exports. This clearly shows that the agricultural sector is pretty
advanced .
 It’s main trading partners are USA,KOREA,JAPAN AND HONG KONG.
 China makes and sells more manufacturing goods than any other
country on the planet. The range of Chinese goods includes iron,
steel, aluminum, textiles, cement, chemicals.

CHINA’S CURRENT ECONOMIC POSITION

 China’s economy is going through a major transition – slowly
moving from “Made in China” to “Made for China”. The
economy is no longer driven primarily by huge investment in
manufacturing to produce cheap goods destined
primarily for export markets. It is now moving from an
export-led, low-cost producer economy, towards one driven
chiefly by domestic consumption and underpinned by
services, innovation and entrepreneurship. China has no
option but to rebalance its economy because the old
economic model is not sustainable.
 But what is mind blowing is the fact that it still remains one
of the fastest growing economies in the world despite of the
slowdown and economists say that it will manage to
overtake US to become the largest economies in the world.